EconoIndicators

Investor Confidence At a Glance
Note: There were large revisions to the June index.

• Global Index: 77.2
• Monthly Change: Down 6.8
• Year-to-year Change: Down 22.4
• North America Index: 85.8
• Monthly Change: Down 8.1
• Europe Index: 77.3
• Monthly Change: Down 3
• Asia Index: 88.9
• Monthly Change: Up 4.6

Technorati Tags: State Street Index, Investor Confidence Index, investor confidence

State Street Index - Chart 2 - August 2008

State Street Index - Chart 1 - August 2008

Investor Confidence Index Declines from 84.0 to 77.2 in August

Boston, August 19, 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 August 2008.
Global Investor Confidence decreased by 6.8 points to 77.2 from a revised July level of 84.0. This month it was North American investors who drove the move, with confidence in that region declining from 85.8 to 77.7. European investors also felt less optimistic, as evidenced by a three-point decline in their confidence from 80.3 to 77.3. Asian investors saw a modest improvement in their risk appetite for the second month, and their benchmark rose from a revised level of 85.3 to 88.9.
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.
“Renewed concerns around credit and the likelihood that growth can be sustained in both Europe and Asia create the fundamental backdrop for this month’s decline in confidence,” commented Froot.
“There appears to have been a cycle of risk appetite declines rippling across the major regions over the last two months,” added O’Connell. “North American investors took a more pessimistic view in June and European investors followed suit. The buoyancy of Asian confidence over the last two months was not sufficient to outweigh this increased pessimism.”

Source: State Street Associates