Investor Confidence At a Glance
- Global Index: 81.4
- Monthly Change: Up 0.5
- Year-to-year Change: Down 16.3
- North America Index: 85.2
- Monthly Change: Up 1.7
- Europe Index: 81.6
- Monthly Change: Up 8.2
- Asia Index: 79.4
- Monthly Change: Down 5.8
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Investor Confidence Index Rises from 80.9 to 81.4 in June
6/17/2008
Boston, June 17, 2008 – State Street Global Markets, the investment research and trading arm of State Street Corporation (NYSE:STT), today released the results of the State Street Investor Confidence Index® for June 2008.
Global Investor Confidence rose by 0.5 points to 81.4 from a revised May level of 80.9. Looking regionally, the confidence of North American institutional investors increased slightly from 83.5 to 85.2. European investor confidence rose more significantly from 73.4 to 81.6. The confidence of Asian investors fell by 5.8 points to 79.4.
Developed through State Street Global Markets’ research partnership, State Street Associates, by Harvard University professor Ken Froot and State Street Associates Director Paul O’Connell, the State Street Investor Confidence Indexmeasures investor confidence on a quantitative basis by analyzing the actual buying and selling patterns of institutional investors. The index is based on financial theory that assigns precise meaning to changes in investor risk appetite, or the willingness of investors to allocate their portfolios to equities. The more of their portfolio that institutional investors are willing to devote to equities, the greater their risk appetite or confidence.
“While not quite as big as the bounce seen after August 2007, this month’s increase is important,” commented Froot. “In spite of the distinct sources of risk that we see – energy prices, inflation in the US and other developed countries, rapidly weakening real estate markets, and global real economic slowdown, institutional investors overall are cautiously finding value at current price levels. While sentiment, particularly in the US remains low, it is now well above the all-time low points the index has witnessed in the last year.”
“European confidence is stronger this month, perhaps reflecting that the ECB is likely to take a more pragmatic role in responding to the elevated levels of inflation that plague Europe, ” added O’Connell. “The situation in Asia, however, is quite a bit more pessimistic. For the first time since the scare of early 2006, Asian investors are processing the choice between more currency adjustment or greater inflation over the coming year. Neither is going to be easy — it’s a timely and sobering reckoning that is taking place.”
Source: State Street Associates
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