Australian investors are at odds with their global counterparts when it comes to the importance of interest rates and the likelihood of global growth, a new survey has revealed.
The CFA Institute’s Global Sentiment Survey – which collates insights from 5,250 CFA-member investment professionals worldwide – found Australia and South Africa were the only countries where investors saw a rise in interest rates as a major threat to global markets.
In a statement, CFA Society of Sydney president Anthony Serhan called the differences “revealing” and predicted these attitudes might shape investment trends over the coming year.
“One could argue about the source of this concern and perhaps even its validity, however what does seem clear is that for investment professionals, interest rates are a factor that may affect decisions as we move ahead in 2015,” he said.
“Ultimately I think this reflects the importance of US markets and the real question over what will happen to financial assets globally when rates do rise in that market.”
Australian investors were also the only country to predict domestic GDP growth at the same level as global growth, around 1.6 per cent.
By contrast, most developed countries predicted under-performance in their domestic economies, Mr Serhan said.
“This appears to indicate a fundamental pessimism about the ability of their own economies to perform, and a reliance on other countries to provide much-needed stimulus, which is absent closer to home,” he said.
On the other hand, Australian investors mirrored global sentiments on oil prices, expressing uncertainty about the sector’s future.
“It seems that everyone was surprised by the freefall in the price of oil, which almost halved between October and January,” Mr Serhan said.
“Although we are experiencing a bounce now, investors continue to question where the price will end up and the wide-ranging flow on effects across all markets.”
Economists agree that the Reserve Bank is likely to remain in inflation fighting mode until December. ...