Survey: Sentiment among private investors deteriorates dramatically

– Greater importance than ever attached to the safety of investments / Only one quarter of investors intends to spend all of the tax saving from the economic stimulus package on consumer goods / No other investment product has gained as much in popularity

Sentiment among German private investors deteriorated significantly at the beginning of the year. In the meantime, it is similarly poor to that seen in summer 2008, when it fell to a new low due to the international financial markets crisis. This is revealed by a representative survey carried out by TNS Infratest on behalf of DZ BANK. It also shows that the German population attaches even greater importance to the safety of its investments than before. In addition, over 70 percent of those polled do not intend to spend all of the possible tax relief resulting from the German government’s second economic stimulus package on consumer goods and services, but plans to use part of it to make additional savings. DZ BANK measures sentiment among German investors on a quarterly basis.
The current survey also revealed that only 28 percent of all private investors expect the leading German stock index, the Deutsche Aktienindex (DAX), to rise within the next six months. Investors’ assessment of the market has thus deteriorated sharply within the past three months. In the October survey almost half of all investors polled were optimistic. “The unusually sharp turnaround in sentiment is due in our opinion in particular to the continuous deterioration in the economic outlook. In the meantime, in contrast to October, only a very small number of private investors believe that the economic situation–and thus the stock-exchange environment–will improve rapidly,” said Peter Schirmbeck, Head of the Retail Division at DZ BANK.
These negative expectations are also reflected in the issue of Germany’s second economic stimulus package: only one quarter of investors intend to spend all the additional money from tax savings on consumer goods. Well over half of them plan to save at least part of the money, and 17 percent of those polled even said they plan to save the whole amount.
Generally speaking, investors attach more importance than ever to the safety of their investments. Nine out of ten investors said this was important or very important for their investment decision. They attach a similar amount of importance to trust in the bank and the bank’s credit standing. In addition, the bank’s financial strength is also becoming increasingly important. The return on the investment, by contrast, plays an important role for only 69 percent of investors.
Investors’ preference for certificates picks up where it left off before the crisis
Among the various investment products, only overnight and fixed income offerings, certificates and money market funds have become more popular with investors: 76 percent of those polled said that they would consider a fixed-rate or overnight investment if they had EUR 10,000 to invest in the next months (October 2008: 72 percent; a year ago: 63 percent). But it was the certificates which made the greatest leap up the popularity scale. Within the past three months investors’ preference for these instruments has returned to the level before the financial crisis. In the meantime, 14 percent of all those polled would consider investment in certificates (October 2008: 9 percent). They showed by far the greatest interest in guarantee certificates and certificates with a partial hedge.

In the meantime for the first time more investors voted for investment in certificates than in shares
Interest in direct investments in shares has, by contrast, fallen to only 13 percent. This is the lowest level recorded by all previous surveys within the framework of the Investor Indicator. “Investors’ confidence in the certificates market has been restored since the turmoil in autumn last year. This is also reflected in daily business,” says Peter Schirmbeck. “Guarantee certificates that we have issued in the past two months were oversubscribed within a short time. For this reason, we were obliged to close the subscription period prematurely and float a follow-up product.”
Surprisingly: despite the very high need for security, Bundesschatzbriefe (federal saving bonds) have become far less popular with investors, contrary to the trend. Only 38 percent of those polled still show interest in them at the moment after 44 percent in October 2008.

Flat rate tax on investment income (Abgeltungssteuer): only every fourth investor has restructured his portfolio
Tax aspects now play only a subordinate role for investors and were only important for 48 percent of those polled. And only 27 percent of those polled declared they had restructured their portfolio last year because of the introduction of the flat rate tax on investment income (Abgeltungssteuer) introduced on January 1, 2009. Around half of these had in turn systematically purchased–or switched to–securities that benefit from the flat rate tax.

Despite the crisis in the financial markets ecology remains a trend issue
On the other hand, investors’ interest in ecological investments remains intact despite the recession. Around half of all investors say they would consider investments according to ecological criteria, and around a quarter said the same for ethical investments. Thus the number of investors who are interested in these two aspects has increased slightly compared to spring 2008. The number of those who had already invested in these alternatives also remained stable. This applies to almost every fourth investor polled for investments made according to ecological criteria. Every tenth has investments that were selected on ethical criteria.
“The figures show that ecological investments are anything but a luxury. On the contrary, they are a sustained investment trend which will not only outlive the financial crisis but which become even more of a focal point in the future,” said Peter Schirmbeck. This does not necessarily hold for investments in commodities as currently only 26 percent of investors are interested in these following the steep price decreases–and thus six percent less than in October 2008. The popularity of two other investment alternatives also remained comparatively low: investments in the infrastructure sector and in emerging markets. These only interested 20 or 12 percent of those polled.

The data was polled in the period from 13 January to 21 January 2009 within the framework of a telephone survey. The sample of 1,179 respondents is representative of members of the German population with an affinity for investment and upwards of 18 years of age.



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