GLOBAL - North American institutional investors were responsible for the tumble in global investor confidence in September, according to State Street Global Markets.
The results of the investor confidence index for September 2007 found that confidence fell by 7.5 points to a level of 92.1, with North American institutional investors responsible for a large portion of this shift, as their confidence declined from 117.1 to 106.0.
State Street said that European investors also played a role, as confidence in that region fell from 86.6 to 82.3. However, the confidence of Asian institutions showed a small increase, rising by 1.6 points to 86.5.
Ken Froot, professor at Harvard University, said: “The behaviour of institutional investors this past month reflected a return to more normal liquidity conditions. In the latter part of July and the early part of August, institutions accumulated equities globally as their risk appetite became relatively strong compared with other market participants who were selling aggressively.
“This accumulation by institutions proved worthwhile, as markets rallied steadily from August 16 onwards. In September, institutions were more selective in their purchases, and this is reflected in the latest confidence reading,” said Froot.
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