8th wave of Investment Confidence Index – by J.P. Morgan Asset Management in association with ValueNotes
– The Investment Confidence Index (ICI) has weakened 8.5 points from the last quarter and the score has touched its lowest (123.8) since its inception in August 2009
– Mounting inflationary pressure along with poor governance and corruption have been voted as the biggest negatives for the Indian economy
13 Sept 2011: JPMorgan Asset Management India Pvt. Ltd. (JPMAMIPL) in association with ValueNotes announced the findings of their eighth wave of the Investment Confidence Index (ICI) in India. The J.P. Morgan Asset Management – ValueNotes Investment Confidence Index (ICI), which was launched in August 2009, is published on a quarterly basis. ICI captures the confidence of the retail and corporate investor sector as well as financial advisors on the Indian economic and investment environment.
Investment sentiment appears affected by prevailing macro-economic factors such as recessionary conditions across global markets, frequent hikes in interest rates and volatility in the domestic investment environment.
However, the survey results also reveal that the Indian financial fraternity maintains a positive outlook with 44% of investors and advisors expecting the benchmark index to trade between 20,000 and 22,000 by the end of this year.
Investment activity of retail investors in mutual funds has revived significantly (11 percentage points) since the last quarter. India Inc. and retail investors both continue to maintain a positive outlook towards an increase in corporate profits and personal income respectively, while the advisor community continues to be upbeat about an increase in clients’ investments.
It is also interesting to note that, while retail confidence across all cities hovers below 150, Delhi/ NCR emerges as an outlier displaying highest confidence (158).
ValueNotes, an independent market research company, was commissioned by J.P. Morgan Asset Management to conduct the survey. The ICI was developed by interviewing a random sample of retail investors (with a wallet size in excess of INR 200,000), corporate investors and financial advisors. The survey took place in July 2011 in eight cities across India: Mumbai, Delhi/NCR, Kolkata, Chennai, Ahmedabad, Bengaluru, Pune and Hyderabad.
The key objective of the ICI is to quantify confidence in the investment environment among investors and advisors. The survey also attempts to study investment behaviour and sentiment based on key factors such as the improvement in the Indian and global economic environment, general investment atmosphere, expectation of growth in investment portfolios and others. Additionally, ICI analyses the short term and long term changes in investment behaviour and outlook every quarter, from an investor and advisor standpoint.
The J.P. Morgan Asset Management – Valuenotes ICI score is derived from responses to the following questions posed to all target segments:
Responses to these 6 questions also form the basis for arriving at the Retail Investor Confidence Index, Corporate Confidence Index and the Advisor Confidence Index which are sub-indices of the Investment Confidence Index. At any given point, the indices can move from ‘0’ to ‘200’, with ‘0’ depicting the most negative outlook; ‘200’ depicting full and absolute confidence and ‘100’ showing a neutral position.
Mr. Christopher Spelman, Whole time Director and Chief Executive Officer of J.P. Morgan Asset Management said, “ICI for the current wave has been impacted by a significant fall in the outlook on the global economy, domestic interest rate hikes and inflationary concerns. Despite this negative news flow, the Indian financial fraternity maintains a positive outlook with a majority of investors and advisors expecting the benchmark index to trade between 20,000 and 22,000 by the end of this year. Another interesting finding is that young investors (age 22 to 25 years) appear highly enthusiastic about investing in mutual funds.”
Mr. Arun Jethmalani, Managing Director, ValueNotes commented, “Growing vulnerability of the global economy and uncertainty in the domestic investment environment have taken a toll on investment confidence, dragging the ICI down to its lowest ever. Interestingly, confidence within India Inc. appears to be shaken the most, amidst rising inflationary pressure, poor governance and corruption; even as the advisor community is a little more optimistic about financial investments.”
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Notes to Editors
About J.P. Morgan Asset Management
J.P. Morgan Asset Management is the brand name of J.P. Morgan Chase & Co’s asset management companies. J.P. Morgan Asset Management is a global asset management leader providing world-class investment solutions to clients. WithUS$1.298 trillion* in assets under management (as at 31 December 2010) and offices in 40 locations around the world, J.P. Morgan Asset Management offers global coverage with a strong local market presence, and leadership positions in most asset classes.
Commitment to India: JPMorgan Asset Management India Private Limited is the Indian arm of J.P. Morgan Asset Management. It commenced its mutual fund business in India in April 2007, initially establishing its head office in Mumbai and subsequently opening satellite offices in Delhi, Kolkata, Chennai, Ahmedabad, Pune and Bengaluru. The firm distributes its funds through a network of banks, independent financial advisers and national distributors and currently has caters to investors in 141 cities across the country.
The firm is still in its infancy but has a very clear agenda of bringing the inherent strengths of J.P. Morgan Asset Management into the country, namely:
J.P. Morgan Asset Management manages assets on behalf of a broad range of retail and institutional investors in India. It continues to expand its product range to meet the needs of its diverse client base, using the resources and expertise available from its global network.
*Note: Includes Investment Management and Private Banking
ValueNotes is a leading provider of business intelligence and research, with expertise across industries, particularly in financial services, media, engineering, healthcare, IT and the outsourcing industry. It operates at multiple points of the knowledge value chain to provide bespoke competitive intelligence, research, analytics, knowledge management and intelligence to a wide variety of users. ValueNotes’ customers include some of the leading global corporations, asset and wealth managers, management consulting firms, research publishers, PE and VC firms.
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