Chartered Accountants ANZ’s latest investor confidence survey shows mum and dad investors are increasingly downbeat about New Zealand’s capital markets and listed businesses but have growing confidence in overseas capital markets.

Despite this, more than half of the 500 New Zealand retail investors surveyed say they will increase investment in the next 12 months – and that auditors are the most trusted group when it comes to protecting them as investors and strengthening market integrity.

“The result that jumps out is the lack of confidence in New Zealand’s domestic capital markets. The percentage of investors with some or more confidence in domestic capital markets dropped to 73 per cent from 77 per cent last year and 83 per cent at the height of Covid in 2020,” said CA ANZ Reporting and Assurance Leader Amir Ghandar.

“Similarly, the percentage of investors with some or more confidence in publicly listed companies has fallen to 76 per cent from 80 per cent last year and 86 per cent in 2021.

“In contrast, the percentage of investors with some or more confidence in overseas markets has climbed from 64 per cent in 2020 to 81 per cent in 2024.

“Across the board, confidence in domestic capital markets and publicly listed companies has fallen, while confidence in global capital markets outside has grown.

“We asked investors what their key concerns were, and inflation by far was the biggest.

“Anxiety around interest rates, future pandemics, climate change, and tax policy have fallen off big time – it’s all about inflation in New Zealand.

“The survey indicates that kiwis perceive the rest of the world is doing much better in the fight against inflation, and that other global economies have broken through with rate cuts or positive central bank signals.

“The last four years have been a rollercoaster, so it’s not surprising that many investors think there’s greener pasture overseas. Whether that’s true or not, this sentiment impacts the volume, type and location of investment.”

Despite the pessimism, 53 per cent of investors said they are likely to increase the scale of their investments in the next 12 months – down just three per cent from last year. Only 16 per cent said they wouldn’t increase investment in that period. “Bear in mind, this is a survey of mum and dad investors who are looking at macro trends, rather than day traders whose confidence might bounce between rock bottom and sky high in a day, or an even hour.

When asked about what they have the most confidence in, investors responded that term deposits, KiwiSaver, property and bank savings were top of their list, with shares in private companies and on the stock market further down, followed by crypto as a distant last.

“It’s not surprising that despite recent market fluctuations, retail investors will continue to pitch into term deposits, their KiwiSaver or a property portfolio,” continued Mr Ghandar.

Pleasingly, investors continue to rank independent auditors above financial analysts, stock exchanges, investigative journalists and government regulators, when it comes to investor protection, with 86 per cent of respondents saying they have confidence in audited financial reports.

“Audit is the unsung hero when it comes to delivering reliable and trustworthy information to businesses, investors and market observers,” continued Mr Ghandar.

“While Reddit’s wallstreetbets and various discord channels may be the source du jour when it comes to investing, it’s audited financial reports that provide the bedrock for good decision making.”

“The challenge for auditors is to make their reports more accessible, through improved digital reporting, so that retail investors can be more informed, whether investing locally or globally,” concluded Mr Ghandar.

Developed in association with the Center for Audit Quality in the United States, the sixth annual Chartered Accountants ANZ’s latest Investor Confidence Survey was completed between 12 and 27 June by more than 500 New Zealand retail investors mostly holding more than $10,000 on the share market, in addition to other investments such as managed funds, property and superannuation portfolios.

It aims to provide a window into how retail investors are feeling about capital markets, publicly listed companies, financial reporting and audit, and the groups who look after their interest. It also provides insight into topical issues like sustainability reporting, digital reporting, and the impact of changes in financial reporting.