KEY POINTS:
Investor confidence has continued to decline in line with the "sombre" environment created by the US housing market crisis, ASB says.
The bank's latest quarterly investor confidence survey shows a fall in confidence in the December quarter to a net 19 per cent of respondents who say things
are better, down from 22 per cent in the September quarter and a survey high of 29 per cent in June.
Jonathan Beale, head of investment services, said the survey showed 2007 was definitely "a year of two halves" for investment.
The start of the year was pretty buoyant, with local and global shares rising and the New Zealand housing market remaining hot.
"Over the second half of 2007 it became clear the problems in the US housing market were spreading, triggering concerns about global credit markets and the health of the overall global economy.
"I think it's probably a reflection of what people are seeing and reading more than actually the reality of what's happening to their investments," he said.
Confidence in the various asset classes changed little over the December quarter, although there was some volatility.
Month-by-month results showed confidence in rental property had a rocky ride, plunging in October to 17 per cent but rebounding in December to 26 per cent.
"It may be that bricks and mortar are seen as safe, despite the fact that the local housing market is showing some signs of slowing and interest rates are higher," Beale said.
Having gained confidence immediately after the introduction of KiwiSaver, managed investments were largely stable over the fourth quarter ending the year at 13 per cent.
The survey also showed high awareness of KiwiSaver with 95 per cent of respondents now aware of it, compared with 72 per cent a year ago.
However those respondents who were aware of KiwiSaver but did not intend using it had increased to 43 per cent, from 33 per cent in the third quarter.
Beale said the Government deserved full marks for its advertising campaign to get people aware of the scheme. "I suppose it's now converting people into actually joining."
Confidence in shares was stable with an average 9 per cent confidence level over the last quarter - until it fell in December.
Confidence in term deposits was steady at 12 per cent over the quarter, but also showed some signs of losing ground at the end of the year.
Perceptions towards finance companies, after another one failed in November, could have affected that category, Beale said.
* DOWN NOT OUT
Investor confidence declined in the December quarter, as sentiment from the US sub-prime mortgage crisis began to bite.
Confidence in rental properties had a rocky road, but rebounded at the end of the quarter.
Confidence in managed investments is solid on the back of KiwiSaver, but many respondents still don't intend to take the scheme up.