Global investor confidence declines 4 points in March

Global investor confidence has decreased by four points in March to 74.5 due to COVID-19, according to State Street’s Investor Confidence Index (ICI).

North America fell 2.9 points to 67.8 and Europe fell by 15 points to 95.6; however, Asia rose 8.7 points to 94.5.

Lee Ferridge, State Street Global Markets head of multi-asset strategy, said concerns over COVID-19 had shifted from China to Europe and the ICI had reflected this.

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“Rapidly growing case numbers in Europe pushed sentiment down by a marked 15 points, back below the neutral line of 100 for the first time since August,” Ferridge said.

North American sentiment declined from an already low level, hovering near all-time lows as investors wait to see the breadth of fiscal and monetary response.

“In contrast, however, as the number of active cases in China declined, investor sentiment in Asia actually rebounded in March by 8.7 points, largely reversing February’s decline.”

The index was developed to measure investor confidence or risk appetite quantitatively by analysing the buying and selling patterns of institutional investors.

The greater the percentage allocation to equities, the higher risk appetite or confidence; a score of 100 was neutral.

It differed from survey-based measures as it was based on actual trades, not opinions of institutional investors.

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