Investor confidence sees largest 2022 drop

The State Street Global Investor Confidence Index (ICI) for November continued on its downward trend from last month.

The 14.0 point decline from October’s 104.4 reading to 90.4 in November, contrasted the previous five month period of increasing investor confidence.  

State Street attributed the decrease to the 15.0 point drop in North American investor confidence (now at 88.7) and a 14.2 drop in the Asian ICI (now at 91.0). 

Opposing this, European investor confidence experienced an increase of 5.4 points, now at 91.8.

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Marvin Loh, senior macro strategist at State Street Global Markets, noted that the 14.0 point global decrease in investors’ risk appetite was the largest contraction it had experienced this year. This indicated “falling equity allocations and overall market confidence,” he commented.

“Growing recessionary concerns in North America contributed to the overall decline, with this regional measurement falling 15 points to 88.7, its lowest reading since the start of the pandemic.”

Loh added: “Asia recorded a comparably sizable 14.2 point decline to 91.0, as China’s continued adherence to its strict zero-COVID policy obfuscated an expected regional rebound”.

The Investor Confidence Index was developed at State Street Associates, State Street Global Markets’ research and advisory services business, in partnership with FDO Partners.

It measured investor confidence or risk appetite quantitatively by analysing the actual buying and selling patterns of institutional investors.

A reading of 100 would be neutral; it would be the level at which investors were neither increasing nor decreasing their long-term allocations to risky assets.