Investor confidence takes a breather
Some of the edge may be coming off the investor confidence that has accompanied recovering markets, according to the latest State Street Investor Confidence Index.
The September index, released today, revealed that the level of investor confidence had actually declined marginally during the month, the first reverse in eight months.
The index showed that global investor confidence had declined by 4.7 points to 118.1 during September, with confidence among North American institutional investors declining by 4.6 points from 118.3 to 113.7, while confidence improved marginally in both Europe and Asia.
Commenting on the index, Harvard University professor Ken Froot said after eight consecutive increases in global investor confidence, institutional investors had taken a breather in September and consolidated their holdings of risky assets.
However, he said the index reading of 118.1 was still comfortably in the range associated with the accumulation of risk exposures, as a reading of 100 signifies neither accumulation nor decumulation.
Froot said there had been a recognition that a portion of the recent rise in global equity prices could be attributed to liquidity expansion rather than fundamental opportunities, with the result that institutional investors were pausing to assess the balance.
AUTHOR
Mike Taylor
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