Over 50 per cent of investment managers are adopting defensive positions in response to the fragile macro environment, according to a survey of attendees at Citi’s annual Australia and New Zealand Investment Conference.
Ninety per cent of the over 1,500 conference delegates believed China had not done enough to stabilise its economic growth in response to the Evergrande crisis, outbreaks of the Delta strain of COVID-19 and technology regulation.
On credit portfolios, 56 per cent of investors suggested they would shorten duration and stay defensive, 25 per cent said they will extend duration and 18 per cent remained bearish with a preference for building up cash buffers.
“The record high level of attendance and participation from Citi’s clients signals they are wrestling with many macro and micro risks,” said Mark Woodruff, Citi Australia’s head of investor sales.
“Topics such as higher inflation, a slowdown in China and the impact of higher energy prices were front of mind during the conference.”
On the local front, 80 per cent of investors anticipated that the federal government will set a target of reaching net zero emissions by 2050 in the lead up to the UN Climate Change Conference (COP26), however 61 per cent suggested that the target would come with some caveats.
Thirty-nine per cent said that they believed measures recently introduced by the Australian Prudential Regulation Authority will be successful in slowing house prices and mortgage credit, while 60 per cent said that stronger measures will be introduced later on.
“The poll results indicate that beyond the macro influences, there is significant changes at a sector level that requires an understanding of both local and international influences, which is where the Citi conference stands out in terms of clarity and insight,” Mr Woodruff said.
