BOSTON (dpa-AFX) – Investor confidence fell again in December, according to a study. Global investor confidence as determined by State Street Bank – illustrated by the Investor Confidence Index (ICI) – fell 1.3 points from November to 79.7 points. In November, investors were even more confident.
According to State Street, the recent sluggishness is due to declining investor confidence in Europe, while investors in North America and Asia are more confident. The investor confidence index for North America, as determined by State Street, is 71.6 points, but still well below 89.9 points for Asia. The European ICI now stands at 109.4 points.
“Investor sentiment in North America continues to lag behind that in Europe and Asia. Optimism over a viable US-China trade deal appears to have heightened consumer appetites. Asian investors, although it is still below the 100 neutral mark. ”said Rajeev Bhargava, head of investor behavior research at State Street Associates.“ Interestingly, however, the recovery did not materialize spilled over into Europe, where investor confidence fell sharply this month, possibly due to the interplay between weaker economic data and lingering uncertainty over a hard Brexit in the region. “
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.