Global investor confidence increases in May

Global investor confidence has increased 0.3 points to 73.3, from April’s revised reading of 73, according to State Street’s Investor Confidence Index (ICI).

Europe was the primary driver, which rose 6.3 points to 108.6, while North America and Asia each dropped 0.3 points to 67.8 and 80.5 points, respectively.

Marvin Loh, senior macro strategist at State Street Global Markets, said the shifting focus from country lockdowns to restarting economic activity allowed the ICI to remain mostly unchanged in May.

“The slowing of COVID-19 cases in Europe and the phased restart of its most impacted economies lifted sentiment by six points, recovering most of the losses from the prior few months,” Loh said.

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“Expectations of additional fiscal and/or monetary stimulus from Europe also contributed to the improving tone.

“However, the North America ICI was minimally impacted, as the progression of the virus is still on a path towards peaking, while concerns remain over reinfections as all U.S. states have at least begun to partially reopen.”

The index was developed in partnership with FDO Partners and measured 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.