Global investor confidence in holding risky assets grows

PUBLISHED : Thursday, 23 October, 2003, 12:00am
UPDATED : Thursday, 23 October, 2003, 12:00am

Global investors have become more confident about holding risky assets during the past month, according to a new Investor Confidence Index launched by State Street Corp in the United States on Tuesday.

The index, which measures investor sentiment and risk appetite, rose to 104.2 for this month from a revised 102.5 for last month. Apart from a slight setback in recent months after a record reading of 105.4 in July, the index has been on an upward trend for most of this year, climbing from 87.2 in December last year.

Last month, investor confidence was originally estimated at 103.4, according to backdated figures given by State Street, a provider of investment and trading services for institutional global investors.

The index showed that institutional investors were upbeat, even though consumer confidence remained flat this year, the firm said.

'Yields on bonds have risen, but not by enough to dissuade investors from buying additional risky assets,' said Paul O'Connell of State Street Associates, who developed the index with Harvard University professor Ken Froot.

The index is based on actual and changing levels of risk in investment portfolios comprising about 15 per cent of the world's tradable securities.