- With the ongoing debate over improvements to the rail network, together with reports suggesting China is planning to invest billions into UK infrastructure over the next 10 years, many investors report they are planning to increase their exposure in the sector, according to the latest Halifax Share Dealing Market Tracker.
- Lloyds Banking Group
A third (33.1%) of investors say they are planning to invest in energy projects in the medium to long term, with more than a quarter (28.2%) saying they may increase their exposure to transport projects.
Commercial construction (23.8%) and residential projects (19.9%) are two other areas of interest to a high proportion of investors – both of which have been linked to possible foreign investment recently. And just 26.5% of investors are not planning to increase their exposure to UK infrastructure in the medium to long term.
Rise in financial services
Investor portfolios have begun to take a different shape from last month. Over two thirds (65.5%) of investors were invested in financial services in October, up 5.1% in the last 12 months, although this is still below the May 2014 high of 73.7%.
From being the most heavily invested sector last month, energy & mining has dropped behind financial services with 61.1% of investors holding stocks in October, down 5.6% from October 2013.
Consumer services has seen the largest rise in the number of investors holding stocks in the last year, up 21.9% from October 2013 to 56.2% of investors last month, the highest level it has been at in 2014.
The other notable change is general industries with 45.3% of investors invested here, up 23.1% since October 2013.
Investors’ outlook was more positive in October than the previous month, with the proportion of retail investors who believe the value of their portfolio has increased over the past six months up to 32.4% from 27.5% in September, and the proportion who think it has stayed the same up to 35.7% (from 30.8%). This still reflects lower confidence in portfolio performance in the second half of 2014 against the first half.
Outlook for the FTSE
The recent rise in investor optimism could reflect investors’ changing attitudes to the FTSE. In the short term, nearly a third (32.4%) believe the FTSE will be higher in a month, representing the highest level of confidence since December last year – a 23% rise from September. This is matched by a similar fall in those who believe the FTSE will be lower in a month, down to 13% from 36.4% last month.
This optimism stretches forward to six months time, with two in five (41.6%) of investors expecting the FTSE 100 to be higher in six months time, and just under two thirds (63.8%) expecting it to be higher in a year.
Damian Stansfield, managing director of Halifax Share Dealing, says:
“With heightened activity in the infrastructure space in the UK as a result of large-scale projects and influx of foreign investment, it’s understandable why some investors are choosing to increase their exposure to the sector.”
“Investors appear to have been buoyed by the latest round of economic data and thoughts over the short term prospects of the FTSE 100 have improved. As we move towards the year end there will inevitably be an increase in speculation as to what 2015 will bring, but investors need to remain mindful of their long term strategy and continue to do their own research.”