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JP Morgan -ValueNotes  Investment Confidence Index Wave 8, July 2011
 

JP Morgan -ValueNotes Investment Confidence Index Wave 8, July 2011

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The Investment Confidence Index, published quarterly, captures the confidence of the retail and corporate investor sector as well as financial advisors on the Indian economic and investment ...

The Investment Confidence Index, published quarterly, captures the confidence of the retail and corporate investor sector as well as financial advisors on the Indian economic and investment environment.

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    JP Morgan -ValueNotes  Investment Confidence Index Wave 8, July 2011 JP Morgan -ValueNotes Investment Confidence Index Wave 8, July 2011 Presentation Transcript

    • J.P. Morgan Asset Management – ValueNotesInvestment Confidence Index – Wave VIII, July 2011 …India‟s only Investor and Advisor focused sentiment indicator J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • 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 – July 22nd to August 04th, 2011
    • 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 20th wave (2Q 2011) 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 – July 22nd to August 04th, 2011
    • 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 – July 22nd to August 04th, 2011
    • 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 – July 22nd to August 04th, 2011
    • 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 – July 22nd to August 04th, 2011
    • 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 – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Respondent Sample – Wave VIII, July 2011  92.4% 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 1,623 50 309 20 20 City Delhi / NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad Retail 14% 13% 12% 12% 12% 13% 12% 12% IFAs 12% 17% 12% 12% 14% 11% 12% 10% Corporate 18% 34% 4% 4% 6% 26% 4% 4% Wallet Size 2 to 5 lakhs 5 to 10 lakhs 10 to 25 lakhs 25 to 50 lakhs 50 lakhs + (INR) Retail 27% 33% 25% 10% 5% 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% 18% 24% 18% 36% 7 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • Investor and Advisor Confidence, Wave VIII, July 2011- Key Findings 8 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Investment Confidence Index (ICI) touches its lowest  Investment Confidence Index score stands at 123.8, falling 8.5 points from last quarter  Continuous fall in confidence level indicates increasing cautiousness within the Indian financial community Investment Confidence Index Jul 2009 135.9 Sep 2009 146.4 Feb 2010 141.2 Jun 2010 140.4 Sep 2010 145.4 Dec 2010 146.3 Mar 2011 132.3 Jul 2011 123.8 0 50 100 150 200 Extremely Unlikely Somewhat Unlikely More or Less the Same as Current Somewhat Likely Extremely Likely 9 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Corporates most sceptical of the lot  Confidence across all categories heads south; optimism within India Inc. drops 15 points Retail vs. Corporate vs. Advisors Neutral 138 145 147 152 Retail 160 Jul 2009 159 142 Sep 2009 Retail confidence lowest in July 2011 137 Feb 2010 134 142 Jun 2010 131 134 Sep 2010 Corporate 132 132 Dec 2010 124 Corporate confidence lowest in March 109 2011 Mar 2011 136 Jul 2011 152 146 135 Advisor 144 147 131 125 50 100 150 200 Somewhat Unlikely More or Less the Same as Current Somewhat Likely Extremely Likely 10 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Domestic and global economic woes dent confidence across the board  Optimism over global economic environment falters dramatically within India Inc. (82)  Advisors (153) more upbeat about increase in investments than retail investors (139) Neutral 139 Improvement in Indian 104 economic situation 120 135 Improvement in investment market 110 environment and atmosphere Retail 119 134 Improvement in global 82 Corporate economic environment 93 140 Advisor Increase in BSE Sensex 102 126 138 Appreciation in 131 investment portfolio 138 139 Change in amount 125 of investments 153 50 100 150 200 Somewhat Unlikely More or Less the Same as Current Somewhat Likely Extremely Likely 11 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Advisor sentiment shaken across all categories; Banks least confident  Bank confidence hurt the most, falls 15 points since March 2011 IFAs vs. Banks vs. N/RDs Neutral 134.9 150.2 145.7 139.7 IFA 156.9 Jul 2009 146.9 139.0 Sep 2009 136.5 Feb 2010 137.9 157.5 Jun 2010 149.6 Banks 139.6 Sep 2010 135.0 147.5 Dec 2010 129.6 114.6 Mar 2011 135.0 Jul 2011 147.2 142.5 126.9 N/RDs 140.4 147.2 125.8 123.8 50 100 150 200 Extremely Unlikely Somewhat Unlikely More or Less the Same as Current Somewhat Likely Extremely Likely 12 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Advisors hopeful that clients’ investments will appreciate  IFAs (159 points) expect higher client inflows. Banks (75 points) most pessimistic about global economic environment. Neutral Improvement in Indian 134 103 economic situation 123 133 Improvement in investment market 105 environment and atmosphere 120 108 IFA Improvement in global 75 economic environment 98 Banks 140 Increase in BSE Sensex 110 N/RDs 128 144 Appreciation in 140 investment portfolio 130 159 Change in amount 155 of investments 145 136 Advisor Confidence Index 115 124 50 100 150 200 Somewhat Unlikely More or Less the Same as Current Somewhat Likely Extremely Likely 13 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Investment activity in Mutual funds jumps significantly  Investment activity in Mutual Funds (61%) improves significantly (11 percentage points) since March 2011.  Instruments with most activity such as Time Deposits (42%), and Stocks (64%) witness a marginal rise this quarter compared to March 2011 levels Retail investment activity in the past 12 months 100% 92% 95% 89% Sep 2010 Dec 2010 82% Mar 2011 Jul 2011 80% 69% 52% 54% 56% 58% 59% 60% 42% 40% 37% 35% 35% 36% 36% 29% 27% 25% 22% 20% 5% 7% 9% 9% 0% Savings account Time deposit Insurance and Retirement Property Gold and other bullion Foreign currencies products 100% 80% 76% 68% 66% 61% 64% 60% 61% 60% 50% 40% 23%19% 22% 20% 18% 18% 12% 13%16% 12%13% 12% 20% 3% 4% 2% 4% 1% 2% 1% 1% 0% Stocks Mutual Funds Bonds Certificate of Warrants Derivatives* Others deposits * Other stock market derivative products (e.g. futures, options) 14 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Delhi/ NCR investors buck the trend; most confident amongst other cities  IFAs in Bengaluru and Ahmedabad most optimistic (141) across all cities  Investor confidence in Bengaluru (127) records biggest dip (20 points) since last quarter 200 Retail confidence (Sep 2010) -160.1 Retail confidence (Dec 2010) - 159.5 Retail (Sep 2010) Retail (Dec 2010) Retail confidence (Mar 2011) - 142.0 Retail confidence (Jul 2011) - 137.5 Retail (Mar 2011) Retail (Jul 2011) 169 176 168 165 163 159 158 163 165 162 156 152 160 160 151 151 149 152 147 147 152 150 138 144 136 136 135 138 130 135 133 127 126 120 80 Delhi / NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad 200 IFA confidence (Sep 2010) - 156.9 IFA confidence (Dec 2010) - 146.9 IFA (Sep 2010) IFA (Dec 2010) IFA confidence (Mar 2011) - 139.0 IFA confidence (Jul 2011) - 136.5 IFA (Mar 2011) IFA (Jul 2011) 159 166 162 156 154 158 152 157 152 156 160 150 145 146 150 146 150 140 141 146 141 139 139 137 135 139 137 130 130 132 131 133 126 120 80 Delhi / NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad 15 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Confidence revives among older investors  Confidence among investors aged 55 to 60 years and aged 60 to 65 years records sharp rebound of 10 points and 15 points, respectively, since March 2011  Confidence among middle aged investors (40 – 45 years) drops 11 points over March 2011 180 Retail Confidence (Dec 2010) - 159.5 Retail Confidence (Sep 2010) - 160.1 Sep 2010 Dec 2010 Mar 2011 Jul 2011 Retail Confidence (Jul 2011) - 137.5 Retail Confidence (Mar 2011) - 142.0 170 162164 159 161 159 160 161 160 161 160 157 157 157 153 155 155 153151 149 150 142 143 143 140 140 140 140 140 139 138 138 139 136 137 136 135 130 130 125 124 120 Age 22 to 25 Age 25 to 30 Age 30 to 35 Age 35 to 40 Age 40 to 45 Age 45 to 50 Age 50 to 55 Age 55 to 60 Age 60 to 65 16 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Banking and Financial Services a popular sector for investment  Retail investors (36%) and advisors (56%) vote for investing in the Banking and Financial Services sector  FMCG and IT & ITES sectors runners-up for advisors (38%) and retail investors (27%) respectively. 60% Retail Advisor 56% 50% 38% 40% 36% 30% 27% 25% 23% 24% 21% 20% 18% 15% 12% 10% 12% 11% 10% 7% 6% 4% 2% 0% Automobiles Banking and Capital Goods FMCG Oil and gas IT & ITES Telecom Others Don‟t know/ Financial refused to Services answer 17 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Current investor strategy – Be cautious  Current investment strategy for most retail investors is to preserve capital (40%) and to maintain a cautious outlook towards their investments (35%)  Investors expected to turn more aggressive (54%) with their investment strategies in the next six months Current investment strategy Investment strategy in coming 6 months 3% 10% 12% 14% 15% Risk Averse Extremely aggressive Somewhat aggressive Preserve Capital No change Cautious 35% Investments Somewhat conservative Willing to take risks 31% 40% 40% Extremely conservative 18 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Corporate activity in Mutual Funds takes a drubbing  Instruments with most activity such as Debt Mutual Funds, Stocks and Bonds witness a significant drop this quarter compared to December 2010 levels  Debt Mutual Funds (74%) and Stocks (18%) take a beating of 18 and 28 percentage points, respectively Corporate investment activity in the past 12 months 94% 90% 92% Sep 2010 Dec 2010 100% Mar 2011 Jul 2011 80% 74% 74% 67% 70% 60% 56% 43% 47% 44% 45% 46% 32% 32% 37% 38% 40% 30% 30% 26% 22% 24% 26% 18% 20% 0% Term deposits Inter-corporate deposits Commercial Papers Debt Mutual Funds Equity Mutual Funds Stocks 100% 80% 59% 60% 48% 45% 40% 34% 38% 30% 28% 22% 24% 25% 20% 16% 14% 8% 8% 4% 6% 10% 4% 4% 6% 4% 2% 0% 2% 0% Bonds Certificate of deposits Warrants Derivatives* Structured products Others * Other stock market derivative products (e.g. futures, options) 19 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt MMFs still preferred while FMPs lose favour  Fixed Maturity Plans (36%) down 24 percentage points this quarter and 33 percentage points since 6 months  Bond Funds (20%), Floating Rate Debt Funds (14%), GILT Funds (8%) drop this quarter by 26/26/24 percentage points respectively Corporate investments in debt mutual funds in the past 12 months 100% Sep 2010 Dec 2010 Mar 2011 Jul 2011 90% 88% 86% 84% 80% 67% 69% 70% 60% 60% 54% 50% 46% 39% 40% 40% 35% 36% 34% 32% 32% 30% 25% 20% 20% 20% 14% 12% 8% 10% 0% 0% 0% 0% Bond funds Money Market Fixed Maturity Floating Rate GILT funds Others Funds Plans Debt Funds 20 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Corporates likely to maintain current investment levels in liquid funds  Despite RBI‟s regulation on limiting banks‟ exposure in liquid funds to 10% (of the previous year‟s networth), 50% are corporates likely to maintain current investment amount in liquid funds prior its implementation (i.e January 2012)  However, 28% of corporates expected to increase liquid funds investments before implementation of the regulation 10% 10% Definitely will increase 18% 12% Somewhat likely to increase Maintain the current investment amount Somewhat likely to decrease Definitely will decrease 50% 21 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Majority advisors consider ‘3 – 5 years’ as long-term  Long term investments for corporates is a shorter time span compared to advisors and retail investors; 48% corporate interpret 1 - 3 years as long term whereas, 32% interpret 3 – 5 years  Advisors (47%) and retail investors (29%) interpret long term investment period to be between 3 and 5 years 60% Retail Corporate Advisor 50% 47% 40% 32% 28% 29% 30% 24% 25% 20% 20% 19% 20% 13% 12% 10% 8% 6% 4% 4% 3% 2% 0% 2% 0% 0% 0% Less than 1 year 1 year – 2 years 2 years – 3 years 3 years – 5 years 5 years – 10 years Over 10 years Cant Say 22 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Financial community expects higher ROI from equity funds over long-term  A majority of advisors (45%), retail (39%) and corporates (36%) expect an annual return of 10 – 15% from equity funds with an investment horizon of more than three years  A sizeable percentage of advisors (36%), retail investors (19%) and corporate (38%) are expecting a higher return of 15 – 12% 60% Retail Corporate Advisor 50% 45% 39% 38% 40% 36% 36% 30% 24% 19% 20% 11% 12% 10% 10% 7% 7% 7% 4% 2% 3% 0% 0% 0% 0 - 5% 5 - 10% 10 - 15% 15 - 20% Above 20% Cant Say 23 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • Other sentiment drivers- Sensex, economic signals, expectations on income 24 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Sensex likely to trade between 19,000 – 21,000 in Dec’ 2011  Retail investors (48%) and advisors (58%) expect BSE Sensex to hover between 19,000 and 21,000 in Dec‟ 2011.  Advisors (37%) and retail investors (26%) were highly optimistic about the Sensex levels in March 2011, indicating it will trade between 20,000 – 21,000. However, it traded between 17,800 – 19,200 Advisors more confident of BSE Sensex trading at higher levels in December 2011 Retail Advisor 45% BSE Sensex 35% during the Survey 23% 35% 25% 25% 23% 19% 15% 15% 10% 0% 3% 5% 12% 5% 0% 2% 10% 7% 2% 1% 1% -5% 0% 1% 1% 0% 4% 1% 0% 0% 0- 14000 14000 - 15000 - 16000 - 17000 - 18000 - 19000 - 20000 - 21000 - 22000 - 23000 - 24000 - 25000 - 15000 16000 17000 18000 19000 20000 21000 22000 23000 24000 25000 26000 Investors and advisors optimistic about Sensex in June 2011; Majority proved incorrect 35% BSE Retail Advisor 29% BSE Sensex Sensex in 25% December 27% 23% 23% in June 2011 2010 21% 15% 22% 11% 10% 4% 3% 6% 5% 1% 5% 1% 2% 1% 4% 1% 1% 4% 0% 1% 0% 0% 1% 0% -5% 0- 17000 17000 - 18000 - 19000 - 20000 - 21000 - 22000 - 23000 - 24000 - 25000 - 26000 - 27000 - 28000 and 18000 19000 20000 21000 22000 23000 24000 25000 26000 27000 28000 above 25 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt GDP growth – Most positive economic booster  Advisors (31%) are most optimistic on GDP growth compared to retail investors (23%) and corporates (20%)  Corporates (18%) consider RBI measures as the second most positive indicator along with retail investors (20%) and advisors (23%) 60% Retail Corporate Advisors 50% 40% 31% 30% 23% 23% 20% 20% 20% 18% 15% 16% 14% 13% 11% 12% 10% 10% 10% 10% 11% 10% 8% 7% 4% 4% 5% 2% 1% 0% Good corporate GDP growth RBI‟s continued Increase in Increased credit Increase in Governments fiscal Others results meeting/exceeding monetary employment offtake from the Industrial output / measures expectations measures opportunities private sector Exports 26 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt GDP growth holds traction through the year  Outlook over GDP growth gathers steam over the year especially among retail investors. 23% investors vote GDP growth as a positive indicator in July 2011 as against 16% in September 2010  Retail investor outlook towards corporate results (11%) falls 14 percentage points over the year July 2011 March 2011 60% 60% Retail Corporate Advisors 46% 40% 31% 40% 23% 25% 26% 20% 20% 18% 23% 24% 19% 21% 20% 15% 15% 11% 12% 20% 12% 4% 0% 0% Good corporate results GDP growth RBI‟s continued Good corporate results GDP growth RBI‟s continued meeting/exceeding monetary measures meeting/exceeding monetary measures expectations expectations December 2010 September 2010 60% 53% 60% Retail Corporate Advisors 49% 34% 37% 40% 40% 25% 19% 20% 17% 16% 16% 20% 14% 13% 20% 12% 14% 11% 7% 6% 6% 0% 0% Good corporate results GDP growth RBI‟s continued Good corporate results GDP growth RBI‟s continued meeting/exceeding monetary measures meeting/exceeding monetary measures expectations expectations 27 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Inflation and corruption create jitters within the financial fraternity  India Inc. most worried about inflation. 58% corporates believe inflation to be a leading negative economic indicator  Poor governance and corruption turned out to be second biggest negative economic indicator this quarter. Retail (23%), Corporate (18%), Advisors (22%) 80% Retail Corporate Advisors 70% 60% 58% 54% 50% 40% 31% 30% 23% 22% 20% 17% 18% 18% 10% 9% 10% 6% 6% 7% 6% 3% 3% 4% 2% 1% 1% 1% 0% Inflation Impact of changing High govt borrowings Increase in interest Poor governance and Eurozone sovereign Others climate globally / high fiscal deficit rates corruption debt crisis 28 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Inflationary woes mount over the year  Inflation and corruption act as biggest confidence killers through the year. Retail investors consistently worried about high fiscal deficit. July 2011 March 2011 80% 80% 70% Retail 58% 60% Corporate 60% 54% 60% Advisors 40% 31% 40% 23% 26% 18% 22% 17% 22% 22% 17% 20% 20% 12% 6% 4% 8% 1% 0% 0% Inflation Poor governance and High govt borrowings / Inflation Corruption High govt borrowings / corruption high fiscal deficit high fiscal deficit December 2010 September 2010 80% 80% Retail 63% Corporate 60% 48% 60% Advisors 40% 40% 40% 36% 30% 30% 19% 19% 26% 26% 16% 17% 16% 20% 8% 20% 14% 4% 4% 8% 0% 0% Inflation Corruption High govt borrowings / Inflation High govt borrowings / Fear of resurgence of high fiscal deficit high fiscal deficit US / global recession 29 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Corporates upbeat about increase in profits  A significant 54% of corporates believe that profits (NPAT) are „somewhat likely to increase, while 18% believe it is „extremely likely‟ to increase  Retail investors‟ expectation (66%) about increase in income drops 9 percentage points from March 2011. Retail Investor increase in personal income Corporate treasuries in profits (NPAT) 100% 19% 14% 18% 22% Extremely likely 32% 37% 36% 80% 42% Somewhat likely 60% 47% 54% More or less 53% 71% the same 49% 40% 34% 40% 46% Somewhat unlikely 26% 26% 20% 23% 20% 22% Extremely unlikely 15% 17% 16% 7% 1% 1% 4%0% 2%0% 0% 0% 2%0% 1% 0%0% 2% 0% 0% Retail (Sep Retail (Dec Retail (Mar Retail (Jul Corporate Corporate Corporate (Mar Corporate (Jul 2010) 2010) 2011) 2011) (Sep 2010) (Dec 2010) 2011) 2011) 30 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • Key investment influencers- International markets, information sources, expected retirement age, advisoryservices, capital investments 31 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Advisors favour international markets; Retail investors think otherwise  40% advisors in favour of recommending investments in international markets, while only 16% retail investors show inclination towards investing in international markets. International investment preference- Retail investors International investment preference- Advisors 16% 40% Yes Yes No No 60% 84% 32 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Advisors recommend Emerging Markets; Retail investors opt for Asia and USA  36% Advisors are likely to recommend their clients to invest in Emerging Markets while only 7% of retail investors think of investing in Emerging Markets. Retail investors consider Asia (32%) and USA (27%) as preferred international investment destinations 50% Retail Advisors 40% 36% 32% 30% 27% 24% 22% 20% 20% 15% 13% 13% 13% 10% 7% 7% 4% 5% 4% 0% 0% USA Europe Japan Asia South East Asia Greater China Emerging markets Others 33 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt N/RDs and IFAs recommend Emerging Markets; Banks prefer Asia  40% IFAs, 30% Banks and 50% N/RDs recommend investors invest in markets other than India  Of the 50% of N/RDs, 60% select Emerging Markets as their favoured international market followed by China (20%) and Asia (20%) 80% IFA Banks N/RD 70% 60% 60% 50% 40% 36% 34% 30% 24% 20% 20% 21% 20% 20% 17% 14% 12% 14% 11% 10% 10% 7% 7% 7% 5% 5% 0% 0% 0% 0% 0% 0% USA Europe Japan Asia South East Asia Greater China Emerging markets Others 34 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Financial Advisors and Personal Network preferred  19% retail investors prefer financial advisors while 26% prefer personal network as a source of information for investment decision making 30% Sep 2010 Dec 2010 Mar 2011 Jul 2011 28% 27% 26% 25% 25% 24% 24% 20% 19% 18%18% 18% 16% 15% 15% 12% 13% 12% 11% 11% 10% 10% 8% 8% 9% 8% 7% 8% 7% 6% 5% 5% 5% 0% Broker services Financial advisor Bank relationship News & financial Online resources Personal network Personal research manager media 35 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Investors likely to retire when aged 55-60 years  39% and 34% of retail investors expect to retire between 55 to 60 years and 60 to 65 years, respectively  12% of investors expect to retire between 50 to 55 years and 8% of investors expect to retire between 65 to 70 years of age Below 45 0% 1%3% 1% Age 45 to 50 2% 12% 8% Age 50 to 55 Age 55 to 60 Age 60 to 65 Age 65 to 70 34% Age over 70 39% Already retired Cant say 36 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Corporates unlikely to undertake capital investments in near future  Majority of the corporates (60%) are unlikely to undertake capital investment during the next 6 -12 months. In comparison 60% corporates were likely to make capital investments in March 2011. Capital investment projects expected in the next 6 – 12 months 100% 8% Extremely likely 90% 24% 20% 8% 80% 36% Somewhat likely 70% 24% 60% 27% 12% More or less the 40% same 50% 40% 18% 36% Somewhat unlikely 20% 30% 8% 24% Extremely unlikely 20% 12% 10% 26% 12% 24% 18% 4% 0% Sep 2010 Dec 2010 Mar 2011 Jul 2011 37 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • Thank you 38 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • Annexure 39 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Indices by city – July 2011 (Wave VIII) July 2011 Delhi/NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad Retail Confidence Index 158.4 135.0 137.7 143.5 126.9 136.1 125.8 137.7 Improvement in Indian economic 165.0 118.2 141.4 142.2 135.5 141.0 132.2 133.7 situation Improvement in investment market 158.1 123.5 139.9 136.7 124.1 136.3 121.0 138.4 environment and atmosphere Improvement in global economic 150.2 136.9 133.3 140.4 123.0 129.5 113.9 146.8 environment Increase in BSE Sensex 162.7 132.8 143.2 148.8 133.3 133.2 130.0 135.4 Appreciation in investment 156.9 144.2 133.3 146.4 130.0 137.3 125.7 133.4 portfolio Change in amount of investments 157.2 154.4 134.8 146.7 115.1 139.3 132.2 138.4 July 2011 Delhi/NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad IFA Confidence Index 138.8 129.9 132.1 140.1 140.6 135.1 137.4 141.0 Improvement in Indian economic 140.6 131.5 124.2 145.2 140.8 132.8 130.3 125.9 situation Improvement in investment market 131.3 131.5 131.8 148.4 132.9 131.0 125.8 137.0 environment and atmosphere Improvement in global economic 114.1 98.9 97.0 104.8 111.8 112.1 112.1 116.7 environment Increase in BSE Sensex 142.2 135.9 136.4 145.2 146.1 139.7 133.3 142.6 Appreciation in investment 145.3 141.3 151.5 135.5 144.7 143.1 139.4 157.4 portfolio Change in amount of investments 159.4 140.2 151.5 161.3 167.1 151.7 183.3 166.7 40 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to March 29th 2011 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – March 15thto August 04th,,2011
    • Indices by city – March 2011 (Wave VII) March 2011 Delhi/NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad AhmedabadRetail Confidence Index 151.5 130.2 133.5 151.9 147.2 136.5 135.4 150.0Improvement in Indian economic 154.2 132.9 143.5 156.7 161.6 143.2 144.8 159.2situationImprovement in investment market 151.7 128.3 134.8 152.7 144.1 138.8 135.7 148.8environment and atmosphereImprovement in global economic 147.3 107.1 128.8 155.2 152.5 119.5 120.7 137.1environmentIncrease in BSE Sensex 151.7 123.8 130.5 154.2 143.6 136.1 142.1 144.2Appreciation in investment 153.5 139.8 130.3 143.6 143.3 139.0 134.0 153.2portfolioChange in amount of investments 150.2 149.0 133.0 146.1 137.9 142.2 135.2 157.8 March 2011 Delhi/NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad AhmedabadIFA Confidence Index 145.2 145.6 130.3 150.3 131.4 137.2 139 132.8Improvement in Indian economic 141.9 146.9 110.0 160.0 130.0 136.7 137.1 131.7situationImprovement in investment market 143.5 145.3 111.7 156.7 128.3 141.7 146.8 131.7environment and atmosphereImprovement in global economic 125.8 123.4 96.7 131.7 105.0 116.7 106.5 120.0environmentIncrease in BSE Sensex 133.9 148.4 140.0 140.0 126.7 136.7 130.6 140.0Appreciation in investment 150.0 148.4 153.3 145.0 125.0 138.3 145.2 131.7portfolioChange in amount of investments 175.8 160.9 170.0 168.3 173.3 153.3 167.7 141.7 41 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – March 15th to March 29th, 2011
    • 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 42 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • 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 43 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • 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 44 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • 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 45 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • 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 46 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • 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 47 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Indices – Overall Jul 2009 Sep 2009 Feb 2010 Jun 2010 Sep 2010 Dec 2010 Mar 2011 Jul 2011 Retail 138.3 145.1 147.1 151.7 160.1 159.5 142.0 137.5 Advisor 136.0 151.7 145.9 135.4 144.1 147.2 131.5 124.9 Corporate 133.5 142.5 130.7 134.0 131.8 132.2 123.5 109.0 48 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • 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, interpretation of a „long term‟ investment, expected percentage of annual return, likelihood of non-investment income increasing, and range BSE Sensex will trade at in December 2011,preferred sector for investment, effect of RBI‟s regulation on limiting investment in liquid funds on corporates. …current survey conducted between 22nd July – 4th August, 2011 49 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • 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 50 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • Respondent Sample- Retail, Corporate & Advisor 51 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • 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 52 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Retail respondent profile  1,623 retail investors from the selected cities surveyed Retail – By city Retail – By wallet size Delhi / NCR INR 2 to 5 lakhs 12% 14% 5% Mumbai 10% 27% Kolkata INR 5 to 10 lakhs 12% 13% Chennai INR 10 to 25 lakhs Bengaluru 25% 13% 12% Pune INR 25 to 50 lakhs Hyderabad 12% 12% 33% INR 50 lakhs and above Ahmedabad 53 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Corporate respondent profile  Treasury size represents investments excluding strategic equity holdings and hedging investments Corporate – By City Corporate – By treasury size 4% Delhi / NCR INR 10 lakhs – 100 4% 4% lakhs (INR 1 crore) 18% Mumbai 18% INR 1 – 50 crores Kolkata 36% 26% Chennai INR 50 – 150 crores Bengaluru Pune INR 150 – 500 crores 34% 24% 6% Hyderabad 4% INR 500 crores and 4% 18% Ahmedabad above 54 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Advisor respondent profile  Advisors include 20 banks, 20 National / Regional Distributors (N/RDs) and 269 IFAs from the selected cities  “Advisor” sentiment equally weighted across the three categories IFAs – By City Delhi / NCR 10% 12% Mumbai 12% Kolkata 17% Chennai Bengaluru 11% Pune 12% Hyderabad 14% 12% Ahmedabad 55 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • J.P. Morgan Asset Management Standard Template 2009.ppt Advisory services profile  Financial planning & advice (84%) is the top service offered by advisors followed by financial product advice (76%) Basic tax planning 61% Capital market advice 54% Financial product advice 76% Financial planning & advice 84% Portfolio management services 47% None of the above 3% Others 3% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 56 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011
    • 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 – July 22nd to August 04th, 2011
    • 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 , J.P. Morgan Tower, Off C.S.T Road, Kalina, Santacruz (East), Mumbai 400 098 , India. Tel: 022 – 6157 3000 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011