Institutional investor confidence has reached its highest level since December last year, with easing macroeconomic conditions boosting risk appetites among investors.
The latest State Street Investor Confidence Index rose globally in May, increasing 6.8 points to 104.1 from April’s revised reading of 97.3.
Harvard University professor and co-founder of the index, Kenneth Froot, said these softening macroeconomic conditions had been reflected in equity and commodity prices.
“As we have seen on a number of occasions in the past, institutional investors sometimes view these periods as opportunities to accumulate additional equity exposure, and this month is no exception,” he said.
The charge was led by North American investors, who experienced a 7.7 point rise in confidence to 106.3 from April’s revised reading of 98.6.
Despite weakening over the last few months, European investors also experienced an increase in confidence to 79 points, up 5.2 points on April’s level of 73.8.
But it was Asian investor confidence that fell slightly during this period, down 2.7 points to 96.7 from April’s level of 99.4.
Froot said the lowered confidence in the Asian region could be put down to a slight reduction in growth prospects.
“It remains to be seen whether the decline in commodity prices and the prospect of slightly lower activity levels will allow emerging markets policy makers to pause in their tightening cycles, something which would encourage further allocations to risky assets,” he said.
