Singapore's retail investors sound increasingly gloomy over the country's outlook as the island nation gears up to celebrate its 50th anniversary, according to a new survey.
A bi-annual survey of investor sentiment by JPMorgan Asset Management dropped to its lowest level in two years amid expectations for weak investment conditions, the firm said this week.
The number of respondents expecting the benchmark Straits Times Index to decline over the next six months nearly doubled to 21 percent in December from 11 percent in the previous survey in June. The Straits Time Index gained 6.5 percent in 2014, broadly underperforming regional peers including Indonesia's Jakarta Composite, which shot up 15 percent.
"The survey results indicate that one should be cautious," said Vishnu Varathan, senior economist at Mizuho Bank. "Some of the sentiments in the survey reflect a softening property market, since that makes up a significant amount of household wealth." An estimated 47 percent of Singapore's household wealth is in real estate, according to Credit Suisse. House prices in the city, among the world's highest, cooled in 2014 as sales of private residential units dropped an annual 50 percent in the first 11 months.
More investors are also opting for capital preservation – 46 percent compared with 41 percent in June, the survey showed – suggesting a low appetite for risk.
"Singaporean markets have been a straightforward growth story over the past few years so it's unlikely that we'll see any big declines," Song Seng Wun, regional economist at CIMB told CNBC. The loss of confidence among retail investors may have more to do with punting and making quick profits, he warned.