Investor confidence declines in January

30 January 2020
| By Chris Dastoor |
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Investor confidence declined in January by 3.2 points to 76.5, with the largest fall from European investors, according to the latest results of the State Street Investor Confidence Index (ICI).

The North American ICI fell 3.4 points to 68.2, Europe fell 3.9 points to 105.5, but China rose 4.8 points to 93.9.

Michael Metcalfe, head of global macro strategy at State Street Global Markets, said it’s telling confidence of European investors had continued to fall.

“This is similar to the first round of asset purchases from the European Central Bank (ECB) that the promise of buying has as big – if not bigger – signalling effect for investors than the action of buying itself,” Metcalfe said.

“Meanwhile, the cut-off date for this reading [1 January, 2020] means that the potential impact of the escalated contagion from the Novel Coronavirus on sentiment will not be captured this month.”

The ICI measured investor confidence or risk appetite quantitively by analysing the buying and selling patterns of institutional investors.

The index measures chance in investor risk appetite with the greater the percentage allocation to equities, the higher the risk appetite or confidence, with 100 being neutral.

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