Investment professionals around the world are reporting greater optimism about economic prospects for the coming year, according to the CFA Institute 2014 Global Market Sentiment Survey (GMSS), with optimism
in Singapore almost doubling. Of those surveyed here, 59 per cent predicted an expansion of the global economy, up from 32 per cent a year ago.
However, these same professionals also cited some concerns over global market integrity, with those in Singapore and Switzerland being the two most critical groups on the issue of a lack of ethical culture within firms.
These were among key findings of the online survey conducted between Oct 2 and 17, which drew responses from 6,561 members in over 110 countries.
Overall, 63 per cent of the respondents said they expect the global economy to expand in 2014 - a significant shift from last year, when only 40 per cent of members expressed optimism about the worldwide economy.
Most optimistic this year were members in the United Kingdom (78 per cent) and Brazil (74 per cent). Most cautious were two Asian nations: Hong Kong with 54 per cent, and China with 48 per cent.
At the same time, investment professionals did not rate the integrity of global markets this past year (2013) highly.
Respondents in Singapore and Switzerland were the most critical about the lack of ethical culture within financial firms, with 63 per cent in Singapore and 71 per cent in Switzerland naming it as the top factor contributing to the current lack of trust in the finance industry. Globally, just over half (54 per cent) of respondents indicated so.
"The survey reflects that investor trust has been eroded and in order for the financial industry to be an extraordinary force for good, we must embrace ethical behaviour at all levels," said John Rogers, CFA, president and CEO of CFA Institute.
"As markets rebound, we are working to ensure that attention does not shift away from meaningful reforms that might restore investor trust and strengthen the financial system's ability to resist shocks in the future."
Singapore also leads the world's major markets in calling for top management and executives to establish and encourage better culture within the firm. Just under half (49 per cent) the respondents here said this is the most needed action to help improve investor trust and confidence - compared to 40 per cent globally.
Investment professionals in Singapore were also among the most concerned about market fraud, and feel that this issue will worsen going ahead. Thirty per cent said they see market fraud as the most serious ethical issue facing both local and global markets in the coming year. This is almost three times higher than last year, when only 11 per cent cited this as the most serious ethical issue locally, while 15 per cent felt it was the dominant problem for global markets.
Worldwide, mis-selling (25 per cent) ranked as the top ethical issue locally, with market fraud a close second (24 per cent).
Globally, 29 per cent said the most needed action to improve investor trust and market integrity is improved regulation and oversight of systemic risk. This sentiment is stronger in the Asia-Pacific (40 per cent) than in Europe, the Middle East and Africa (33 per cent) and the Americas (24 per cent).
A majority of members also said that increased global coordination of monitoring systemic risks is the most likely way to prevent future financial crises. One fifth (21 per cent) said there is a need for improved transparency in financial reporting and other corporate disclosures.
Daryl Liew, chair of the advocacy committee and board member of CFA Society Singapore, said: "The strong call for greater ethical culture within firms suggests that the investment community here recognises a need for, and also demands, higher standards in ethical behaviour and integrity, as Singapore emerges rapidly as a top investment and wealth management centre in the world."