US boosts global investor confidence
Institutional investor confidence has continued to climb this month by 8.7 points to reach 123, State Street’s Investor Confidence Index (ICI) for February 2014 has shown.
The confidence boost was spurred by North America, with its ICI rising 12.3 points to 125.5, up from January’s revised level of 113.2.
Investors in Asia also showed increased confidence, with the Asian ICI rising 3.3 points to 106.6 from the January reading of 103.3.
Offsetting this was the lukewarm risk sentiment in Europe, with its ICI dropping slightly from January’s revised 112.8 to 110.6.
“Our data does reveal regional weakness, notably in lack-lustre demand for European ex-UK equities, but overall suggests that institutions are adhering to their strategic plans, albeit with a slight defensive tilt to their sector allocation,” State Street Associates director Paul O’Connell said.
“So far this year we have seen institutions make meaningful additions to their equity holdings and this trend has remained intact despite questions about credit tightening in China, the pace of growth in the US and policy upheaval in Turkey, Argentina, Thailand and the Ukraine.”
Senior vice president Michael Metcalfe said while weaker US economic data and shaky emerging markets brought about a “dramatic correction” in global markets late January and early February, longer-term investors remained calm.
“Instead, they used the sell-off in risk assets as a buying opportunity and measured investor sentiment rose in all regions bar Europe.”
The ICI measures investor confidence or risk appetite quantitatively by analysing actual buying and selling patterns of institutional investors.
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