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JPMorgan Asset Management - ValueNotes Investment Confidence Index Wave - VI, December 2010

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  • 1. J.P. Morgan Asset Management – ValueNotesInvestment Confidence Index – Wave VI, December 2010 …India‟s only Investor and Advisor focused sentiment indicator J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 2. J.P. Morgan Asset Management Standard Template 2009.ppt J.P. Morgan Asset Management – ValueNotes Investment Confidence Index  Background  Introduction to the indices  Survey methodology  Respondent profile  Investor and advisor confidence – Key findings  Investment activity – Retail investors and corporate treasuries  Other sentiment influencers 1 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 3. J.P. Morgan Asset Management Standard Template 2009.ppt Background  The inaugural Investor Confidence Index was launched in the UK in the early 1990s  Subsequently launched in Germany, France and other European countries  In Asia, similar Investor Confidence Indices launched by the firm in Hong Kong, Japan and Taiwan  The Hong Kong Investor Confidence Index has just completed its 17th wave (3Q 2010) and continues to evoke much interest  The J.P. Morgan Asset Management – ValueNotes Investment Confidence Index (ICI) was launched in India in July 2009 2 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 4. J.P. Morgan Asset Management Standard Template 2009.ppt J.P. Morgan Asset Management – ValueNotes Investment Confidence Index  The definitive indicator of investment confidence levels across key investment centers  Focused on three important investor segments: retail investors, corporates and the advisor community (distributors)  Key objectives – To quantify confidence in the investment environment – To study investment behavior and sentiment over time based on key factors – To evaluate trends in such behavior – To study short-term and long-term changes in investment outlook 3 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 5. J.P. Morgan Asset Management Standard Template 2009.ppt Quarterly indices tracking sentiment across the investment community  Investment Confidence Index: A composite index reflecting the combined sentiment of retail investors, corporates and distributors  Retail Investor Confidence Index: Based on a survey of retail investors across India  Corporate Investor Confidence Index: Based on a survey of corporate treasuries across India  Advisor Confidence Index: Based on a survey of distributors of financial products – Banks, National/Regional Distributors (N/RDs) and Independent Financial Advisors (IFAs) 4 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 6. J.P. Morgan Asset Management Standard Template 2009.ppt Survey Methodology: face to face, online and telephonic interviews  Screener questions capture respondent profile  Six „index‟ questions - capture respondents‟ confidence, over the next six Delhi months 1) Improvement in the Indian economic situation Ahmedabad Kolkata 2) Improvement in the general Investment market environment and atmosphere 3) Improvement in the global economic situation Mumbai Pune 4) Increase in the BSE Sensex Hyderabad 5) Appreciation in personal/clients‟ investment portfolio Bengaluru Chennai 6) Increase in personal/clients‟ investments  Other sentiment drivers 5 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 7. J.P. Morgan Asset Management Standard Template 2009.ppt Index Construction Methodology Indices constructed in a similar manner from the six “Index” questions posed to all  Each Index question assigned a point between 0 and 200 Extremely Unlikely Somewhat Unlikely More or Less the Same as Current Somewhat Likely Extremely Likely 0 50 100 150 200  All six Index questions carry equal weight  Investment Confidence Index equally weights retail, corporate and advisor indices  Advisor Confidence Index equally weights the Bank Confidence Index, N/RD Confidence Index and the IFA Confidence Index 6 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 8. J.P. Morgan Asset Management Standard Template 2009.ppt Respondent Sample – Wave VI, December 2010  92.5% of retail investors invested in stocks and/or mutual funds over the last 12 months IFAs Banks NRDs Category Retail Corporate (Advisors) (Advisors) (Advisors) Number of respondents 1,671 51 254 20 21 City Delhi / NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad Retail 12% 12% 12% 14% 13% 12% 12% 13% IFAs 13% 12% 13% 13% 12% 12% 11% 14% Corporate 22% 36% 6% 6% 12% 8% 6% 4% Wallet Size 2 to 5 lakhs 5 to 10 lakhs 10 to 25 lakhs 25 to 50 lakhs 50 lakhs + (INR) Retail 35% 31% 17% 11% 6% Treasury size 10 lakhs to 1 1 crore to 50 50 to 150 150 to 500 500 crores + (INR) crore crores crores crores Corporate 4% 10% 10% 14% 62% 7 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 9. Investor and Advisor Confidence, Wave VI, December 2010- Key Findings 8 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 10. J.P. Morgan Asset Management Standard Template 2009.ppt Investment Confidence Index (ICI) nears all-time high  Investment Confidence Index stands at 146.3 in December 2010, up 0.9 points from last quarter  Confidence 0.1 point lower than highest exhibited in September 2009 (146.4) Investment Confidence Index 9 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 11. J.P. Morgan Asset Management Standard Template 2009.ppt ICI holds steady across categories  Advisor confidence sustains recovery to reach 147.2 points; increasing 11.8 points from its low in June 2010  Retail confidence (159.5 points) witnessed a marginal drop (0.6 point) for the first time since July 2009 Retail vs. Corporate vs. Advisors Retail confidence highest in December 2010 10 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 12. J.P. Morgan Asset Management Standard Template 2009.ppt Fears of global economic worries recede  Advisors (173) more optimistic than retail investors (153) and corporates (137) on increase in investments  Indian economy still the biggest confidence booster among retail investors (168) and corporates (143) 11 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 13. J.P. Morgan Asset Management Standard Template 2009.ppt Advisors near-perfectly aligned; Recovery in Banks’ confidence  IFAs (146.9), Banks (147.5) and N/RDs (147.2) record similar confidence levels  Banks‟ confidence level rebounds to 147.5 points, the highest across all advisor categories for the quarter IFAs vs. Banks vs. N/RDs 12 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 14. J.P. Morgan Asset Management Standard Template 2009.ppt Advisors confident of clients’ increasing investments  Banks (165.0) more optimistic than IFAs (155.7) and N/RDs (157.1) of an appreciation in clients‟ portfolios 13 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 15. J.P. Morgan Asset Management Standard Template 2009.ppt Realty / Infrastructure; steady confidence among employees & treasuries  Retail investors from IT/BPO/Outsourcing (154) sector increase the most (26 points) in confidence  Confidence among Retail investors from Retail and Hospitality sector highest (167) after seeing low of 117 in February 2010 Retail confidence (Feb 2010) -147.1 Retail Confidence (Jun 2010) -151.7 Retail confidence (Sep 2010) -160.1 Retail confidence (Dec 2010)- 159.5 Corporate confidence (Feb 2010) -130.7 Corporate Confidence (Jun 2010) -134.0 Corporate confidence (Sep 2010) -131.8 Corporate confidence (Dec 2010)- 131.2 14 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 16. J.P. Morgan Asset Management Standard Template 2009.ppt Pune investor confidence gets a shot in the arm  Confidence among Retail investors in Pune rises a whopping 32 points to 176 as against 144 in June 2010  Delhi/NCR is the second most confident city among both retail investors and IFAs; steady increase in confidence over the year Retail confidence (Feb 2010) -147.1 Retail Confidence (Jun 2010) -151.7 Retail confidence (Sep 2010) -160.1 Retail confidence (Dec 2010)- 159.5 Corporate confidence (Feb 2010) -130.7 Corporate Confidence (Jun 2010) -134.0 Corporate confidence (Sep 2010) -131.8 Corporate confidence (Dec 2010)- 131.2 15 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 17. J.P. Morgan Asset Management Standard Template 2009.ppt Retail investors hopeful of an increase in income as well as investments  Majority retail investors (69%) expect both income and investments to increase compared to the beginning of the year (60% in February 2010) 4 Increase / Decrease in amount of Increase 11% 11% 60% 7% 1% 69% 2 Feb 2010 investments Same 6% 10% 4% 1% 6% 7% 1 Dec 2010 Decrease 2% 1% 2% 0% 2% 0% 0 0 Unlikely to increase 1 Remain the Same 2 Likely to increase 4 Increase / decrease in personal income 16 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 18. J.P. Morgan Asset Management Standard Template 2009.ppt Younger investors more confident once again  Age group 25 to 30 years most confident (164) followed by the age group 22 to 25 years (161) points  Older investors‟ (age group of 60-65) confidence see a sharp decline (-15 points) over June 2010 to a year‟s low of 140 points. Retail confidence (Feb 2010) -147.1 Retail Confidence (Jun 2010) -151.7 Retail confidence (Sep 2010) -160.1 Retail confidence (Dec 2010)- 159.5 17 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 19. J.P. Morgan Asset Management Standard Template 2009.ppt HNI investors sustain confidence  Investors with wallet size INR 25 to 50 lakhs and INR 50 lakhs and above most confident at 162 points each.  Investors with wallet size INR 2 to 5 lakhs (158 points) lowest on confidence yet again Retail confidence (Feb 2010) -147.1 Retail Confidence (Jun 2010) -151.7 Retail confidence (Sep 2010) -160.1 Retail confidence (Dec 2010)- 159.5 18 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 20. J.P. Morgan Asset Management Standard Template 2009.ppt Stocks Down; Mutual Funds Rise  Investment activity in Stocks saw a dip this quarter by 8 percentage points to 68% while mutual funds gain 6 percentage points to reach 66%.  Investment in Retirement & Pension Products (56%) took a beating this quarter; falling 13 percentage points. Retail investment activity in the past 12 months * * Other stock market derivative products (e.g. futures, options) 19 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 21. J.P. Morgan Asset Management Standard Template 2009.ppt Corporates buoyant in their investment activity  Investment activity increases for all investment instruments except debt mutual funds  Debt mutual funds slip further, down to 90% as compared to 94% in September 2010 Corporate investment activity in the past 12 months * * Other stock market derivative products (e.g. futures, options) 20 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 22. J.P. Morgan Asset Management Standard Template 2009.ppt Fixed Maturity Plans prove safe haven for corporates; MMFs suffer  FMPs increase 15 percentage points over the last quarter, record highest gain across all instruments for December 2010  Money Market Funds slump by 21 percentage points, all other instruments record highest investment activity since July 2009 Corporate investments in debt mutual funds in the past 12 months 21 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 23. Other sentiment drivers- Sensex, economic signals, expectations on income 22 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 24. J.P. Morgan Asset Management Standard Template 2009.ppt Investors and advisors expect Sensex to reach 22,000 – 23,000 in June ’11  Retail investors (68%) and advisors (85%) opine that the Sensex will trade at higher levels in June 2011  Advisors (43%) and investors (23%) reckoned the Sensex would trade between 18,000 – 19,000 in December 2010 while it traded between 19,500 – 20,500 Advisors more confident of BSE Sensex trading at higher levels in June 2011 BSE Sensex During the survey Retail investors and advisors conservative of BSE Sensex levels in December 2010 BSE Sensex BSE Sensex During the in December survey 2010 23 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 25. J.P. Morgan Asset Management Standard Template 2009.ppt GDP Growth: Key economic driver in India  Retail (20%), Advisors (49%) and Corporate (53%) consider GDP growth to be the most positive economic indicator  Corporate (12%) and retail (19%) investors consider good corporate results the second-most positive indicator 24 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 26. J.P. Morgan Asset Management Standard Template 2009.ppt GDP Growth the strongest +ve economic indicator throughout 2010  Resurgence in corporate profits not the most positive indicator for retail investors in December 2010 December 2010 September 2010 June 2010 February 2010 25 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 27. J.P. Morgan Asset Management Standard Template 2009.ppt Corruption joins inflation as a confidence killer  63% of corporates are most wary about inflation followed by 48% of advisors and 19% of investors  Corruption a cause of concern for retail investors(19%) and advisors (16%) 26 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 28. J.P. Morgan Asset Management Standard Template 2009.ppt Inflation keeps the financial community anxious  Fears due to high government borrowing / high fiscal deficit subsides as the year progresses December 2010 September 2010 June 2010 February 2010 27 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 29. J.P. Morgan Asset Management Standard Template 2009.ppt Corporate profits to grow further  81% of retail investors positive about a growth in their income in the coming 6 months  Corporates upbeat (85%) of an increase in profits (NPAT) this quarter, increase 9%-points over last quarter Retail Investor increase in personal income Corporate treasuries in profits (NPAT) 28 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 30. Key investment influencers- International markets, information sources, advisory services, capitalinvestments 29 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 31. J.P. Morgan Asset Management Standard Template 2009.ppt Advisors recommend Brazil and China; retail investors prefer USA  47% retail investors and 44% advisors express interest in international market investments  Of the 47% retail investors, 24% favoured USA as their preferred investment destination, while of the 44% of advisors, 56% would recommend China to investors 30 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 32. J.P. Morgan Asset Management Standard Template 2009.ppt China preferred by all categories of advisors  33% of IFAs, 45% of Banks and 52% N/RDs would recommend investing in destinations other than India  China was the most preferred destination across advisors; NRDs (60%), followed by IFAs (47%) and Banks (36%) 31 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 33. J.P. Morgan Asset Management Standard Template 2009.ppt News and financial media least preferred source of information  27% of retail investors favor Broker Services followed by personal network at 24% as their primary information sources for making investment decisions  A meager 6% of investors prefer news and financial media for their investment decisions 32 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 34. J.P. Morgan Asset Management Standard Template 2009.ppt Financial planning & advice most offered advisory service  Financial planning & advice (82%) and financial product advice (76%) are the top two services offered by advisors 33 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 35. J.P. Morgan Asset Management Standard Template 2009.ppt Small size treasuries will definitely undertake capital investments  Large treasuries (INR 500 crores and above) least likely to invest in capital intensive projects in the next 6-12 months Capital investment projects expected in the next 6 – 12 months 34 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 36. J.P. Morgan Asset Management Standard Template 2009.ppt Investors still positive about increase in property prices  Expectations of an increase in property prices have remained flat (74% - 78%) over the year Increase in property prices in the next 6 months 35 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 37. Thank you 36 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 38. Annexure 37 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 39. J.P. Morgan Asset Management Standard Template 2009.ppt Indices by city – December 2010 (Wave VI) December 2010 Delhi/NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad Retail Confidence Index 164.6 165.3 149.2 161.9 146.8 176.3 152.0 159.8 Improvement in Indian economic 169.8 167.5 162.4 170.3 156.2 184.4 165.9 167.3 situation Improvement in investment market 162.6 168.0 151.0 161.7 148.1 174.1 150.2 167.5 environment and atmosphere Improvement in global economic 161.6 165.1 147.3 158.6 144.3 181.0 158.2 140.0 environment Increase in BSE Sensex 165.0 164.2 155.8 157.5 145.5 180.2 150.5 164.0 Appreciation in investment 166.7 162.7 140.5 158.4 144.5 181.2 151.0 164.3 portfolio Change in amount of investments 162.1 163.9 137.9 165.0 142.4 156.6 136.2 155.6 December 2010 Delhi/NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad IFA Confidence Index 158.9 154.0 139.0 145.8 151.7 152.2 125.9 146.1 Improvement in Indian economic 170.3 154.8 145.7 154.7 148.3 143.5 124.1 148.6 situation Improvement in investment market 154.7 151.6 131.4 134.4 146.7 148.4 129.6 138.9 environment and atmosphere Improvement in global economic 131.3 127.4 124.3 118.8 125.0 124.2 105.6 134.7 environment Increase in BSE Sensex 160.9 154.8 131.4 126.6 150.0 148.4 111.1 144.4 Appreciation in investment 160.9 161.3 148.6 160.9 156.7 167.7 135.2 152.8 portfolio Change in amount of investments 175.0 174.2 152.9 179.7 183.3 180.6 150.0 156.9 38 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 40. J.P. Morgan Asset Management Standard Template 2009.ppt Indices by city – September 2010 (Wave V) September 2010 Delhi/NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad Retail Confidence Index 159.2 163.5 151.3 169.0 156.3 151.5 162.5 167.7 Improvement in Indian economic 172.4 169.1 158.4 176.3 162.5 158.3 177.9 170.1 situation Improvement in investment market 165.8 168.7 153.1 170.8 158.6 152.9 179.4 167.2 environment and atmosphere Improvement in global economic 143.8 136.2 148.6 165.7 151.0 127.0 166.2 161.2 environment Increase in BSE Sensex 166.0 169.8 154.6 171.5 161.5 162.0 163.2 172.4 Appreciation in investment 152.2 165.4 147.1 159.4 150.0 155.9 151.7 165.9 portfolio Change in amount of investments 155.2 171.7 146.2 170.3 154.4 152.9 136.5 169.7 September 2010 Delhi/NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad IFA Confidence Index 149.7 156.3 149.7 166.4 158.3 157.1 155.8 161.6 Improvement in Indian economic 148.4 160.9 143.3 176.7 160.6 153.0 145.0 169.4 situation Improvement in investment market 143.5 151.6 150.0 165.0 163.6 156.1 155.0 161.3 environment and atmosphere Improvement in global economic 112.9 107.8 120.0 135.0 128.8 122.7 110.0 116.1 environment Increase in BSE Sensex 154.8 159.4 163.3 168.3 165.2 156.1 165.0 179.0 Appreciation in investment 162.9 178.1 156.7 170.0 157.6 166.7 187.5 171.0 portfolio Change in amount of investments 175.8 179.7 165.0 183.3 174.2 187.9 172.5 172.6 39 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 41. J.P. Morgan Asset Management Standard Template 2009.ppt Indices by city – June 2010 (Wave IV) June 2010 Delhi/NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad Retail Confidence Index 155.6 152.7 148.9 158.9 146.8 143.6 129.0 158.9 Improvement in Indian economic 156.3 155.5 161.5 165.4 143.8 149.5 157.8 165.4 situation Improvement in investment market 156.3 157.6 152.5 162.2 155.0 144.3 137.3 162.2 environment and atmosphere Improvement in global economic 149.5 148.8 143.4 155.0 147.5 133.5 118.8 155.0 environment Increase in BSE Sensex 160.4 150.2 150.5 156.7 151.0 144.3 144.0 156.7 Appreciation in investment 153.6 150.2 146.3 159 147.3 144.1 105.8 159.0 portfolio Change in amount of investments 157.5 153.7 139.5 155.2 136.6 145.8 110.8 155.2 June 2010 Delhi/NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad IFA Confidence Index 143.0 142.5 143.6 145.8 141.7 135.2 134.4 138.3 Improvement in Indian economic 150.0 145.0 148.3 148.4 159.4 162.9 165.0 160.0 situation Improvement in investment market 146.8 147.5 140.0 148.4 148.4 145.2 145.0 145.0 environment and atmosphere Improvement in global economic 106.5 113.8 96.7 106.3 142.2 143.5 135.0 141.7 environment Increase in BSE Sensex 143.5 138.8 146.7 148.4 98.4 100.0 95.0 95.0 Appreciation in investment 151.6 147.5 155.0 151.6 148.4 135.5 130.0 138.3 portfolio Change in amount of investments 159.7 162.5 175.0 171.9 153.1 124.2 136.7 150.0 40 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 42. J.P. Morgan Asset Management Standard Template 2009.ppt Indices by city – February 2010 (Wave III) February 2010 Delhi/NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad Retail Confidence Index 148.5 161.7 137.2 166.2 150.5 152.9 101.5 155.7 Improvement in Indian economic 154.8 165.5 137.0 176.4 151.9 158.3 136.9 169.8 situation Improvement in investment market 147.6 158.5 143.9 164.2 149.0 156.4 110.4 174.5 environment and atmosphere Improvement in global economic 148.2 156.1 136.3 157.5 146.6 151.7 88.4 149.3 environment Increase in BSE Sensex 152.6 167.2 138.0 168.7 149.0 152.4 130.4 161.0 Appreciation in investment 159.0 165.7 134.4 164.2 155.8 146.9 62.1 141.0 portfolio Change in amount of investments 128.9 157.2 133.5 166.4 150.5 151.7 80.7 138.8 February 2010 Delhi/NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad IFA Confidence Index 140.9 142.5 150.3 152.5 146.0 140.3 143.9 150.6 Improvement in Indian economic 140.6 145.0 156.7 153.3 167.7 178.3 158.3 178.3 situation Improvement in investment market 135.9 147.5 146.7 148.3 140.3 146.7 148.3 160.0 environment and atmosphere Improvement in global economic 129.7 113.8 125.0 121.7 150.0 136.7 143.3 155.0 environment Increase in BSE Sensex 137.5 138.8 148.3 153.3 129.0 110.0 123.3 121.7 Appreciation in investment 148.4 147.5 153.3 156.7 137.1 138.3 145.0 141.7 portfolio Change in amount of investments 153.1 162.5 171.7 181.7 151.6 131.7 145.0 146.7 41 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 43. J.P. Morgan Asset Management Standard Template 2009.ppt Indices by city – September 2009 (Wave II) September 2009 Delhi/NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad Retail Confidence Index 145.7 148.9 141.2 163.6 157.2 143.6 130.3 130.5 Improvement in Indian economic 152.0 154.7 146.4 169.7 159.2 146.8 140.9 133.4 situation Improvement in investment market 141.7 151.2 140.8 161.2 160.4 141.6 131.5 135.1 environment and atmosphere Improvement in global economic 139.5 147.0 134.5 159.5 160.1 131.8 119.0 128.5 environment Increase in BSE Sensex 153.4 148.0 146.4 169.9 153.1 154.7 139.4 127.7 Appreciation in investment 141.9 148.3 141.5 159.7 155.8 139.4 132.0 128.2 portfolio Change in amount of investments 141.2 144.1 137.4 161.4 154.3 147.0 119.0 130.0 September 2009 Delhi/NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad IFA Confidence Index 153.5 154.8 145.2 151.4 146.9 149.4 143.8 153.2 Improvement in Indian economic 154.8 160.0 145.2 148.3 160.0 160.0 154.2 167.7 situation Improvement in investment market 151.6 160.0 140.3 153.3 155.0 158.3 147.9 162.9 environment and atmosphere Improvement in global economic 127.4 134.4 133.9 126.7 143.3 145.0 158.3 162.9 environment Increase in BSE Sensex 161.3 155.6 141.9 148.3 123.3 123.3 129.2 116.1 Appreciation in investment 162.9 163.3 154.8 156.7 145.0 158.3 125.0 159.7 portfolio Change in amount of investments 162.9 155.6 154.8 175.0 155.0 151.7 147.9 150.0 42 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 44. J.P. Morgan Asset Management Standard Template 2009.ppt Indices by city – July 2009 (Wave I) July 2009 Delhi/NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad Retail Confidence Index 139.7 142.5 144.6 160.2 131.7 149.6 98.1 137.2 Improvement in Indian economic 144.0 149.0 149.5 166.2 131.1 154.6 102.7 137.9 situation Improvement in investment market 140.7 145.0 146.0 157.7 134.5 152.1 101.7 136.0 environment and atmosphere Improvement in global economic 133.9 132.0 141.8 156.3 126.6 139.9 96.5 133.7 environment Increase in BSE Sensex 143.0 141.0 144.8 160.8 133.0 155.5 103.5 139.5 Appreciation in investment 135.9 144.3 144.8 159.4 130.2 150.4 99.8 137.9 portfolio Change in amount of investments 140.5 144.0 140.8 160.8 134.5 145.0 84.3 138.3 July 2009 Delhi/NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad IFA Confidence Index 139.7 142.5 144.6 160.2 131.7 149.6 98.1 137.2 Improvement in Indian economic 144.0 149.0 149.5 166.2 131.1 154.6 102.7 137.9 situation Improvement in investment market 140.7 145.0 146.0 157.7 134.5 152.1 101.7 136.0 environment and atmosphere Improvement in global economic 133.9 132.0 141.8 156.3 126.6 139.9 96.5 133.7 environment Increase in BSE Sensex 143.0 141.0 144.8 160.8 133.0 155.5 103.5 139.5 Appreciation in investment 135.9 144.3 144.8 159.4 130.2 150.4 99.8 137.9 portfolio Change in amount of investments 140.5 144.0 140.8 160.8 134.5 145.0 84.3 138.3 43 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 45. J.P. Morgan Asset Management Standard Template 2009.ppt Indices – Overall Jul 2009 Sep 2009 Feb 2010 Jun 2010 Sep 2010 Dec 2010 Retail 138.3 145.1 147.1 151.7 160.1 159.5 Advisor 136.0 151.7 145.9 135.4 144.1 147.2 Corporate 133.5 142.5 130.7 134.0 131.8 132.2 44 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 46. J.P. Morgan Asset Management Standard Template 2009.ppt Survey Methodology Interviews - face-to-face, online and telephone – with investors and advisors in Delhi / NCR, Kolkata, Ahmedabad, Mumbai, Pune, Hyderabad, Bengaluru and Chennai  Screeners to capture respondent profile – Retail: Gender, location, age, occupational status, sector of engagement, liquid assets, investment activity in the past year – Corporate: Treasury size, years of treasury experience and treasury activity in the past year – Advisors: Extent of distribution reach, location (for IFAs)  Six index questions to compute indices - respondents‟ confidence, over the next six months – Improvement in the Indian economic situation, general Investment market environment and atmosphere, global economic situation – BSE Sensex increasing from current levels – Prospect of self (retail and corporate) / clients‟ (advisors) investment portfolio appreciating and – Increase / decrease in investments (self - retail and corporate, clients‟ – advisors)  Other questions – primary source of investment information, new capital investment projects, types of financial advisory services rendered, preferred investment destination, positive and negative economic indicators, likelihood of non-investment income increasing, and range BSE Sensex will trade at in June 2011. …current survey conducted between 13th December – 26th December, 2010 45 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 47. J.P. Morgan Asset Management Standard Template 2009.ppt Index Construction Methodology Three indices constructed in a similar manner from the six “Index” questions posed to all  Each Index question assigned a point between 0 and 200 – Extremely likely - 200 points – Somewhat likely – 150 points – More or less the same as current – 100 points – Somewhat unlikely – 50 points – Extremely unlikely – 0 points  All six Index questions carry equal weight – Sub – indices computed for each Index question, weighted by number of responses – Average of the six sub – indices is the overall Index for the category / segment / city  The Advisor Confidence Index equally weights the Bank Confidence Index, N/RDs Confidence Index and the IFA Confidence Index …indices at any point, can range from “0” to “200”; 200 being the highest possible confidence 46 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 48. Respondent Sample- Retail, Corporate & Advisor 47 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 49. J.P. Morgan Asset Management Standard Template 2009.ppt Eligibility  Retail – Employees from media, advertising & marketing, PR, research and financial websites excluded – Employees and immediate relatives of J.P. Morgan Asset Management and ValueNotes not eligible for participation – Investment experience > 2 years – Age >=22 and <=65 – >= INR 2 lakhs in wallet size – Invested in stocks, mutual funds, bonds, foreign currency, certificate of deposits, warrants or derivative products in the last year – Actively save for investments, whether regularly or once in a while  Corporate – Treasury size > =INR 10 lakhs – Treasury experience >= 2 years  Advisors – Distribute financial products – >= 2 years of experience in financial services – N/RDs with nation – wide reach 48 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 50. J.P. Morgan Asset Management Standard Template 2009.ppt Retail respondent profile  1,671 retail investors from the selected cities surveyed 49 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 51. J.P. Morgan Asset Management Standard Template 2009.ppt Corporate respondent profile  Treasury size represents investments excluding strategic equity holdings and hedging investments 50 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 52. J.P. Morgan Asset Management Standard Template 2009.ppt Advisor respondent profile  Advisors include 20 banks, 21 National / Regional Distributors (N/RDs) and 254 IFAs from the selected cities  “Advisor” sentiment equally weighted across the three categories 51 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 53. J.P. Morgan Asset Management Standard Template 2009.ppt Disclaimers / Risk Factors  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 behavior. 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. J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010
  • 54. J.P. Morgan Asset Management Standard Template 2009.ppt  Research Methodology  Retail investors, corporate investors and advisors were surveyed through a combination of face-to-face interviews, online surveys (through www.valuenotes.com) and telephone interviews. The surveys were conducted in selected Indian cities -Delhi / NCR, Kolkata, Ahmedabad, Mumbai, Pune, Hyderabad, Bengaluru and Chennai. The number of responses to each question is multiplied by the respective confidence-level point and these are aggregated at each Index question level. Sub –indices are calculated for each of these six Index questions, which is the arithmetical mean of the aggregates. The arithmetical mean of the sub –indices forms the Overall Confidence Index for that respondent category. The Advisor Confidence Index gives equal weights to the Bank Confidence Index, ND Confidence Index and the IFA Confidence Index to arrive at the overall advisor sentiment. The Confidence Index, at any given point can vary between 0 and 200. 200 denotes the highest level of confidence in improvement from current conditions, 100 denotes a neutral sentiment and 0 denotes an extremely negative outlook.  Accuracy or Adequacy of Information  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.  Interpretations and assumptions which may differ from person to person  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 behavior. 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.  Reproduction of material is prohibited unless approval is taken  Information provided in this survey report is with the intent that it be readily available for personal and public non-commercial use and may be reproduced, in part or in whole and by any means, without charge or further permission from J. P. Morgan Asset Management. We only ask that –Users exercise due diligence in ensuring the accuracy of the materials reproduced; J. P. Morgan Asset Management be identified as the source; and, the reproduction is not represented as an official version of the materials reproduced, nor as having been made, in affiliation with or with the endorsement of J. P. Morgan Asset Management. Our Corporate logo may not be used for any purpose without explicit authorization.  Reproduction of material included in this survey report, in whole or in part, for the purposes of commercial distribution is prohibited except with written permission from J. P. Morgan Asset Management. Through the permission granting process, J. P. Morgan Asset Management helps ensure individuals/organizations wishing to reproduce materials for commercial purposes have access to the most accurate, up-to-date versions. To obtain permission to reproduce materials on this site for commercial purposes, please contact: Head –Marketing and Communications, JPMorgan Asset Management India Private Limited, Kalpataru Synergy, 3rdFloor, West Wing, Santacruz –East, Mumbai –400 055 Tel: +91 22 6783 7202 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – December 13th to December 26th, 2010