Global investor confidence surges on reopening optimism

Global investor confidence is nearing 100 points, having risen 5.4 points during May, according to State Street Global Markets.

In its May reading, the Global Investor Confidence Index (ICI) was 97.9 points compared to 92.5 during April, driven by improved confidence in North America and Asia.

The firm said this improvement was the largest margin of the year. Looking regionally, North America saw a six-point rise while Asia saw a nine point rise and was now at 100.8.

However, confidence dipped slightly in Europe with investor confidence falling to 93.0.

The index measured investor confidence or risk appetite quantitatively by analysing the actual buying and selling patterns of institutional investors. A reading of 100 is neutral, the level where investors are neither increasing or decreasing their allocations to risky assets.

Marvin Loh, senior macro strategist at State Street Global Markets, said: “Investor risk appetite improved by the largest margin of the year in May, buoyed largely by reopening optimism on the heels of broader vaccination access, particularly in advanced economies.

“Rising yields, which had generated investor concern earlier this year, have been generally stable recently, contributing to positive gains in investor confidence in both North America, as well as Asia, even in spite of ongoing issues with vaccine rollouts in Asian countries. In contrast, European investors saw a slight contraction in confidence this month as gains on the vaccination front were met with slightly higher yields.”