Investor confidence at record low - State Street
Author: Kirk
Discussion: Kirk's Market Thoughts: 3000 +
Date: January 24, 2006 5:31 PM
Subject: State Street Investor confidence at record low!!
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Woo Hooo!!!!
Yipeeee!!!!!
To Da Moon!!!!
Investor confidence at record low - State Street
Tue Jan 24, 2006 10:00 AM ET
By Jeremy Gaunt, European Investment Correspondent
LONDON, Jan 24 (Reuters) - North American institutional investors dumped risk from their portfolios in January, sending global investor confidence to a record low, U.S. financial services firm State Street said on Tuesday.
In a report that seemingly underlines much of the weakness on equity markets recently, the firm said its State Street Investor Confidence Index, based on fund flows among clients, fell to 76.0 from 83.8 in December, revised down from 84.7.
It was the lowest figure since State Street began compiling its index in September 1998.
The global figure, however, masked sharp regional differences. Asian and European investors took on more risk, according to the regional indexes, but North Americans executed a sharp about-face.
State Street said the North American index -- which tracks what institutional investors there do globally, not just at home -- dived to a record low of 88.0 from 102.1 in December, revised up from 101.6.
"There is no shortage of concerns plaguing investors in North America," said Harvinder Kalirai, a strategist with State Street Global Markets.
"The U.S. yield curve is on the verge of inverting, which is a red flag for economic growth; the housing market is cooling, which removes a key support for consumer spending; energy prices are back near record highs, which weigh on discretionary spending; and there will be a change at the helm of the (Federal Reserve), which raises uncertainty."
The European index rose to 76.0 from 61.0, revised down from 63.8. The Asian index rose to 80.4 from 75.7 in December, revised down from 76.7.
RISK AVERSE
The State Street findings appear to contradict last week's Merrill Lynch survey of fund managers, which indicated that risk appetite was at the highest level seen by the investment bank's poll takers.
Some of this may reflect a high participation of European investors in the Merrill survey. But that poll also showed fund managers were less optimistic about the future for global growth than their current portfolio stances would suggest.
Those stances come after a long run up of equity prices.
State Street's findings tend to reflect what has been happening on financial markets over the shorter term.
Over the past two weeks, most major stock indexes have fallen, with Japan's Nikkei <.N225> down nearly 3 percent over the period, U.S. indexes losing as much as 2.6 percent and Europe down around 1.5 percent.
State Street's indexes are based on the actual buying and selling patterns of thousands of institutional investors whose $9.8 trillion in assets State Street administers as custodian.
It also has $1.4 trillion in assets under management.
today.reuters.com. |
