Global Investor confidence decreases 4.6 points in October to 104.3
State Street Global Markets has released the results of the State Street Investor Confidence Index® (ICI) for October 2022.
The Global Investor Confidence Index decreased to 104.3, down 4.6 points from September’s revised reading of 108.9. The decrease was led by a sharp 14.4 point drop in European ICI to 86.2 as well as a 5.1 point drop North American ICI to 104.0. Asian ICI, meanwhile, rose 4.1 points to 104.5.
The Investor Confidence Index was developed at State Street Associates, State Street Global Markets’ research and advisory services business, in partnership with FDO Partners. It measures investor confidence or risk appetite quantitatively by analysing the actual buying and selling patterns of institutional investors. The index assigns a precise meaning to changes in investor risk appetite: the greater the percentage allocation to equities, the higher risk appetite or confidence. A reading of 100 is neutral; it is the level at which investors are neither increasing nor decreasing their long-term allocations to risky assets. The index differs from survey-based measures in that it is based on the actual trades, as opposed to opinions, of institutional investors.
“Risk appetite contracted in October for the first time in five months as the Global ICI fell 4.6 points to 104.3,” commented Rajeev Bhargava, head of Investor Behavior Research, State Street Associates.
“The move was largely driven by weaker sentiment in Europe and US, with the former falling just over 14 points, likely driven by escalating concerns that the European Central Bank may be well behind in the tightening cycle and therefore bring hikes forward.
“In addition, growing unease around UK fiscal outlook contributed to the volatility across European markets and in turn to the decline in confidence locally.
Interestingly, confidence of Asia investors was more resilient in October as the regional ICI increased over 4 points.”
The index is released globally at 10 a.m. Eastern time in Boston on the last Wednesday of each month.
