The Global Investor Confidence Index rose 0.4 points from the revised reading of 80.5 in November and settled at 80.9, according to State Street Global Markets.
For North American institutional investors, confidence rebounded from its record low of 72.4 in November, rising 5.4 points to reach 77.8.
Although confidence is “weak,” this is not necessarily a negative outcome in regard to the secondary market.
“Weaker than expected economic numbers are generally positive for agency mortgage-backed securitizations as investors look to scale back risk,” Agency MBS strategist Jeana Curro of the Royal Bank of Scotland Global Banking & Markets [stockRBS”> told HousingWire.
However, North American investors held the most pessimism, both in the closing level and the year change of negative 12.1 of their index.
“As has been true for some months now, global institutional investor confidence remains weak as institutions continue to shy away from equities,” Harvard University’s Professor Kenneth Froot said in a statement.
“In the past year, institutions have bought assets directly linked to a reduction in European tail risks, such as peripheral bonds and European banks. However, there is little evidence that institutions are interested in rebuilding core equity allocations in a broad-brush manner to previous levels.”
With global dividend yield around 2.8%, alongside increased talk of nominal gross domestic product targeting among policymakers, there is a possibility of a turnaround in equity flows in 2013, Paul O’Connell of State Street Associates said in a statement.
The ICI measures investor confidence or risk of appetite quantitatively by analyzing buying and selling patterns of institutional investors.
