Investors ‘optimistic’ for growth

IRISH investors believe the global economy will deteriorate further in 2011, but still rank as one of the most optimistic groups, according to a new report.

An international survey of moneyed investors by Barclays Wealth – the wealth management arm of Barclays Bank – ranks Ireland as the fourth most optimistic country in terms of mid-term global economic growth. Just over a quarter (26%) of those surveyed here think the economy will grow over the next five years.

Investors from Spain, Qatar, Saudi Arabia andIndia complete the top five; while those from Monaco, Japan, the US, Britain and Switzerland are the leastoptimistic.

“There is a big difference of opinion on what the next decade will bring for the global economy,” said Pat McCormack, head of Barclays Wealth Ireland.

“The global outlook of wealthy individuals is heavily tainted by experiences in their local markets. Wealthy individuals are notably more pessimistic than the majority of professional economists.

“Barclays Wealth shares this cautious outlook, as we judge that the high – and rising – burden of public debts may make it increasingly difficult for policymakers to keep the recovery on the road.

“Interestingly, while Irish respondents said that the Irish economy will deteriorate next year, they are much more optimistic than most of their European neighbours, believing that the global economy will grow in the next five years despite the current difficult market conditions and large public debt,” added Mr McCormack.

The report also noted a deterioration in wealthy investors’ satisfaction with the Government. As much as 80% of those surveyed here said they now trusted the Government less than before the economic downturn, while 50% said they “completely disagree” that the Government handled the downturn well.

Regarding the local investment preferences of Irish-based respondents, Mr McCormack said: “There is a large level of doubt about private equity among Irish investors over the next 12 months. They are, however, more positive on the long-term forecast, with 30% expecting equities to perform well. While there is uncertainty about the future performance of hedge funds from over half of the respondents, we believe that absolute return investing will increasingly become a significant part of client portfolios as the industry becomes more liquid, transparent and regulated.”

“Irish investors are displaying similar traits to their global counterparts, with 40% reviewing their investment portfolios more regularly,” he added.