The Global ICI rose 5.4 percentage points in January to 86.8, with North American and Asian institutions registered increased optimism. The North American index rose 7.8 percentage points to 86.3 and the Asian index increased to 91.0. The European ICI, however, fell from 94.1 to 89.6.
The ICI measures investor confidence or risk appetite by analysing the actual buying and selling patterns of institutional investors. The greater an investor’s percentage allocation to equities, the higher the risk appetite and confidence.
Kenneth Froot, the developer of the index said: “2013 has opened with something of a turnaround in demand for global equities by institutional investors. This comes on the heels of a two-and-a-half year period of de-risking by these institutions.”
Despite the overall decline in European risk appetite, some individual economies have registered increased confidence. The ZEW Sentiment Index showed that investor confidence in Germany had increased significantly in January. The Index, prepared by independent think tank ZEW, showed a 24.6 percentage point increase in January, reaching its highest level since before the financial crisis.
The Index also showed that investor sentiment in Switzerland had improved for the fourth consecutive month, rising by 8.6 percentage points between December and January.
