A measure of investment sentiment by Japanese financial services giant Nomura fell slightly in August from July, with heightened awareness of international tensions in regions such as Ukraine taking a toll.

A measure of investment sentiment by Japanese financial services giant Nomura fell slightly in August from July, with heightened awareness of international tensions in regions such as Ukraine taking a toll.

The Nomura Individual Investor Market View Index, which is based on respondents' three-month outlook for share prices and calculated by subtracting the percentage of responses for "fall" from that for "rise," was 43.0 for August, a decline of 1.6 per cent from 44.6 in July.

The share of respondents expecting a “rise of about 1,000 points” accounted for the majority at 54.2 per cent, though that was down marginally. The Nikkei Average reference level (4 August close) was 15,474.50, up 148.30 from the previous survey (1 July close of 15,326.20), although slightly more respondents appear to be expecting share prices to soften in future, the firm said in a statement yesterday.

Earlier this week, the monthly Bank of America Merrill Lynch fund managers’ survey for August showed investors are fretting more about geopolitical risk (see here) and curbing their risk appetite. Firms such as Rothschild and Investec have cut risk exposures.

In the Nomura survey, when about the biggest influence on their thinking, respondents said international affairs was the biggest factor.

“We see this as reflecting heightening concerns of the situation overseas in Ukraine, the Middle East, and elsewhere. The response rate for domestic politics saw the largest month-on-month decline for all the options, of 3.4 percentage points.

Capital goods/other remained most appealing sector, the survey found.

A higher proportion of respondents in August expected the yen to appreciate against the dollar in the next three months; those taking this view stood at 44.5 per cent, up from 10.2 percentage points from the 34.3 per cent figure in July.

The survey findings are drawn from responses to 3,000 questionnaires sent randomly to people out of Nomura’s total of approximately 24,000 people who take part in Nomura Investor Relations’ internet monitor questionnaire service.

One of the consequences of events post-9/11 to the present day has been that political risk has re-emerged as a factor tracked as a distinct factor in investment decisions.