Institutional investor sentiment improves

Asian institutional investors remained amongst the most pessimistic in April, according to the latest State Street Investor Confidence Index.

The index, released this week, revealed that while European and North American institutional investors were broadly more confident during the month, this was not shared by their counterparts in Asia.

It showed that the global index rose to 99.5, up 2.6 points from March’s revised reading of 96.9 with confidence among the North American investors improving 4.6 points to 98.3, while that amongst Europeans increased from 94.8 per cent to 96.1 per cent.

However the Asian index declined by 5.1 points from 109.8 to 104.7.

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Commenting on the index, State Street Associates’ Kenneth Froot said April had seen some improvement in North America and Europe despite looming geopolitical tensions and policy uncertainty in the US and abroad.

“Our measure of the global investor confidence has been on the uptick for two consecutive months and resonated with the improving global growth outlook and expectations of higher inflation,” he said.

However, he noted that it was still shy of the 100 level mark, indicating that investors' risk appetite appeared to be on hold as they awaited details of a new US tax plan and a possible resurrection of the health care reform act.

State Street Global Markets head of global macro strategy, Michael Metcalfe noted that the April index was calculated before France went to the polls.

“…but it is telling that European investor confidence was still edging higher even then to mark the second consecutive monthly gain,” he said. “It is suggestive that concerns at the start of the year about European political risk, along with weak growth, may have been overplayed.”