Confidence in global economy wanes, says Skandia International

Confidence in the global economy fell for the first time in 12 months among advisers located worldwide, according to the latest quarterly survey from Skandia International, part of Old Mutual Wealth.

Responses were received from some 349 advisers from Hong Kong, Singapore, UAE, UK, Europe, Africa and Latin America. Their combined confidence level fell to 5.8 out of 10 from the previous quarter’s score of 6 out of 10.

Skandia International said that advisers in the UK were the only ones to retain the same level of confidence quarter on quarter. This adviser community was also the only one to report an increase in confidence in the local economy.

Confidence fell most in the UAE, where the score dropped to 5.8 from 7.1. Continental Europe’s adviser community also saw a fall to 5.2 from 6.2.

All regions saw a fall in confidence in the Chinese economy, with the biggest fall seen in Singapore.

James Millard, director of investments at Skandia, said: “The recent difficulties in Asia are understandably impacting on global confidence. The abundant liquidity that had poured into the region following the global financial crisis is becoming increasingly scarce, and advisers and investors are becoming increasingly cautious.”

“A stronger dollar on the back of potential tapering of quantitative easing from the Fed and growing expectations of a US economic recovery has drained liquidity from emerging markets and commodities. Asian markets, particularly China, have suffered relatively. Compounding factors include; an overstretched banking system and slowing economic growth in China, whilst yen depreciation has also made non-Japanese exporters in Asia less competitive in a time of lacklustre global economic growth.”


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