Investor Confidence Index Declines from 73.1 to 70.7 in SeptemberInvestor Confidence Index Declines from 73.1 to 70.7 in Septemb
September 23 2008 - 10:00AM
Business Wire
State Street Global Markets, the investment research and trading
arm of State Street Corporation (NYSE:STT), today released the
results of the State Street Investor Confidence Index� for
September 2008. Global Investor Confidence decreased by 2.4 points
to 70.7 from a revised August level of 73.1. Confidence among North
American investors remained subdued at a level of 76.1, up just 0.9
from August�s revised level. Asian investors, too, felt pessimistic
and their confidence fell 2.5 points from a revised level of 88.3
to 85.8. By contrast, European investors were somewhat more
optimistic, and their confidence rose 5.4 points to 81.8 from a
revised August level of 76.4 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 measures
investor confidence on a quantitative basis by analyzing the actual
buying and selling patterns of institutional investors. The index
is based on financial theory that assigns precise meaning to
changes in investor risk appetite, or the willingness of investors
to allocate their portfolios to equities. The more of their
portfolio that institutional investors are willing to devote to
equities, the greater their risk appetite or confidence. �This
month�s reading of Global Investor Confidence is the third lowest
we have recorded since the inception of the Index over ten years
ago,� commented Froot. �This is perhaps unsurprising, given the
market turmoil that we have experienced. In examining the
underlying data, we have discovered that, alongside the diminution
in risk appetite, there is a pronounced increase in the
heterogeneity of investor positions. In deleveraging, institutional
investors have sought to exit some of the more `crowded� trades in
the marketplace.� �Despite registering a small increase, the
confidence of North American investors remains in the lower 10th
percentile that we have observed over the four years that the index
has been calculated� added O�Connell. �Only in Europe did we
observe increased appetite for risk-taking, albeit off very low
levels. These readings were calculated before the latest plans to
address the balance sheet concerns with major US financial
intermediaries were mooted. It remains to be seen whether these
plans will lead to an improvement in confidence over the comings
days and weeks.� 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�: 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 provider of financial services to institutional investors,
including investment servicing, investment management and
investment research and trading. With $15.3 trillion in assets
under custody and $1.9 trillion in assets under management at June
30, 2008, State Street operates in 26 countries and more than 100
geographic markets worldwide and employs 28,700 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 2007
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, September 23, 2008, and
the company will not undertake efforts to revise those
forward-looking statements to reflect events after this date.
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