NZ Q3 investor confidence near 2-year high-survey

WELLINGTON, Nov 6 New Zealand investor confidence climbed to its highest level in nearly two years in the third quarter, with optimism growing amid signs the worst of the recession is over, a survey showed on Friday.

However investors are still cautious after the economic turmoil of the past year, and uncertain about which asset classes will provide the best returns over the next year, ASB Bank's investor confidence survey showed.

"A lot of it is looking back and seeing that we're past the worst, economically speaking, and we can see that some asset classes are starting to deliver decent gains again," ASB Chief Economist Nick Tuffley told Reuters.

A net 14 percent of respondents in the survey believed their investment returns would improve in the coming year, from a net 11 percent picking them to worsen in the previous quarter, the highest reading since December 2007.

It marked the largest swing in confidence in the survey's 11-year history, with confidence now a net 39 percent better than the record low seen in the three months to March.

Rental property remained slightly ahead of bank deposits as the most popular form of investment at 16 percent and 15 percent support respectively, followed by term deposits on 13 percent and managed investments on 7 percent.

Interest rates for bank deposits and mortgage rates have both fallen sharply as the Reserve Bank of New Zealand dropped the official cash rate to a record low 2.50 percent and pledged to keep it there, to combat the economic downturn.

New Zealand emerged from five quarters of recession in the three months to June, posting meagre 0.1 percent growth. The housing market, a traditional favourite with New Zealand retail investors, has shown signs of stabilisation in recent months with a recovery in house sales and prices.