Investor Confidence Continues To Climb - State Street

Will Robins 29 July 2009

Investor Confidence Continues To Climb - State Street

Global investor confidence has risen again since April according to July's Investor Confidence Index, published by State Street Global Markets, the investment research and trading arm of Boston’s State Street Corporation.

In July's study the firm's Global Investor Confidence index rose by 3.6 points to 119.4 from a revised June level of 115.8. Across the regions, the confidence of North American institutional investors increased significantly from 113.8 to 120.5 while European investor confidence rose even more swiftly from 95.9 to 104.6.  The confidence of Asian investors rose as well, but only by 1.9 points to 94.2. 

“Investors are now adding risk to their portfolios at an impressive rate, faster than we have seen in several years.  In fact, this is the highest level the ICI Global index has reached since mid 2004,” said Harvard University Professor Ken Froot, who helped develop the index.
“That is an impressive turnaround over last October, when the ICI Global reached its lowest-ever-recorded level of 82.1.  Note the marked contrast with Consumer Confidence, which remains more focused on lagging unemployment,” added Mr Froot.

State Street Associates director Paul O’Connell also points to increased European confidence as investors begin to feel better insulated from the US situation. However Mr O’Connell also noted that Asian growth, though steadier, has been tentative. “There was never such an Asian wholesale fear of risk,” he said.

State Street's index measures investor confidence on a quantitative basis by analysing the buying and selling patterns of institutional investors; the more of their portfolio that institutional investors are willing to devote to equities, the greater their risk appetite or confidence is deemed to be.

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