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Investor confidence surges back in November
A three-month slide in global investor confidence was reversed in November as institutional investors returned to equities, according to the State Street Global Markets Investor Confidence Index, which quantifies investor confidence based on their allocation to equities.
Globally, investor confidence rose 9.3 points from the October level of 88.2 to 97.5, the highest it has been since April and higher than the 96.5 at the end of July, prior to the index slipping for three successive months.
The increase came on the back of a 12.2 point rise in North America, from 84.9 to 12.2, while a 15.9 point rise in Europe saw levels there climb to 112.2.
Institutional investors in Asia actually bucked the trend, with confidence dropping 8 points to 95.2.
The decrease in Asia would have been slightly larger but for an update of the weighting within the Asian Index to better reflect the relative importance of institutional investors across the various markets in that region, according to State Street.
"Having remained at somewhat lacklustre levels since April of this year, institutional investor confidence recovered to some degree this month, with North American and European institutions leading the way," said index co-developer professor Kenneth Froot of Harvard University.
"Confidence in North America remains below the neutral level of 100, but overall the numbers are indicative of an improved attitude to risk as valuations have declined from the early November highs."
Paul O'Connell of State Street Associates noted there was an appetite for emerging markets and growth economies at the expense of the developed world.
"The confidence reading for Europe is indicative. Sovereign debt concerns have roiled domestic markets within the region and institutional investors domiciled in Europe have shown a renewed interest in deploying risk globally, despite the uncertainties at home," O'Connell said.
AUTHOR
Mike Taylor
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