SINGAPORE Feb 7 (Reuters) – Singapore retail
investors have become more pessimistic about the investment
outlook over the past six months and are shunning the United
States and Europe in favour of safe haven investments closer to
home, a poll released on Tuesday showed.

The J.P. Morgan Investor Confidence Index, taken every six
months, stands at 86, the lowest since it was launched a year
ago. An index level of 100 is neutral, while 200 is extremely
optimistic and zero is extremely pessimistic.

The index has fallen from a reading of 121 in July last year
and 134 in December 2010, when it was launched.

“The trend has been a flight to quality and to safe haven
investments such as deposits and bond funds that are generally
less volatile than equity funds,” Brian Tan, J.P. Morgan Asset
Management’s head of retail sales, said in a statement.

“We expect it will be more of the same in the coming months
although we think investors should diversify and also invest in
riskier assets given the attractive valuations.”

Singapore’s trade-driven economy contracted in the last three
months of 2011, signalling it may slip into a technical
recession as a slump in manufacturing output and a slowdown in
external demand hurt exports.

The online polls are part of a series of regional polls by
the fund management arm of J.P. Morgan in Asia. The
Singapore poll sampled 502 investors with an annual personal
income of more than S$60,000 and at least five years investment
experience.

The survey found Singapore remained the favourite investment
destination among the respondents over the next six months,
followed by Asian regional markets and real estate as more
investors shun the United States and Europe due to perceived
higher risks.

Singapore has announced new measures to cool the
city-state’s residential housing market, which has held up well
despite a slowing economy, helped by low interest rates and
rising demand from overseas investors.

(Editing by Richard Pullin)