Over half of Maltese investors have ‘negative feelings’ towards local investment market – survey

The Maltese don’t trust local investments, but are nonetheless saving for retirement and feel assured of their ability to maintain a decent lifestyle after retiring, according to a new survey conducted during September 2023.

The BOV Asset Management Investment Sentiment Index, in its seventh edition, is carried out by Marketing Advisory Services, whose director Daniel Abela presented the results during an event last week.

Mr Abela explained that findings indicate that during the past 12 months, the local investor has shown signs of becoming more cautious. This is potentially the result of variables like geopolitical tensions and the decrease in interest rates of bonds, which impacts investors’ appetite.

A closer look at the current investment strategies employed by the local investor shows that 42.6 per cent of them still rely primarily on bank deposits as the financial instrument for investments, whilst a further 40.9 per cent claimed that they do not presently intend to invest or are unsure of their plans in this regard for the coming three years.

The latter’s motivation was split between being unable to afford it and skepticism in investments being the right vehicle for generating value, opting for other alternatives. Property featured highly among these alternatives, buttressed by a general perception that it is a safe option.

The sentiment towards the current investment market has decreased when compared to scores achieved in previous years, with 57.5% expressing negative feelings towards the local investment market. However, the market expects investments to do better in the next 12 months, primarily in relation to real estate, government stocks and bonds.

The study focused specifically on investors’ perceptions of retirement and their aptitude for retirement management instruments, including personal pension plans.

It transpires that 51 per cent of the sample felt confident that they would be able to maintain their current lifestyle after retiring, with females showing greater concern than their male counterparts.

Most of the respondents (88.7%), when given multiple options to choose from, said they are only looking to maintain a comfortable lifestyle and be able to take care of basic expenses like rent, utility bills and health care.

This motivation outweighs by far other goals like travelling which only account for 32.1 per cent of the respondents.

It is also interesting to note that 28.3 per cent of the respondents plan to work past the retirement age, primarily because they wish to continue working. This motivation is closely followed by a concern that they would need to supplement the government pension to cover the daily expenses. On the other hand, there is relatively higher confidence that the National Healthcare System will continue to provide benefits, commensurate to the ones they are enjoying today.

When asked about retirement savings, 44.1 per cent of respondents confirmed that they are actively saving for their retirement. Among those under the age of 30, only 29.1 per cent said they have begun saving for their future. This was primarily attributed to the fact that most respondents cannot afford it, with the need to pay off loans being the most popular response.

Addressing BOV representatives from across the bank’s network of branches and investment centres, Mark Agius, head of BOV Asset Management, explained the goal behind this initiative which is now in its seventh year.

“The findings from the BOV Asset Management Investor Sentiment Index contributed towards the bank’s decision to hold financial literacy sessions across its retail network. In fact, during 2023, such sessions were held in eight localities, with more planned for 2024.”

Mr Agius also mentioned how investment decisions need to be aligned to the customer’s lifecycle changes, and the financial advisor has an important role to play in understanding the customer’s circumstances and offering different financial solutions.

Thanking MAS for their work, he added that “BOV is committed to conducting this research on an annual basis, thereby enabling all key players to keep abreast of investor sentiment and take action as necessary.”