Global investor confidence sees sharpest fall since 2009 financial crisis

Investors look at computer screens showing stock information at a brokerage house in Shanghai.
Investors look at computer screens showing stock information at a brokerage house in Shanghai.PHOTO: REUTERS

SINGAPORE - Investor confidence has fallen across the globe this month.

State Street Global Exchange's latest Investor Confidence Index (ICI) figures show the worldwide score falling from 127.1 last month to 114.6 now. This is the largest month-on-month downward slide since the height of the global financial crisis in 2009.

Said Ms Jessica Donohue, State Street Global Exchange executive vice-president and chief innovation officer: "The rollercoaster ride across China's equity markets and the absence of a definitive Greek bail-out agreement has certainly weighed heavily on risk appetite."

The index differs from survey-based measures in that it is based on the actual trades, as opposed to opinions, of institutional investors. It measures investor confidence or risk appetite by analyzing the actual buying and selling patterns of these big investors.

Investor confidence is lowest in Asia, where a slight uplift of 2.6 points still puts the ICI figure at 89.5, below the neutral 100 mark that divides positive from negative sentiment. 100 is the level at which investors are neither increasing nor decreasing their long-term allocations to risky assets.

The crash in confidence is most pronounced in North America, where the ICI score dropped by 20.6 points to 122.6. ICI inventor Kenneth Froot attributed this to a weaker earnings season and an increase in global uncertainty.

Investor confidence has also dipped in Europe, with the ICI going from 102.5 to 100.4.