Tuesday, January 26, 2010

State Street Investor Confidence Index - released 10:00 am

Full report here

Investor Confidence Index rises from 104.3 to 104.5 in January


Boston, January 26, 2010 – State Street Global Markets, the investment research and trading arm of State Street Corporation (NYSE:STT), today released the results of the State Street Investor Confidence Index® for January 2010.

Globally, Investor Confidence rose fractionally by 0.2 points to 104.5 from a revised December level of 104.3. The mood was upbeat in North America, where confidence showed an increase of 4.4 points over December’s reading of 103.5 to settle at 107.9. In Europe, by contrast, institutional investors were more wary, and their confidence fell 5.6 points to 98.9 from the December level of 104.5. Amongst Asian institutional investors, confidence rose slightly to 98.1 from a level of 97.5 in December.

Developed through State Street Global Markets’ research partnership, State Street Associates, by Harvard University professor Ken Froot and State Street Associates Paul O’Connell, the State Street Investor Confidence Index measures investor confidence on a quantitative basis by analyzing the actual buying and selling patterns of institutional investors. It is not a survey, but rather fact-based. The index is based on a financial theory that assigns precise meaning to changes in investor risk appetite. The more of their portfolio that institutional investors are willing to devote to equities, the greater their risk appetite or confidence.

“Institutional investors had a number of competing claims on their attention this month,” commented Froot. “Impressive growth numbers out of China for 2009 buttress anecdotal evidence that expansion continues apace there, lending a positive tone to a number of asset classes. At the same time, there is some evidence that while activity has picked up to a substantial degree in the developed markets, the recent pace of improvement may be difficult to sustain, all the more so against a backdrop of uncertainty around monetary policy and regulatory change more generally.”

“The divergence between North American and European confidence this month reflects some of the underlying fundamentals,” added O’Connell. “While there have been some mildly positive data surprises in Europe, there is continued concern about the way forward in addressing the fiscal difficulties of a number of the periphery economies, and this has dulled investor enthusiasm. The improvement in Asian sentiment brings the Index for that region back its September 2008 level.”

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