July 31, 2012
confidence increased slightly in July, according to a report. ---
Street’s Investor Confidence Index (ICI) rose by 0.7 points from June’s reading
of 93.3 to reach 94.0.
among both North American and European investors ticked downwards, while
sentiment among Asian investors was slightly improved. The North American ICI
declined 0.6 points from June’s revised reading of 93.7 to settle at 93.1,
while the European ICI fell 0.5 points from June’s revised reading of 102.2, reaching
101.7. The Asian ICI was up 0.8 points from June’s revised figure of 90.2 to
finish at 91.
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 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.
message being sent by institutional investors this month is one of caution,” said
Froot. “The pickup in equity buying that we noted last month proved
short-lived, and flows had turned negative by the end of our July sample. It
should be noted that the sample ends just before the latest round of policy
pronouncements from European policymakers. As such, it remains to be seen
whether these policy moves will have a meaningful impact on risk appetite.”
State Street Investor Confidence Index was developed by Harvard University
professor Kenneth Froot and Paul O’Connell of State Street Associates. It measures
investor confidence or risk appetite quantitatively by analyzing the buying and selling patterns of institutional investors.