Asian investors are becoming significantly more pessimistic

BOSTON (dpa-AFX) – Given the spread of the corona virus, the mood of Asian stock investors deteriorated significantly in February, according to a survey. The region’s Investor Confidence Index (ICI), calculated monthly by financial services provider State Street, fell from 95.5 to 83.6 points. The service provider said on Thursday that the drop was likely due to the deteriorating economic outlook from China.

In North America and Europe, by contrast, State Street said investors had become more confident again. The global investor confidence index rose 2.5 points to 77.9 points.

“While this month’s ICI index only covers investor activity through February 19, the impact of Covid-19 on institutions’ risk appetite appears limited for now,” Rajeev wrote Bhargava, Head of Investor Behavior Research. State Street Associates. “At the moment, the spread to Europe and the United States appears to be largely limited, with the willingness to take risks for Europe above the neutral line further increasing, possibly due to the greater clarity that prevailed after Brexit. “

With new cases of Covid-19 now reported outside of China, Bhargava said it will be crucial whether investor concerns will also be felt globally in the coming months. Since the start of this week, concerns about the spread of the coronavirus have hit stock markets in the United States and Europe hard.

The Investor Confidence Index quantitatively measures investor confidence or risk tolerance by examining the actual buying and selling behavior of institutional investors. The index assigns precise meaning to changes in investors’ risk appetite: the higher the percentage allocation between individual securities, the greater the risk appetite or confidence. A value of 100 is neutral; it is the level at which investors do not increase or decrease their long-term exposure to high-risk assets.

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