31/10/2013
Global investor confidence index loses 5.6 points in October
The State Street Investor Confidence Index released by State Street Global Exchange fell to 95.7 in October, down 5.6 points from September’s revised reading of 101.3.The decline was driven by sentiment in North America, which fell substantially by 17.8 points, pushing the North American ICI well into pessimistic territory at 86.5.By contrast, confidence improved substantially among European institutional investors, reflected in a 10.2 point increase in the European ICI to 111.9. Asian investors stayed their course, and as a result the Asian ICI saw only a modest change, rising 0.9 points to finish at 96.2.“The fiscal showdown in the US clearly took the wind from the sails of institutional investors, pushing the Global ICI into negative territory for the first time since May of this year,” commented Paul O’Connell, who contributed to the development of the index. “Notwithstanding the 11th hour resolution of the immediate crisis, investors are aware that the long-term fiscal policy of the US remains to be negotiated, and that the impact of such negotiations on growth and confidence is yet to be seen.”“The fact that the North American ICI posted a record fall in the same month that the European ICI posted its largest gain in almost three years tells you all you need to know about how policy perceptions are changing between the two areas,” added Michael Metcalfe, head of cross strategy research at State Street Global Markets. “With European confidence at its highest level since July 2007, investors hope that the worst of the Eurozone crisis is past. The US crisis of confidence, in contrast, may just be the beginning, unless policy uncertainty is reduced.”
