Investor sentiment ‘improving’

Investor sentiment is improving across the eurozone, according to two major surveys just released.

The Sentix Investor Confidence Index has reached its highest level this year, while the Barclays Global Macro Survey finds that two-thirds of respondents do not expect the eurozone to break up over the next 12 months.

The Sentix Index went from -18.8 in November to -16.8 in December, which is the fourth monthly increase in a row and is now at its highest reading in 2012.

Moreover, confidence about the health of the region in six months’ time has also reached its highest level since May 2011.

“That means that there are now almost as many optimists for the future developments in the eurozone economy as there are pessimists,” said Sentix senior analyst Dr Sebastian Wanke.

The main factor underpinning improved investor confidence has been measures introduced by the ECB, added Dr Wanke.

At a conference in July, the head of the ECB Mario Draghi said he would do whatever it takes to keep the euro together.

In September, the ECB launched the Outright Monetary Transactions (OMT) programme, which pledged unlimited purchases of sovereign members’ debt in return for structural reforms.

Dr Wanke noted that manufacturing data and the German ifo index, which is a measure of business confidence, have both risen over recent months.

The Barclays Global Macro Survey canvasses the opinions of 400 major investors for its findings. It also found that sentiment was improving.

“The likelihood of an imminent break-up of the eurozone has diminished; 72% of all respondents now think that no country will leave it in the next 12 months, up from 57% in September and well above the 42% who thought that in June.

“In common with pervious surveys, among those who think that there will be some breakup, most believe that it will be restricted to just Greece leaving: only 6% think that any other country will leave over the next year. These represented the most optimistic answers to this question since it was first asked in the Dec 2011 survey,” according to the Barclays Global Macro Survey.


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