Investor confidence rose 9.3 points from October’s revised reading of 88.2 to 97.5 in November, according to the State Street Investor Confidence Index.
In North America, confidence rose a robust 12.2 points to 97.1 from October’s level of 84.9.
Investor confidence was also buoyant among European investors, with the index rising 15.9 points to 112.2 from October’s revised level of 96.3.
In Asia, by contrast, institutional investors were more restrained, and confidence in that region declined by 8.0 points from a revised October level of 103.2 to 95.2 in November. The November results include an updated weighting within the Asian index to better reflect the relative importance of institutional investors across the various markets in that region. Without the revision, the decline in Asia would have been slightly larger, at 9.1 points.
Developed by Harvard University professor Kenneth Froot and Paul O’Connell of State Street Associates, the State Street Investor Confidence Index measures investor confidence on a quantitative basis by analysing the actual buying and selling patterns of institutional investors.
“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,” says Froot. “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.”
“Looking at the underlying data, we continue to see an appetite for emerging markets and growth economies, at the expense of the developed world,” adds O’Connell. “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.”
