“Investor confidence in the Japanese market had taken a hit as the country confronted its worst wave of the pandemic. The latest HL survey showed confidence in Japan fell by 8% in August, so it’s not surprising that the news of Yoshihide Suga departure saw stocks in Tokyo lift in response. By announcing he won’t run for re-election in the upcoming leadership race, he’s stepping down as premier, to make way for a successor to try and halt soaring infection rates. Although the Nikkei ended up 2%, gains may have been held back, because Suga was considered to be pro-business and had spearheaded a drive to promote a more digital focused economy, and push firms to become leaner and more efficient to solve Japan’s sluggish productivity problem. Investor confidence in Japan is now likely to lift, but the political turmoil of Suga standing down after only just a year in position, following the near eight year Abe era, may weigh on future gains. The ruling party is now in a race to find a new leader just weeks before the general election, and as candidates jostle for pole position, uncertainty is likely to reign on the markets.”
Q2 2021 hedge fund letters, conferences and more
HL Investor Confidence Survey – August 2021
- Investor confidence in the UK market rose by 4% in August compared to July, as social distancing and quarantine restrictions eased, and vaccine roll outs continued.
- This compares to a 5% fall in July compared to June, after delta infection rates began to soar and companies struggled to cope with the ‘pingdemic’ caused by isolating staff.
- Confidence in the European market saw the largest rise, increasing by 8% as EU member countries played catch up in vaccine roll outs
- The biggest drop in confidence was for the Japanese market, falling 6% as the country confronted its worst wave of the pandemic.
| Global Sectors | % Change August 2021 vs July 2021 |
| Asia Pacific | -3% |
| European | 8% |
| Global Emerging | -4% |
| Japanese | -6% |
| North American | 3% |
| UK | 4% |
| Average % Change | 0% |
*The investor confidence index is compiled by surveying clients on a monthly basis. Each month we send the investors’ confidence survey to 6,000 random clients and there is a representative split of our clients by age. On average 10% of clients respond (around 600 clients).
Clients are asked to say how likely they are to invest in a certain sector over time frames of 6 months, 1 year and 3 years, by selecting Very Likely, Likely, Neither Nor, Unlikely or Very Unlikely.
Article by Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown
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