Special Question of the ZEW Financial Market Survey: Lower Demand for Corporate and Government Bonds in 2014

Demand for corporate and government bonds continues to dwindle in 2014. Stocks as a capital investment are likewise expected to become less attractive. By contrast, raw materials are gaining importance as investment opportunities, while the attractiveness of foreign currencies and real estate remains largely unchanged in 2014. Investors are thus expected to place a greater focus on raw materials in their investment portfolios in the coming year. These are the findings of the special question on the “Attractiveness of different asset classes in 2014” in the current ZEW Financial Market Survey. 217 financial market experts participated in the December 2013 survey.

When it comes to the composition of investment portfolios in 2014, more than one third of experts (36 per cent) expect the share of stocks to fall. According to about half of the experts, corporate bonds will likewise lose ground. The demand for government bonds will continue to decrease in 2014. Almost two thirds of the survey participants assume that government bonds will lose weight within investment portfolios in the coming year. By contrast, raw materials are expected to considerably gain attractiveness in 2014 according to some 31 per cent of experts. Concerning foreign currencies and real estate, the majority of the surveyed experts believe that in 2014 both forms of investment will not be in greater demand than in the previous year.

In the special question of the current ZEW Financial Market Survey, the experts also assessed the future development of company stocks from important industries in Germany against the German stock index DAX. The development of stocks from mechanical engineering companies as well as from companies in the chemical and pharmaceutical industries received the most positive assessments. Stock prices of companies from these sectors are expected to perform better than the overall German stock index DAX according to 45 per cent of experts. While about 40 per cent of experts also expect a positive stock price development of companies from the consumer goods, IT, and telecommunications industries, the stock price performance of supplier companies is in particular met with scepticism.

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Zwetelina Iliewa, Phone +49(0)621/1235-346, E-mail iliewa@zew.de