Investor confidence up in May

Oksana Patron

2 June 2023

Stronger than expected global growth since the start of the year has helped rebuild investor confidence, which saw the Global Investor Confidence Index increase 6.3 points in May to 89.8.

The increase in investor confidence was led by a 9.6 point rise in the North American ICI to 85.1 as well as an 11.8 point rise in the Asian ICI to 101.1. Meanwhile, the European ICI fell for the second straight month, down 11.3 points to 99.8.

“Generally stronger than expected global growth since the start of the year resulted in a slightly less defensive tone amongst institutional investors as the global ICI reading rose to 89.8 in May,” Marvin Loh, senior global Macro Strategist at State Street Global Markets, said.

“Further stability in the U.S. banking sector contributed to a rebound in the North America ICI to 85.1, its highest reading in six months, although it remains the weakest regional reading.

“In contrast, the Europe ICI reversed recent gains falling back below the neutral 100 line to 99.8, its lowest reading in six months, as its largest economy fell into a recession and inflation is expected to result in more tightening from the ECB. Asia subsequently posted the strongest confidence figure, rising to 101.1 as we near the end of the global tightening cycle.”

The Investor Confidence Index was developed at State Street Associates, State Street Global Markets research and advisory services business, and it measures investor confidence or risk appetite quantitatively by analysing the actual buying and selling patterns of institutional investors, with a reading of 100 being neutral and meaning the level at which investors are neither increasing nor decreasing their long-term allocations to risky assets.