J.P. Morgan Asset Management – ValueNotesInvestment Confidence Index – Wave VIII, July 2011          …India‟s only Investo...
J.P. Morgan Asset Management Standard Template 2009.ppt                 J.P. Morgan Asset Management – ValueNotes Investme...
J.P. Morgan Asset Management Standard Template 2009.ppt                Background                        The inaugural In...
J.P. Morgan Asset Management Standard Template 2009.ppt                J.P. Morgan Asset Management – ValueNotes          ...
J.P. Morgan Asset Management Standard Template 2009.ppt                Quarterly indices tracking sentiment across the inv...
J.P. Morgan Asset Management Standard Template 2009.ppt                Survey Methodology: face to face, online and teleph...
J.P. Morgan Asset Management Standard Template 2009.ppt                Index Construction Methodology                Indic...
J.P. Morgan Asset Management Standard Template 2009.ppt                Respondent Sample – Wave VIII, July 2011           ...
Investor and Advisor Confidence, Wave VIII, July 2011- Key Findings                                                       ...
J.P. Morgan Asset Management Standard Template 2009.ppt                Investment Confidence Index (ICI) touches its lowes...
J.P. Morgan Asset Management Standard Template 2009.ppt                Corporates most sceptical of the lot               ...
J.P. Morgan Asset Management Standard Template 2009.ppt                 Domestic and global economic woes dent confidence ...
J.P. Morgan Asset Management Standard Template 2009.ppt                Advisor sentiment shaken across all categories; Ban...
J.P. Morgan Asset Management Standard Template 2009.ppt                 Advisors hopeful that clients’ investments will ap...
J.P. Morgan Asset Management Standard Template 2009.ppt                Investment activity in Mutual funds jumps significa...
J.P. Morgan Asset Management Standard Template 2009.ppt                Delhi/ NCR investors buck the trend; most confident...
J.P. Morgan Asset Management Standard Template 2009.ppt                Confidence revives among older investors           ...
J.P. Morgan Asset Management Standard Template 2009.ppt                 Banking and Financial Services a popular sector fo...
J.P. Morgan Asset Management Standard Template 2009.ppt                Current investor strategy – Be cautious            ...
J.P. Morgan Asset Management Standard Template 2009.ppt                Corporate activity in Mutual Funds takes a drubbing...
J.P. Morgan Asset Management Standard Template 2009.ppt                MMFs still preferred while FMPs lose favour        ...
J.P. Morgan Asset Management Standard Template 2009.ppt                 Corporates likely to maintain current investment l...
J.P. Morgan Asset Management Standard Template 2009.ppt                 Majority advisors consider ‘3 – 5 years’ as long-t...
J.P. Morgan Asset Management Standard Template 2009.ppt                 Financial community expects higher ROI from equity...
Other sentiment drivers- Sensex, economic signals, expectations on income                                                 ...
J.P. Morgan Asset Management Standard Template 2009.ppt                 Sensex likely to trade between 19,000 – 21,000 in ...
J.P. Morgan Asset Management Standard Template 2009.ppt                 GDP growth – Most positive economic booster       ...
J.P. Morgan Asset Management Standard Template 2009.ppt                 GDP growth holds traction through the year        ...
J.P. Morgan Asset Management Standard Template 2009.ppt                 Inflation and corruption create jitters within the...
J.P. Morgan Asset Management Standard Template 2009.ppt                 Inflationary woes mount over the year             ...
J.P. Morgan Asset Management Standard Template 2009.ppt                 Corporates upbeat about increase in profits       ...
Key investment influencers- International markets, information sources, expected retirement age, advisoryservices, capital...
J.P. Morgan Asset Management Standard Template 2009.ppt                 Advisors favour international markets; Retail inve...
J.P. Morgan Asset Management Standard Template 2009.ppt                 Advisors recommend Emerging Markets; Retail invest...
JP Morgan -ValueNotes  Investment Confidence Index Wave 8, July 2011
JP Morgan -ValueNotes  Investment Confidence Index Wave 8, July 2011
JP Morgan -ValueNotes  Investment Confidence Index Wave 8, July 2011
JP Morgan -ValueNotes  Investment Confidence Index Wave 8, July 2011
JP Morgan -ValueNotes  Investment Confidence Index Wave 8, July 2011
JP Morgan -ValueNotes  Investment Confidence Index Wave 8, July 2011
JP Morgan -ValueNotes  Investment Confidence Index Wave 8, July 2011
JP Morgan -ValueNotes  Investment Confidence Index Wave 8, July 2011
JP Morgan -ValueNotes  Investment Confidence Index Wave 8, July 2011
JP Morgan -ValueNotes  Investment Confidence Index Wave 8, July 2011
JP Morgan -ValueNotes  Investment Confidence Index Wave 8, July 2011
JP Morgan -ValueNotes  Investment Confidence Index Wave 8, July 2011
JP Morgan -ValueNotes  Investment Confidence Index Wave 8, July 2011
JP Morgan -ValueNotes  Investment Confidence Index Wave 8, July 2011
JP Morgan -ValueNotes  Investment Confidence Index Wave 8, July 2011
JP Morgan -ValueNotes  Investment Confidence Index Wave 8, July 2011
JP Morgan -ValueNotes  Investment Confidence Index Wave 8, July 2011
JP Morgan -ValueNotes  Investment Confidence Index Wave 8, July 2011
JP Morgan -ValueNotes  Investment Confidence Index Wave 8, July 2011
JP Morgan -ValueNotes  Investment Confidence Index Wave 8, July 2011
JP Morgan -ValueNotes  Investment Confidence Index Wave 8, July 2011
JP Morgan -ValueNotes  Investment Confidence Index Wave 8, July 2011
JP Morgan -ValueNotes  Investment Confidence Index Wave 8, July 2011
JP Morgan -ValueNotes  Investment Confidence Index Wave 8, July 2011
JP Morgan -ValueNotes  Investment Confidence Index Wave 8, July 2011
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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 environment.

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

  1. 1. 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
  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 – July 22nd to August 04th, 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 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
  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 – July 22nd to August 04th, 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 – July 22nd to August 04th, 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 – July 22nd to August 04th, 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 – July 22nd to August 04th, 2011
  8. 8. 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
  9. 9. 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
  10. 10. 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
  11. 11. 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
  12. 12. 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
  13. 13. 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
  14. 14. 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
  15. 15. 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
  16. 16. 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
  17. 17. 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
  18. 18. 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
  19. 19. 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
  20. 20. 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
  21. 21. 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
  22. 22. 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
  23. 23. 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
  24. 24. 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
  25. 25. 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
  26. 26. 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
  27. 27. 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
  28. 28. 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
  29. 29. 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
  30. 30. 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
  31. 31. 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
  32. 32. 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
  33. 33. 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
  34. 34. 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

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