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Global investor confidence slips further in October
Global institutional investor confidence slipped further in the past month following an already significant fall in September, according to the latest State Street Investor Confidence Index, which quantifies investor confidence based on their allocation to equities.
Globally, investor confidence fell 1.9 points in October to 86.2 after falling four points in September. Confidence in North America fell 3.2 points to 84.9 after plunging 7.3 in the previous report, while Europe was largely static. Confidence among Asian investors dropped 4.4 points, cancelling out a climb of that amount in September, to remain positive at 103.3.
“Looking at the underlying data, institutions have been allocating away from developed markets and towards emerging markets, but the net of the two flows has been negative,” said index co-developer Ken Froot from Harvard University.
“This continues a pattern established at the beginning of August and would suggest that institutional investors are content to play the role of liquidity provider rather than liquidity taker in the current market environment.”
Index co-developer Paul O’Connell of State Street Associates noted continued reticence on the part of investors to invest in the major economies.
“The euro region did receive some flows during the month, but flows to the US, UK, Japan and Australia were generally anaemic. The most attractive destinations for institutional flows over the month were China and India, reflecting that growth appears more compelling to investors in these regions than in the core developed markets,” he said.
AUTHOR
Mike Taylor
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