Investor confidence sees drastic drop

Yasmine Raso

Senior Journalist

2 December 2022

Investor risk appetite, measured by State Street Global Markets’ Investor Confidence Index (ICI), has fallen for the second consecutive month to 90.4 points in November from October’s reading of 104.4.

One of the lowest readings of 2022, the 14-point overall drop was attributed to declines in the North American ICI to 88.7 and in the Asian ICI to 91.0 which registered a 14.2-point decrease.

At the other end, the European ICI rose 5.4 points to 91.8.

The index slipping below a neutral 100 reading indicates institutional investors are steadily decreasing their long-term exposure and allocations to risky assets.

Marvin Loh, Senior Macro Strategist at State Street Global Markets, highlighted how broader macro trends contributed to the change in investor behaviour and buying and selling patterns.

“Investors risk appetite contracted by its largest margin of the year as the Global ICI fell 14.0 points to 90.4, indicating falling equity allocations and overall market confidence,” he said.

“Growing recessionary concerns in North America contributed to the overall decline, with this regional measurement falling 15 points to 88.7, its lowest reading since the start of the pandemic.

“Asia recorded a comparably sizable 14.2-point decline to 91.0, as China’s continued adherence to its strict zero-COVID policy obfuscated an expected regional rebound.

“Readings from Europe remained below 100, although they did marginally improve with a mild start to winter easing some concerns over the continent’s energy crisis.”