DZ BANK investment indicator: sentiment among private investors improving considerably

Every second investor is expecting higher prices / Evaluation of further development of share prices is as good as it has been this year / Nevertheless investors prefer secure cash deposits

Despite the turbulence on the international financial markets, German private investors assess the future prospects on the stock exchanges more optimistically than they have ever done this year. This was the surprising result of a representative survey among private investors which TNS Infratest carried out on behalf of DZ BANK AG. However, the positive market assessment does not correspond with investor behaviour. Investors prefer secure financial investments more than ever. For example, according to the results of the survey, the propensity to invest in shares is the lowest it has been this year. DZ BANK determines the investor indicator quarterly.
Currently half of all private investors assume that the German share index (Dax) will increase within the next six months. On the other hand just slightly more than a quarter expect the price level to decline again. The number of optimists thus almost doubled within just two months. In the middle of August just slightly more than a quarter of those questioned expected share prices to rise. “It comes as a great surprise that the sentiment among private investors has changed so much within such a short space of time given the extreme price fluctuations in the past weeks and the impending recession. Obviously many investors believe that the Dax has meanwhile bottomed out “, says Peter Schirmbeck, Head of Retail Division at DZ BANK.

Investors are looking for security and guarantee
However, a lot more investors are shying away from the share price risk than in the past months. They prefer secure cash deposits more than ever. For example, around three quarters of all those questioned explained that they would consider a fixed term deposit or call money if they were to invest EUR 10,000 in the coming months – and a third more than in August – would also contemplate buying Federal savings bonds.
On the other hand just 15 percent of those questioned would think about a direct purchase of stock. In August this value came in at 20 percent. The number of those who would invest in equity funds declined to 22 percent (August: 33 percent). The number of those who would contemplate an investment in real estate funds remained more or less constant. The figure came in at 16 percent after 15 percent in August. The preference for money market funds and certificates declined from 14 percent and 15 percent respectively in August to 9 percent.

Bonds business at high level
“The results of the investor indicator confirm what we are currently experiencing in our business: security, guarantee and quality are the most important criteria for investment decisions”, explains Schirmbeck. “We have a strong bonds business which, after experiencing a short blow due to uncertainty on the part of many investors following the turbulence on the financial markets, has reached the high level again from the time before the financial crisis. In terms of certificates, guarantee certificates are the most in demand. Furthermore, investors are currently focussing increasingly on avoiding not just market risks but also issuer risks”. From a legal point of view, bonds and certificates are bearer debentures and are generally not protected via protection schemes. One of the few exceptions is DZ BANK issues, which are protected via the protection scheme of the Federal Association of German Cooperative Banks (BVR).

Need for information about the financial market crisis has risen
The survey also showed that the need for information has increased. Every second investor wants information about the financial market crisis from its bank, and actually preferably within the context of a personal consultation with the respective bank adviser.

The data were collected in the period from 22 October to 28 October 2008 within the context of a telephone survey. The sample of 1,021 is representative for persons in the German population aged 18 and over with an affinity for investments.



Silvia Conesa, Spokesperson DZ BANK AG
Tel.: +49 (0)69 7447-90568