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Bleak mood persists among European retail investors, according to UBS Index

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Optimism among individual investors across Europe was relatively unchanged in January from last month's record low, according to the Index of Investor OptimismĀ® - EU 5, a joint effort of UBS and the Gallup Organization. This month, the outlook for the European economy improved modestly, despite investors' increasing concerns about prospects for their personal financial situation.

The overall Index of Investor Optimism - EU 5 increased 1 point to -37 in January, up from -38 in December, the lowest measure since the Index - EU 5 baseline survey was conducted in October 2001 (Table 1). While the overall Index held steady this month, there were significant moves in both the economic and personal financial components (Table 2).

Investors' outlook for their personal financial situation continued to deteriorate this month, with nearly half of those surveyed (49 percent) saying they are pessimistic about their ability to achieve investment targets over the next twelve months, up from 46 percent in December. Moreover, fewer investors, 53 percent, say they are optimistic about achieving their investment targets over the coming five years, down from 56 percent last month and 65 percent a year ago.

When asked about the prospects for European stock markets over the next decade, 12 percent of investors believe stagnation is very or extremely likely, unchanged from October 2001, when investors were last polled on the subject. One third of investors, 33 percent, say stagnation is somewhat likely (down from 36 percent), and 48 percent believe it is not too likely or not likely at all (47 percent in October).

London, January 27, 2003