J.P. Morgan launches Investment Confidence Index in India
Aug 12, 2009
- J.P. Morgan Asset Management launches India’s first Investment Confidence Index in association with ValueNotes.
Mumbai, 12 August 2009: JPMorgan Asset Management India Pvt. Ltd. (JPMAMIPL) today announced the launch of the first Investment Confidence Index in India in association with ValueNotes. The J.P. Morgan Asset Management – ValueNotes Investment Confidence Index (ICI), which will be published on a quarterly basis, captures the confidence of retail investors, corporate investors and financial advisors on the Indian economic and investment environment. The findings of the inaugural survey show that the Indian financial community currently holds a cautiously optimistic view towards their local market.
ValueNotes, an independent market research company, was commissioned by J.P. Morgan Asset Management to conduct the survey. The ICI was developed by interviewing a random sample of retail investors (with a wallet size in excess of INR 200,000), corporate investors and financial advisors. The survey took place in July 2009 in eight cities across India: Delhi/NCR, Mumbai, Kolkata, Chennai, Ahmedabad, Bengaluru, Hyderabad and Pune.
The key objective of the ICI is to quantify confidence in the investment environment among investors and advisors. The survey also attempts to study investment behaviour and sentiment based on key factors such as the improvement in the Indian and global economic environment, general investment atmosphere, expectation of growth in investment portfolios and others. Going forward, the ICI will map and analyse the short term and long term changes in investment behaviour and outlook every quarter, from an investor and distributor standpoint.
The J.P. Morgan Asset Management – ValueNotes Investment Confidence Index score is derived from responses to the following questions posed to all target segments:
The likelihood of the Indian economic situation improving from current levels in the next six months.
The likelihood of an improvement in the general investment market environment and atmosphere from current levels in the coming six months.
The possibility of the global economic environment improving from current levels in the coming six months.
The likelihood of the BSE Sensex increasing in the next six months.
The prospect of your / your clients’ investment portfolio appreciating in the coming six months.
Expected increase or decrease in the amount of investment and/or increase in mutual fund inflows in the coming six months.
Responses to these 6 questions also form the basis for arriving at the Retail Investor Confidence Index, Corporate Confidence Index and the Advisor Confidence Index which are sub-indices of the Investment Confidence Index. At any given point, the indices can move from ‘0’ to ‘200’, with ‘0’ depicting the most negative outlook; ‘200’ depicting full and absolute confidence and ‘100’ showing a neutral position.
Mr. Krishnamurthy Vijayan, Executive Chairman of J.P. Morgan Asset Management said, “We are extremely proud to present the J.P. Morgan Asset Management – ValueNotes Investment Confidence Index to the Indian investment community. Investment sentiment has always been a key focus in our business strategy across the globe. We have been monitoring retail investor sentiment closely within the major markets of Europe and Asia for some time by conducting investor confidence surveys since the early 1990s. The inaugural investor confidence index was launched in the UK, followed by Germany, France and other European countries. In Asia, a similar Investor Confidence Index has been launched by the firm in markets like Hong Kong, Japan and Taiwan and has been well received.”
Mr. Arun Jethmalani, Managing Director, ValueNotes commented, “The Indian economic prospects drive confidence across the board. A Government with a strong majority was viewed as the most positive economic signal. The Investment Confidence Index at the end of July 2009 stands at 135.9, arrived by taking an average of the Investor Confidence Index (highest at 138.3), Corporate Confidence Index (136.0) and the Advisor Confidence Index (133.5). A deeper study of the indices throws up a recurring theme across all three categories – consistently high levels of optimism on an improvement in the Indian economic situation. This is contrasted by a marked pessimism or significantly lower confidence on a global economic recovery.”
The recent election results have influenced investment confidence favourably, as investors and advisors alike have voted for a government mandated with a strong majority as the single most positive signal for the Indian economy today.
48% of retail investors expect their income will increase and they will make additional investments over the next six months.
Retail investors are more confident about making additional investments (136.4) than their advisors (132.1) expect them to.
Advisors are significantly more optimistic about portfolio appreciation (146.8) than their retail clients (138.2).
Among cities – Retail and IFA confidence in Chennai is the highest at 160.2 and 147.3 respectively. In contrast, retail confidence in Hyderabad is lowest at 98.1 and IFA confidence is the lowest in Kolkata at 125.7.
Retail investor confidence declines as age increases, with the age group 22 to 25 most confident (142.7) and investors aged 55 to 60 the least confident (131.3).
By occupational status, the salaried employees from the private sector have the maximum confidence at 140.8.
Retail investor responses indicate that investments in stocks and mutual funds increase with an increase in wallet size. While 37% of retail investors with wallet size between INR 2 and 5 lakhs invested in stocks and mutual funds over the past 12 months, the figure increased to 79% for investors with wallet size INR 50 lakhs and above.
Both investors and advisors expect Sensex to be at 16,000 – 17,000 levels by December 2009. 76% of retail and 88% of advisors expect Sensex to rise from current (survey) levels.
70% of corporates expect improvement in profits and employment opportunities.
Half the corporates surveyed believe that the Indian rupee is likely to appreciate in the next six months while 76% of respondents expect interest rates to move upwards.
36% of corporate respondents expect RBI to intervene in the medium term to reduce liquidity in 6-12 months while 44% believe that the NPAs can be expected to increase.
- ends -
For further information please contact:
Pradeep Rajasekharan, Head of Marketing & Communications
J.P. Morgan Asset Management
Telephone: (91 22) 6783 7202 / (91) 99676 66602
Issued by: JPMorgan Asset Management India Private Limited
Notes to Editors
About J.P. Morgan Asset Management
J.P. Morgan Asset Management is the brand name of J.P. Morgan Chase & Co’s asset management companies. J.P. Morgan Asset Management is a global asset management leader providing world-class investment solutions to clients. With US$1.1 trillion in assets under management (the Asset Management client funds of J.P. Morgan Chase & Co. as at 30 June 2009) and offices in 40 locations around the world, J.P. Morgan Asset Management offers global coverage with a strong local market presence, and leadership positions in most asset classes.
Commitment to India: JPMorgan Asset Management India Private Limited is the Indian arm of J.P. Morgan Asset Management. It commenced its mutual fund business in India in April 2007, initially establishing its head office in Mumbai and subsequently opening satellite offices in Delhi, Kolkata, Chennai, Ahmedabad, Pune and Bengaluru. The firm distributes its funds through a network of banks, independent financial advisers and national distributors and currently has caters to investors in 141 cities across the country.
The firm is still in its infancy but has a very clear agenda of bringing the inherent strengths of J.P. Morgan Asset Management into the country, namely:
Excellence and continuity in investment management
A comprehensive and competitive range of products
Strong systems and processes
Exceptional risk management and controls
J.P. Morgan Asset Management manages assets on behalf of a broad range of retail and institutional investors in India. It continues to expand its product range to meet the needs of its diverse client base, using the resources and expertise available from its global network.
ValueNotes is an integrated provider of business intelligence, information, research products and services. It operates at multiple points of the knowledge value chain to provide information, research, analytics, knowledge management and intelligence to a wide variety of users, and via multiple delivery mechanisms. ValueNotes’ customers include some of the leading global corporations, asset and wealth managers, management consulting firms, research publishers, PE and VC firms. The company operates across multiple domains, but primarily BFSI, IT / BPO, Pharmaceuticals / Healthcare and Internet / Media.
ValueNotes products and services are made available by different Business Units.
Custom Research: Provides a wide range of bespoke services in the areas of business and financial research & analysis. Assessing market opportunities, quantifying customer / brand / investor perception, facilitating entry into Indian markets, enabling competitive intelligence, providing dedicated research support teams and providing research-enabled written content are among the key services provided.
ValueNotes.com: Is a search engine and financial portal that aggregates research, news, information and independent third-party articles/analyses, primarily about Indian financial and equity markets.
Outsourcing Practice: Publishes proprietary Market Intelligence on the Outsourcing Industry. The current scope covers primarily BPO and KPO services, with an emphasis on knowledge services or KPO.
Statutory details: Sponsor: JPMorgan Asset Management (Asia) Inc. Trustee: JPMorgan Mutual Fund India Private Limited, a company incorporated under the Companies Act, 1956. Asset Management Company: JPMorgan Asset Management India Private Limited, a company incorporated under the Companies Act, 1956. JPMorgan Mutual Fund has been established as a Trust under the Indian Trusts Act, 1882, by JPMorgan Asset Management (Asia) Inc., liability restricted to initial contribution of Rs.1 lakh.
Risk Factors / Disclaimers: Mutual fund investments are subject to market risks. Please read the Offer Document, Statement of Additional Information and Scheme Information Document carefully before investing.
The information contained herein is provided based on a public survey. Although we endeavour to ensure that the information is as current and accurate as possible, errors do occasionally occur. Therefore, we cannot guarantee the accuracy and adequacy of the information. Readers should, wherever possible, verify the information before acting on it.
This information is based on our assumptions and interpretations of the survey conducted. No part of our compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed herein. Be aware that our assumptions and interpretations are partially based on our observation of participants’ past behaviour. Do not base your actions on the material so provided. These observations will change if different assumptions and interpretations are applied for the purpose of preparing this survey report.