Latest media releases


Investor Optimism Rises Slightly in September, According to UBS Index

| Media Releases Americas

Investors Split Over How War With Iraq Would Affect the Nation's Economy

Overall optimism rose slightly for the second month in a row as investors express less anxiety about the negative conditions impacting the investment climate, according to the Index of Investor OptimismĀ®, a joint effort of UBS and the Gallup Organization.

Currently at 60, the overall Index increased 8 points from 52 in August. Conducted monthly, the Index had a baseline of 124 when it was established in 1996.

In September, investor's expectations for short-term return, over the next 12 months, held relatively steady at 7.6 percent, compared with 7.4 percent last month. Notably, the expectations of younger investors, those under age 40, continue to be much higher than that of older investors, those over age 40. In fact, the short-term expectations of younger investors' increased to 11.9 percent in September from 10 percent in last month, in contrast to a slight decrease among older investors to 6.5 percent from 6.7 percent in August.

This month, investors were surveyed about the current state of the nation's economy, and its prospects for recovery. Importantly, investors are split over whether the recent economic downturn has hit bottom, with 45 percent responding that it has reached bottom, and 52 percent saying it has not. Substantial investors, those with more than $100,000 in investable assets, were more likely to say the economy has bottomed, with 52 percent holding this opinion compared with 41 percent of average investors, those with $10,000 - $100,000 in investable assets.

Overall, a majority of investors, 52 percent, agree that the nation's economy will not be as strong a year from now as it was at the end of the 1990s. This is compared with 28 percent who say it will be about as strong, and 19 percent who believe it will be stronger.

In September, investors were also surveyed about what factors are impacting the nation's investment climate. A majority of those surveyed, 70 percent, cite questionable accounting practices as having a very negative effect, down from 80 percent in July when investors were last polled on the subject. This is followed by current corporate earnings, 39 percent (47 percent in July); discussions of a possible U.S. attack on Iraq, 39 percent; and the threat of more terrorist attacks, 38 percent.

While a slight majority of investors, 52 percent, believe a war with Iraq will have a negative effect on the nation's economy, more than one-third, 36 percent, say it will have a positive impact, and 8 percent believe it will have no economic implications.

Approval for the Federal Reserve remains strong at 89 percent among those investors who report having an opinion. In September, nearly two-thirds of those surveyed, 63 percent, expect the Fed to hold interest rates at the same level over the next three months -- the same percentage who held this opinion in June when investors were last polled on the subject. In contrast, 21 percent of those surveyed now expect a rate cut in the short-term, up from 10 percent just three months ago, and only 12 percent of investors believe the Fed will increase rates in the next three months, down from 23 percent in June.

These findings are part of the 53rd Index of Investor Optimism, which was conducted from September 1 to September 15. To track and measure Index changes on an ongoing basis, new samplings are taken monthly. Dennis J. Jacobe, research director for Gallup, said the sampling included 1,004 investors randomly selected from across the country. For this study, the American investor is defined as any person who is head of a household or a spouse in any household with total savings and investments of $10,000 or more. Nearly 40 percent of American households have at least this amount of savings and investments. The sampling error in the results is plus or minus three percentage points.

In January 2002, UBS established the Index of Investor Optimism - EU 5, the European counterpart to the U.S. survey covering France, Germany, Great Britain, Italy and Spain. This month, 1,000 investors across these EU markets were polled from September 1 to September 15. Overall optimism registered at negative (24) in September, down from negative (1) last month.

For more than 60 years, the Gallup Organization has been a recognized leader in the measurement and analysis of people's attitudes, opinions and behavior. While best known for the Gallup Poll, founded in 1935, Gallup's current activities consist largely of providing marketing and management research, advisory services and education to the world's largest corporations and institutions.

UBS AG is a leading global financial services firm with 71,000 employees worldwide, providing a wide range of services to a client base that includes affluent individuals, corporations, institutions and governments. Headquartered in Switzerland, the bank has significant operations in all of the world's major financial centers and is comprised of four business groups; UBS Warburg, UBS PaineWebber, UBS Wealth Management and Business Banking, and UBS Global Asset Management.

Additional information about the Index of Investor Optimism can be found at www.ubs.com/investoroptimism

UBS Index of investor optimism overall trend

OVERALL INDEX

02 September

60

02 August

52

02 July

46

02 June

72

02 May

90

02 April

89

02 March

121

02 February

92

02 January

115

01 December

88

01 November

84

01 October

86

01 September

50

01 August

76

01 July

74

01 June

85

01 May

90

01 April

81

01 March

82

01 February

77

01 January

96

00 December

106

00 November

130

00 October

132

00 September

147

00 August

160

00 July

143

00 June

149

00 May

155

00 April

140

00 March

150

00 February

168

00 January

178

99 December

174

99 November

148

99 October

139

99 September

160

99 August

149

99 July

166

99 June

146

99 May

163

99 April

168

99 March

151

99 February

167

98 December

141

98 September

147

98 June

160

98 March

161

97 December

151

97 September

151

97 June

152

97 February

128

96 November

125

96 October

124