JPMorgan - ValueNotes Investor Confidence Index Wave VII, March 2010

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JPMorgan - ValueNotes Investor Confidence Index Wave VII, March 2010

  1. 1. J.P. Morgan Asset Management – ValueNotesInvestment Confidence Index – Wave VII, March 2011 …India‟s only Investor and Advisor focused sentiment indicator J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – March 15th to March 29th, 2011
  2. 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 – March 15th to March 29th, 2011
  3. 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 18th wave (4Q 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 – March 15th to March 29th, 2011
  4. 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 – March 15th to March 29th, 2011
  5. 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 – March 15th to March 29th, 2011
  6. 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 – March 15th to March 29th, 2011
  7. 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 – March 15th to March 29th, 2011
  8. 8. J.P. Morgan Asset Management Standard Template 2009.ppt Respondent Sample – Wave VII, March 2011  84.9% 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 1,630 50 244 20 20 City Delhi / NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad Retail 12% 14% 12% 12% 12% 13% 12% 13% IFAs 14% 13% 12% 12% 12% 12% 13% 12% Corporate 24% 36% 10% 4% 10% 12% 2% 2% Wallet Size 2 to 5 lakhs 5 to 10 lakhs 10 to 25 lakhs 25 to 50 lakhs 50 lakhs + (INR) Retail 27% 32% 22% 11% 8% Treasury size 10 lakhs to 1 1 crore to 50 50 to 150 150 to 500 500 crores + (INR) crore crores crores crores Corporate 10% 12% 10% 12% 56% 7 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – March 15th to March 29th, 2011
  9. 9. Investor and Advisor Confidence, Wave VII, March 2011- Key Findings 8 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – March 15th to March 29th, 2011
  10. 10. J.P. Morgan Asset Management Standard Template 2009.ppt Investment Confidence Index (ICI) slumps to an all-time low  Investment Confidence Index stands at 132.3 in March 2011, down 14 points from last quarter  Touches lowest level since inception in July 2009 Investment Confidence Index 135.9 Jul 2009 146.4 Sep 2009 141.2 Feb 2010 140.4 Jun 2010 145.4 Sep 2010 146.3 Dec 2010 132.3 Mar 2011 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 – March 15th to March 29th, 2011
  11. 11. J.P. Morgan Asset Management Standard Template 2009.ppt India Inc. turns cautious  Confidence dips across all investor categories; retail investor takes the biggest beating of 17.5 points Retail vs. Corporate vs. Advisors Neutral 138.3 145.1 147.1 Retail 151.7 Jul 2009 160.1 159.5 Sep 2009 142.0 133.5 Feb 2010 142.5 130.7 Jun 2010 Corporate 134.0 131.8 Sep 2010 132.2 Dec 2010 Corporate confidence lowest in March 2011 123.5 136.0 Mar 2011 151.7 145.9 Advisor 135.4 144.1 147.2 131.5 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 – March 15th to March 29th, 2011
  12. 12. J.P. Morgan Asset Management Standard Template 2009.ppt Advisors gung-ho on clients’ increasing investments  Retail investors (146) seem more optimistic than corporates (130) and advisors (129) about the Indian economy  Corporate investors (107) and advisors (110) don‟t expect an improvement in the global economic environment Neutral 149 Improvement in Indian 130 economic situation 129 142 Improvement in investment market 116 environment and atmosphere Retail 123 133 Improvement in global 107 Corporate economic environment 110 141 Advisor Increase in BSE Sensex 117 132 142 Appreciation in 135 investment portfolio 138 144 Change in amount 136 of investments 157 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 – March 15th to March 29th, 2011
  13. 13. J.P. Morgan Asset Management Standard Template 2009.ppt Confidence plunges across all categories of advisors  N/RDs hit an all-time low with a confidence level of 125.8 points, fall 21.4 points IFAs vs. Banks vs. N/RDs Neutral 134.9 150.2 145.7 IFA 139.7 156.9 146.9 Jul 2009 139.0 Sep 2009 137.9 Feb 2010 157.5 149.6 Jun 2010 Banks 139.6 135.0 Sep 2010 147.5 Dec 2010 129.6 Mar 2011 135.0 147.2 142.5 N/RDs 126.9 140.4 147.2 125.8 0 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 – March 15th to March 29th, 2011
  14. 14. J.P. Morgan Asset Management Standard Template 2009.ppt Advisors still hopeful that clients will increase investments  N/RDs (165) and IFAs (164) expect higher client inflows than Banks (143) Improvement in Indian economic situation 137 130 120 Improvement in investment market 138 118 IFA environment and atmosphere 113 Improvement in global 116 115 economic environment 100 Banks 137 Increase in BSE Sensex 135 123 Appreciation in 142 N/RDs 138 investment portfolio 135 Change in amount 164 143 of investments 165 139 Advisor Confidence Index 130 126 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 – March 15th to March 29th, 2011
  15. 15. J.P. Morgan Asset Management Standard Template 2009.ppt Corporate confidence from the Retail & Hospitality sector slumps  Confidence among corporates in the manufacturing sector on the rise (130) while among the retail investors it slips 10 points this quarter  Corporate confidence from the BFSI and Services sectors has been on the decline since June „10 200 Retail confidence (Jun 2010) -152 Retail confidence (Sep 2010) -160 Retail (Jun 2010) Retail (Sep 2010) Retail confidence (Dec 2010) -160 Retail confidence (Mar 2011) - 142 Retail (Dec 2010) Retail (Mar 2011) 163 163 163 159 161 160 161 161 152 159 155 161 162 159 159 156 160 150 149 149 145 139 143 145 140 137 147 137 132 120 80 IT/BPO/Outsourcing Realty & Infrastructure Manufacturing Retail & Hospitality Medical/BioTech. BFSI Services 200 Corporate confidence (Jun 2010) -134 Corporate confidence (Sep 2010) -132 Corporate (Jun 2010) Corporate (Sep 2010) Corporate confidence (Dec 2010) -132 Corporate confidence (Mar 2011) -124 Corporate (Dec 2010) Corporate (Mar 2011) 167 154 157 153 160 150 146 149 146 136 142 138 142 138 135 128 127 123 122 126 130 120 127 122 119 114 117 120 108 96 80 IT/BPO/Outsourcing Realty & Infrastructure Manufacturing Retail & Hospitality Medical/BioTech. BFSI Services 14 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – March 15th to March 29th, 2011
  16. 16. J.P. Morgan Asset Management Standard Template 2009.ppt Confidence falls in all cities; IFAs from Chennai and Hyderabad only exceptions  Chennai investors (152) and IFAs (159) most confident  Retail confidence in Pune takes the biggest plunge of 40 points in March 2011, keeping the investors wary 200 Retail Confidence (Jun 2010) -152 Retail Confidence (Sep 2010) -160 Retail (Jun 2010) Retail (Sep 2010) Retail Confidence (Dec 2010) -160 Retail Confidence (Mar 2011) - 142 Retail (Dec 2010) Retail (Mar 2011) 165 169 162 176 163 177 168 156 159 151 163 165 159 156 152 160 160 153 149 151 149 152 147 147 147 152 150 144 136 130 133 135 129 120 80 Delhi / NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad 200 IFA Confidence (Jun 2010) - 134 IFA confidence (Sep 2010) - 139 IFA (Jun 2010) IFA (Sep 2010) IFA Confidence (Dec 2010) -132 IFA confidence (Mar 2011) - 124 IFA (Dec 2010) IFA (Mar 2011) 166 162 159 156 154 158 152 157 152 156 160 143 150 145 146 144 150 146 146 150 142 146 139 137 134 139 138 136 130 131 135 133 126 120 80 Delhi / NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad 15 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – March 15th to March 29th, 2011
  17. 17. J.P. Morgan Asset Management Standard Template 2009.ppt Uncertainty looms large among older investors  Investors aged 60 to 65 record lowest confidence ever (124) while investors aged 55 to 60 years see the sharpest decline of 26 points over December 2010  Middle aged investors (40 – 45 years) are most confident at 149 points 170 Retail Confidence (Jun 2010) - 152 Retail Confidence (Sep 2010) - 160 Retail Confidence (Dec 2010) -160 Retail Confidence (Mar 2011) - 142 Jun 2010 Sep 2010 Dec 2010 Mar 2011 161 162 164 161 160 161 159 159160 160 160 159 157 157 158 156 157 155 154 154 153 155 153151 149 150 147 143 143 140 142 141 140 138 140 136 132 130 125 124 120 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 – March 15th to March 29th, 2011
  18. 18. J.P. Morgan Asset Management Standard Template 2009.ppt Wallet-size does not appear to influence confidence  Retail investors of all wallet sizes continue to exhibit similar confidence levels ranging between 138 and 144 after sentiment drops from December 2010 levels for all  Smaller Investors (INR 2 to 5 lakhs) slump the most and to the lowest to stand at 138 points Retail Confidence (Jun 2010) - 152 Retail Confidence (Sep 2010) -160 Jun 2010 Sep 2010 180 Retail Confidence (Dec 2010) -160 Retail Confidence (Mar 2011) - 142 Dec 2010 Mar 2011 161 162 162 161 162 159 158 160 160 159 160 154 152 153 151 148 146 142 144 144 140 138 120 100 INR 2 to 5 lakhs INR 5 to 10 lakhs INR 10 to 25 lakhs INR 25 to 50 lakhs INR 50 lakhs and above 17 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – March 15th to March 29th, 2011
  19. 19. J.P. Morgan Asset Management Standard Template 2009.ppt Fewer investors expect both – more income and additional investments  Investors this quarter are less confident about their income increasing as well as increase in their investments (58%), down by 11 percentage points as compared to December 2010 4 Increase / Decrease in amount of Increase 3% 3% Jun 2010 1% 1% 10% 8% 11% 15% 64% 74% 69% 58% investments 2 Sep 2010 Same 2% 2% 1% 1% 9% 7% 7% 11% 8% 7% 10% 10% Dec 2010 1 Decrease Mar 2011 2% 1% 1% 1% 1% 1% 0% 1% 1% 0% 1% 0% 0 0 Unlikely to increase 1 Remain the same 2 Likely to increase 4 Increase / Decrease in personal income 18 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – March 15th to March 29th, 2011
  20. 20. J.P. Morgan Asset Management Standard Template 2009.ppt Investment activity across key instruments slides further  Instruments with most activity such as savings account, insurance, stocks and gold witness a significant drop this quarter compared to June 2010 levels  Time deposits (36%) and mutual funds (48%) take a beating of 18 and 27 percentage points, respectively Retail investment activity in the past 12 months 100% 97% 92% 95% Jun 2010 Sep 2010 86% 83% Dec 2010 Mar 2011 80% 69% 65% 60% 52% 54% 56% 56% 50% 45% 36% 35% 35% 36% 36% 40% 26% 21% 20% 6% 5% 7% 8% 0% Savings account Time deposit Insurance and Retirement Property Gold and other bullion Foreign currencies products 100% 80% 75% 76% 75% 68% 66% 59% 60% 60% 48% 40% 24% 18% 23% 18% 18% 20% 13% 12%13% 15% 12% 12% 13% 5% 3% 4% 2% 3% 1% 2% 1% 0% Stocks Mutual Funds Bonds Certificate of Warrants Derivatives* Others deposits * Other stock market derivative products (e.g. futures, options) 19 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – March 15th to March 29th, 2011
  21. 21. J.P. Morgan Asset Management Standard Template 2009.ppt Investor strategy – Currently conservative, aggressive in the future  Current investment strategy for most retail investors is to preserve capital (39%) and to maintain a cautious outlook towards their investments (29%)  Investors expected to turn more aggressive (57%) with their investment strategies in the next six months Current investment strategy Investment strategy in coming 6 months 8% 1% 15% 14% 17% Risk Averse Extremely aggressive 34% Somewhat aggressive Preserve Capital No change Cautious Investments Somewhat conservative 39% Willing to take risks 29% 43% Extremely conservative 20 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – March 15th to March 29th, 2011
  22. 22. J.P. Morgan Asset Management Standard Template 2009.ppt Corporate activity in Term deposits witnesses a steady increase  Investment activity in debt mutual funds shows a marginal increase (2 percentage points) after its slide in September and December 2010  Investment activity in bonds (48%) drops 11 percentage points after a spike in the last quarter Corporate investment activity in the past 12 months 100% 94% Jun 2010 Sep 2010 100% 90% 92% Dec 2010 Mar 2011 80% 74% 67% 60% 56% 60% 47% 44% 43% 45% 46% 32% 35% 32% 37% 38% 35% 40% 31% 30% 29% 26% 24% 20% 0% Term deposits Inter-corporate deposits Commercial Papers Debt Mutual Funds Equity Mutual Funds Stocks 100% 80% 59% 60% 48% 45% 35% 30% 37% 38% 40% 28% 24% 16% 25% 20% 15% 8% 8% 6% 10% 10% 14% 6% 8% 4% 0% 0% 2% 0% Bonds Certificate of deposits Warrants Derivatives* Structured products Others * Other stock market derivative products (e.g. futures, options) 21 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – March 15th to March 29th, 2011
  23. 23. J.P. Morgan Asset Management Standard Template 2009.ppt MMFs find favour with treasuries again  Fixed Maturity Plans (60%) down 9 percentage points this quarter after a steady increase in the previous 9 months  Money Market Funds (86%) bounce back this quarter to become the most preferred Debt mutual fund among corporate treasuries Corporate investments in debt mutual funds in the past 12 months 100% Jun 2010 Sep 2010 Dec 2010 Mar 2011 90% 87% 88% 86% 80% 67% 69% 70% 60% 60% 54% 50% 46% 39% 40% 40% 35% 33% 32% 31% 33% 34% 32% 30% 25% 20% 20% 13% 12% 12% 10% 0% 0% 0% Bond funds Money Market Fixed Maturity Floating Rate GILT funds Others Funds Plans Debt Funds 22 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – March 15th to March 29th, 2011
  24. 24. J.P. Morgan Asset Management Standard Template 2009.ppt Majority advisors think long term is ‘3 – 5 years’  Long term investments for corporates is a shorter time span compared to advisors and retail investors; 28% interpret 2 – 3 years and 24% interpret 1 – 2 years  Advisors (65%) and retail investors (32%) interpret long term investment period to be between 3 and 5 years 70% 65% Retail Corporate Advisor 60% 50% 40% 32% 30% 28% 28% 24% 24% 20% 17% 18% 13% 14% 12% 10% 6% 1% 4% 4% 2% 2% 3% 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 23 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – March 15th to March 29th, 2011
  25. 25. J.P. Morgan Asset Management Standard Template 2009.ppt Financial community unanimous on expected ROI from equity funds  A majority of advisors and corporates (50% each) expect an annual return of 10 – 15% from equity funds with an investment horizon of more than three years  A sizeable percentage of retail investors (31%) are conservative expecting a return of 5 – 10% 70% Retail Corporate Advisor 60% 50% 50% 50% 40% 37% 35% 31% 30% 18% 20% 20% 16% 11% 10% 8% 6% 7% 2% 4% 3% 2% 0% 0% 0% 0 - 5% 5 - 10% 10 - 15% 15 - 20% Above 20% Cant Say 24 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – March 15th to March 29th, 2011
  26. 26. Other sentiment drivers- Sensex, economic signals, union budget, expectations on income 25 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – March 15th to March 29th, 2011
  27. 27. J.P. Morgan Asset Management Standard Template 2009.ppt Sensex to hover between 19,000 – 20,000 in Sep’ 2011  Retail investors (28%) and advisors (42%) suggest that the Sensex will trade marginally higher between 19,000 – 20,000 in September 2011  Advisors (37%) and retail investors (26%) were highly optimistic about the Sensex levels in March 2011 suggesting it will trade between 20,000 – 21,000 while it traded between 17,800 – 19,200 Advisors more confident of BSE Sensex trading at higher levels in September 2011 45% BSE Sensex Retail Advisor 42% during the 35% Survey 28% 22% 25% 19% 15% 10% 9% 16% 2% 4% 15% 4% 5% 3% 8% 2% 2% 0% 0% 3% 0% 3% 0% 0% 0% -5% 0% 14,000- 15,000- 16,000- 17,000- 18,000- 19,000- 20,000- 21,000- 22,000- 23,000- 24,000- 25,000- 15,000 16,000 17,000 18,000 19,000 20,000 21,000 22,000 23,000 24,000 25,000 26,000 Retail investors and advisors optimistic of BSE Sensex levels in March 2011 BSE Sensex 37% Retail Advisor 35% during the Survey 25% 21% 23% 26% 24% 17% 15% BSE 8% 3% 4% 5% Sensex in 3% 5% 2% 6% 1% 1% 2% 6% 1% 2% 4% Sep 2010 0% 0% 0% 0% -5% 16,000- 17,000- 18,000- 19,000- 20,000- 21,000- 22,000- 23,000- 24,000- 25,000- 26,000- 27,000& 17,000 18,000 19,000 20,000 21,000 22,000 23,000 24,000 25,000 26,000 27,000 Above 26 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – March 15th to March 29th, 2011
  28. 28. J.P. Morgan Asset Management Standard Template 2009.ppt GDP Growth a catalyst to the Indian economy  Corporates (46%) most positive on GDP growth compared to retail investors (25%) and advisors (26%)  Corporates (22%) consider increase in Industrial output as the second-most positive indicator while their outlook on corporate profitability is the lowest (4%) among the three categories 60% Retail Corporate Advisors 50% 46% 40% 30% 25% 26% 24% 21% 22% 20% 19% 15% 12% 13% 13% 9% 10% 10% 8% 7% 6% 4% 4% 5% 4% 2% 3% 1% 2% 0% Resurgence in GDP growth RBI‟s continued Governments fiscal Increase in Increased credit Increase in Others corporate profits meeting/exceeding monetary measures employment offtake from the Industrial output / expectations measures opportunities private sector Exports 27 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – March 15th to March 29th, 2011
  29. 29. J.P. Morgan Asset Management Standard Template 2009.ppt GDP growth remains the most +ve indicator through the year  RBI‟s monetary measures (21%) sees a revival among advisors after a gradual decline in the previous nine months March 2011 December 2010 60% 60% 53% 49% Retail 46% Corporate 40% 40% Advisors 24% 25% 26% 21% 19% 19% 20% 17% 20% 15% 12% 20% 12% 14% 4% 6% 6% 0% 0% Resurgence in GDP growth RBI‟s continued Resurgence in GDP growth RBI‟s continued corporate profits meeting/exceeding monetary measures corporate profits meeting/exceeding monetary measures expectations expectations September 2010 June 2010 60% 60% Retail 46% Corporate 41% 40% 34% 37% 40% Advisors 25% 29% 25% 14% 11% 16% 13% 16% 20% 15% 13% 17% 20% 8% 9% 7% 0% 0% Resurgence in GDP growth RBI‟s continued Resurgence in GDP growth RBI‟s continued corporate profits meeting/exceeding monetary measures corporate profits meeting/exceeding monetary measures expectations expectations 28 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – March 15th to March 29th, 2011
  30. 30. J.P. Morgan Asset Management Standard Template 2009.ppt Inflation woes continue to grip corporates and advisors  A substantial percentage of corporates (70%) and advisors (60%) are wary of inflation this quarter  Retail investors cite both inflation (26%) and corruption (22%) as a cause of concern 80% 70% Retail Corporate Advisors 70% 60% 60% 50% 40% 30% 26% 22% 22% 20% 16% 17% 12% 8% 8% 8% 10% 6% 5% 5% 4% 6% 4% 0% 0% 0% 1% 1% 0% 1% 0% Inflation Impact of changing Increased Corruption Middle East High govt General downward Others climate globally protectionism in political crisis borrowings / high trend in the stock developed fiscal deficit market economies 29 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – March 15th to March 29th, 2011
  31. 31. J.P. Morgan Asset Management Standard Template 2009.ppt Financial community anxious about inflation  Fear of global economic and political factors affecting the growth of the Indian economy has subdued over the year among the financial community March 2011 December 2010 80% 70% 80% Retail 60% 63% Corporate 60% 60% 48% Advisors 40% 40% 28% 26% 22% 22% 19% 19% 12% 13% 16% 20% 8% 20% 8% 8% 5% 4% 0% 0% Middle East political Inflation Corruption Fear of global economic Inflation Corruption crisis instability September 2010 June 2010 80% 80% Retail Corporate 60% 60% 48% Advisors 40% 35% 40% 40% 36% 40% 29% 26% 30% 26% 30% 20% 16% 20% 15% 20% 14% 7% 6% 7% 8% 0% 0% Fear of resurgence of Inflation High govt borrowings / Impact of Eurozone Inflation High govt borrowings / US / global recession high fiscal deficit Debt crisis high fiscal deficit 30 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – March 15th to March 29th, 2011
  32. 32. J.P. Morgan Asset Management Standard Template 2009.ppt Union Budget FY 2011-12 satisfactory – India Inc.  Retail investors (56%) most satisfied with 9% of respondents indicate they are “very satisfied” with the Union Budget  Among corporates and advisors a higher percentage, 42% and 54% respectively, are neutral 100% 0% 1% 9% 38% 34% Very Satisfied 80% 47% Satisfied 60% Neutral 40% 42% 54% Dissatisfied 34% 20% 16% Very Dissatisfied 8% 7% 2% 4% 3% 0% Retail Corporate Advisor 31 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – March 15th to March 29th, 2011
  33. 33. J.P. Morgan Asset Management Standard Template 2009.ppt Retail investors happy about paying lesser tax  Advisors (26%) are joyous about the reduction in corporate tax surcharge while corporates (38%) feel that the unaltered central excise duty and service tax is the most important.  A reasonable percentage of retail investors (10%), corporates (12%) and advisors (18%) suggest that the Five fold strategy against black money is an important part of the union budget 60% Retail Corporate Advisor 40% 38% 26% 26% 21% 20% 21% 20% 17% 18% 18% 12% 11% 12% 10% 10% 10% 6% 7% 7% 4% 4% 1% 0% Tax exemption limit Extension of Tax Reduction in Increase in the Five Fold Strategy Central excise duty Others raised saving infrastructure corporate tax number of services against black money and service tax bonds surcharge falling under service remain unchanged tax 32 J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – March 15th to March 29th, 2011

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