Surveys
North American, European Investors' Confidence Rises, Asia Dips
The index tracks the actual selling and buying actions of investors rather than simply measuring their opinions. The results shed light on how different parts of the world are showing varying attitudes around financial markets amid the pandemic.
Asian investment confidence fell in April although North American
and European investors actually became a bit more optimistic,
perhaps emboldened by the massive central bank stimuli, according
to a monthly barometer from State Street.
The Global Investor Confidence Index decreased to 73.0, down by
0.7 points from March’s revised reading of 73.7. The Asian ICI
plummeted by 18.3 points, falling to 80.0 from 98.3 points.
Meanwhile, North American ICI inched upward by 1.2 points to 68.0
and the European ICI rose from 95.5 to 102.8 points.
The index measures the actual buying and selling moves of
investors rather than what they say in response to opinion polls,
so it tracks their revealed preferences rather than just stated
views. The methodology was crafted by State Street Associates,
State Street Global Markets’ research and advisory services
business. A reading of 100 is neutral; it is the level at
which investors are neither increasing nor decreasing their
long-term allocations to risky assets.
“Investor confidence dipped slightly in April, largely driven by
weaker sentiment for Asia,” Rajeev Bhargava, head of Investor
Behavior Research, State Street Associates, said.
“Despite an end of the lockdown in China, the Asia ICI fell to
its lowest level since 2005, possibly a reflection of weaker
economic data regionally and renewed concerns over the region’s
ability to sustainably exit lockdown as cases resurface in
previously locked-down countries. In contrast, however, US and
Europe showed stability in investor appetite this month with
Europe actually seeing a material rise in investor confidence.
The unprecedented amount of stimulus central banks have injected
into markets as well as signs of a slowing in new COVID cases
locally seem to have had a stabilizing effect on risk behavior.”
