Confidence climbing as UK equities and property rebound – Lloyds

Added 17th August 2016

Data produced by Lloyds Bank revealed appetite for investing has rebounded strongly from its Brexit-triggered July lows, with investors warming once again toward risk assets.

Confidence climbing as UK equities and property rebound – Lloyds

Investor confidence stands at its highest level in 2016 so far, growing by 8.13% since July, according to the Lloyds Bank Investor Sentiment Index.

UK equities and property experienced the most drastic improvement in investor sentiment between July and August, the Lloyds research found, rising 23.98% and 13.02%, respectively. 

This display of renewed confidence in UK equities and property, asset classes that were both ravaged by the results of the referendum, closely mirrors the actual performance of these assets over the past month, said Lloyds Private Banking CIO, Markus Stadlmann.

“Actual performance of the asset classes over the past month has correlated with the overall sentiment by being predominately positive,” he said. “Only commodities experienced month on month declines, falling 11.1%, despite a slight increase in sentiment. UK and Eurozone equities were the strongest performers, despite the latter having displayed very negative sentiment since records began.”

In fact, all asset classes aside from gold and cash registered improved investor sentiment over the last month in spite of persistent market volatility.

Investor enthusiasm for historically risky emerging market equities maintained its positive momentum of the past four months, increasing by another 8.63% between July and August.

And investor confidence in Japanese equities moved into positive territory for the first time in 12 months.

Attitudes toward UK government and corporate bonds showed the most improvement seen in the last 12 months with 13.3% and 8.1% more investors favouring each asset class. 

Eurozone shares, while still in negative sentiment territory, saw a positive change in investor perception of 10.67%.

While gold remained the asset class of choice for 41.45% of investors, Stadlmann said the investor turnaround witnessed in August was still encouraging news and evidence that the post-Brexit dust has begun to settle.

“It is still early in the process, but as the economic data starts to come through, the post-referendum outlook will become clearer for investors. For example, if we see clear evidence of real salary growth, this should be positive for UK households and would benefit the economy, but if domestic spending falls it will have an impact on specific companies and sectors. At present, UK equities appear to be proving resilient, and generally we are beginning to see more positive news emerge globally,” he said.

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