NZ investor confidence hits 10-yr low in Q1-survey

WELLINGTON, April 29 (Reuters) - New Zealand investor confidence tumbled to its lowest in ten years in the first quarter, with sentiment hurt by the country's deep and prolonged recession, a survey showed on Wednesday.

A net 25 percent of respondents in the ASB Bank investor confidence survey believed their investment returns would deteriorate in the coming year, from a net 20 percent pessimism level in the previous quarter.

It was the third consecutive quarterly decline and the lowest confidence level since 1998.

"Uncertainty over investment options, job security and the world economy has put people into a 'wait and see' mode, making readily accessible money in the bank a clear winner as people play their cards closer to their chest," said Jonathan Beale, ASB's head of investments services, in a statement.

Bank savings were the favoured investment option for 21 percent of respondents, up from 16 percent in the fourth quarter. Residential property investment, usually the most favoured investment, remained second on 15 percent.

Data this month has shown house prices up to 9 percent lower than a year ago, although there have been industry reports of a levelling out in the market and an increase in the number of houses sold.

Of the other investment options, support for term deposits eased a couple of percentage points to 13 percent, and sharemarket investments fell slightly to 6 percent.

"Overall, the report confirms that investors are in a holding pattern while the markets fluctuate," Beale said.

New Zealand has been in recession since the beginning of 2008 and it is expected to show little or no growth until 2010.

The Reserve Bank of New Zealand has slashed its official cash rate to a record low 3 percent and is expected to deliver a further 50 basis point cut on April 30 to help lift the economy out of recession. (Reporting by Gyles Beckford)