Investor confidence climbs in February

A boost in confidence from North American institutional investors has trickled into global institutional investor confidence, which rose 8.7 points to reach 123 in February. 

The State Street Investor Confidence Index (ICI) for February 2014 showed North American ICI shot up 12.3 points to 125.5, up from January’s revised level of 113.2. 

On the other hand risk sentiment in Europe slumped slightly, with its ICI dropping from January’s revised 112.8 to 110.6.  

Balancing this was Asia, where ICI rose 3.3 points to 106.6 from the January figure of 103.3. 

Senior vice president Michael Metcalfe said while weaker US economic data and shaky emerging markets brought about a “dramatic correction” in global markets late January and early February, longer-term investors remained calm. 

“Instead, they used the sell-off in risk assets as a buying opportunity and measured investor sentiment rose in all regions bar Europe.”  

State Street Associates director Paul O’Connell said institutions were adding to their equity holdings despite credit tightening in China, growth rates in the US and policy turmoil in Thailand, Ukraine, Argentina and Turkey. 

“Our data does reveal regional weakness, notably in lack-lustre demand for European ex-UK equities, but overall suggests that institutions are adhering to their strategic plans, albeit with a slight defensive tilt to their sector allocation,” Paul O’Connell said. 

The ICI measures investor confidence or risk appetite quantitatively by analysing actual buying and selling patterns of institutional investors.