State Street Investor Confidence Index Rises to 91.0 in JuneState Street Investor Confidence Index: June 2006
June 20 2006 - 10:00AM
Business Wire
State Street Global Markets, the investment research and trading
arm of State Street Corporation (NYSE:STT), released today the
results of the State Street Investor Confidence Index(R) for June
2006. According to the June index, investor confidence increased by
4.7 points to 91.0 from May's revised reading of 86.3. Looking
regionally, the confidence of North American institutional
investors displayed a solid increase from 99.0 to 108.0. The
confidence of Asian investors improved from 78.7 to 81.8, and the
confidence of European investors fell to 87.2 from 93.9. Developed
through State Street Global Markets' research partnership, State
Street Associates, by Harvard University professor Ken Froot and
State Street Associates Director Paul O'Connell, the State Street
Investor Confidence Index(R) measures investor confidence on a
quantitative basis, analyzing actual buying and selling patterns of
institutional investors. The index is based on financial theory
that assigns precise meaning to changes in investor risk sentiment,
or the willingness of investors to hold proportionally more or less
of their portfolio in equities. The more of their portfolio that
institutional investors are willing to devote to equities, the
greater their risk appetite or confidence. "When it comes to
investor sentiment, things are so bad they are good," commented
Froot. "Institutional investors do not fully share the rising
concerns surrounding tighter central bank liquidity reflected by
the market as a whole. There is no question that in the early
spring the market underestimated the degree to which inflation
pressure would continue to build. However, the fall in prices and
the recognition that relatively minor additional increases are
needed, has brought professional investors back as buyers. "This
countercyclical theme has been particularly strong in North
America, where confidence has steadily risen from 83.3 in February
to 108.0 today," commented O'Connell. "Interestingly, European
confidence continues to weaken, suggesting that the price
adjustment in the U.S. has been a major attractor. Our data gives
solid footing to recent surveys suggesting that stock prices are
highly likely to rise through the end of the year." Since its
launch in September of 2003, the State Street Investor Confidence
Index(R) has become a key economic indicator for asset owners,
investment managers and central banks. As the only index providing
a quantitative measure tracking the common buying patterns of
institutional investors around the world, the State Street Investor
Confidence Index(R) offers a unique look into the investment
behavior and decisions of thousands of professional investors and
their investment decisions. About State Street Global Markets:
State Street Global Markets provides specialized investment
research and trading in foreign exchange, equities, fixed income
and derivatives. Its goal is to enhance and preserve portfolio
values for asset managers and asset owners. From its unique
position at the crossroads of the global markets, it creates and
unlocks value for its clients with original flow-based research,
innovative portfolio strategies, trade process optimization, and
global connectivity across multiple asset classes and markets.
State Street Global Markets' research team of leading academic and
industry experts is committed to continually advancing the science,
including theory and application of its proprietary investor
behavior research and innovative portfolio & risk management
technologies to help its clients challenge conventional thinking,
shape ideas, make more informed investment decisions and deliver
measurable results. About the State Street Investor Confidence
Index(R): The index is released globally at 10 a.m. Eastern time in
Boston on the second to last Tuesday of each month. More
information on the State Street Investor Confidence Index,
including frequently asked questions and a calendar of release
dates, is available at
http://www.statestreet.com/investorconfidenceindex. The previous
month's calculations for the index are revised to account for
trading activity through the end of the reporting period. About
State Street: State Street Corporation (NYSE: STT) is the world's
leading specialist in providing institutional investors with
investment servicing, investment management and investment research
and trading services. With $10.7 trillion in assets under custody
and $1.5 trillion in assets under management (as of March 31,
2006), State Street operates in 26 countries and more than 100
geographic markets worldwide. For more information, visit State
Street's web site at www.statestreet.com. This news announcement
contains forward-looking statements as defined by United States
securities laws, including statements about the financial outlook
and business environment. Those statements are based on current
expectations and involve a number of risks and uncertainties,
including those related to the pace at which State Street adds new
clients or at which existing clients use additional services, the
value of global and regional financial markets, the pace of
cross-border investment activity, changes in interest rates, the
pace of worldwide economic growth and rates of inflation, the
extent of volatility in currency markets, consolidations among
clients and competitors, State Street's business mix, the dynamics
of markets State Street serves, and State Street's success at
integrating and converting acquisitions into its business. Other
important factors that could cause actual results to differ
materially from those indicated by any forward-looking statements
are set forth in State Street's 2005 annual report and subsequent
SEC filings. State Street encourages investors to read the
corporation's annual report, particularly the section on factors
that may affect financial results, and its subsequent SEC filings
for additional information with respect to any forward-looking
statements and prior to making any investment decision. The
forward-looking statements contained in this press release speak
only as of the date hereof, June 20, 2006, and the company will not
undertake efforts to revise those forward-looking statements to
reflect events after this date.
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