The global investor confidence index (ICI) inched up during the month of September, reaching 108.7 (up from August’s revised reading of 107.8), said State Street in a press release published on 27 September. As the reading is above 100, this corresponds to a greater percentage allocation to equities and, therefore, higher investor risk appetite. State Street’s index measures the trades--not opinions--of institutional investors.
“Investor confidence was stable in September, with the Global ICI posting a marginal gain on the heels of strong signals that the end of the global central bank tightening cycle was nearing a close,” commented Marvin Loh, senior global macro strategist at State Street Global Markets.
The global investor confidence index has been going up ever since December 2022 (when its reading stood at 76).
Investor confidence down in Europe
Regional signals have been more “mixed” as “as economic divergence influenced overall investor appetite,” noted the firm. The European reading, for instance, has seen more fluctuation over the past several months. The EMEA index dropped from 103.7 to reach 97.5, said State Street. That’s a decline of 6.2 points.
“Deteriorating economic conditions in Europe prompted a pullback in our Europe ICI back below 100 to its lowest reading of the year,” said Loh. The European Central Bank this month published macroeconomic projections, which forecast that real GDP growth will slow from 3.4% in 2022 to 0.7% in 2023.
Investors in North America remained “risk-seeking” thanks to signals from the Fed that a “soft landing” remains its base case, said Loh, while stimulus efforts in China have “brightened” the Asia-Pacific regional investor confidence index, which jumped 11 points this month, reaching 112.6. This is its highest reading since January 2021.
State Street has its global headquarters in Boston and is active in more than 100 geographic markets. It employs around 1,000 people in Luxembourg and roughly 43,000 around the world. As of 30 June 2023, the company has $39.6trn in assets under custody and/or administration and $3.8trn in assets under management.