– Investor sentiment weakens across all wallet sizes and age groups
– FAs in Mumbai (106) continue to be the most sceptical, while Delhi/NCR IFAs (139)
are the most confident

– Retail investment activity in mutual funds inches up
– Investors and advisors bullish about the Sensex trading levels in June 2012
– Majority of retail investors in Pune and Mumbai expect the Sensex to rebound from its current level and trade above 18,000 in June 2012


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January 2012: JPMorgan Asset Management India Pvt. Ltd. (JPMAMIPL) in association with ValueNotes announced the findings of the ninth 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.


The ebbing Investment Confidence Index (125) showed no signs of revival in the current quarter and remained almost flat between July 2011 and December 2011. After witnessing a series of highs and lows over five quarters, the ICI has declined continuously over the past year.


Although the overall investment sentiment currently appears subdued, the optimism about global and Indian economic growth is improving marginally. Most interestingly, corporate, advisors and HNIs are now more optimistic than they were in July 2011, even as the mass of retail investors have become more pessimistic.


The survey findings indicate that retail investor confidence has faded in the last few months. Investor confidence (132) faltered 28 points since September 2010 (160) reaching its all time low. India Inc. (115) and the advisor community (127) are marginally more optimistic compared to their July 2011 lows. Among the three advisor categories, bank confidence (133) recovered by 18 points from July 2011, while IFA confidence (119) plummeted 17 points to touch its lowest.


ValueNotes, an independent market research company, was commissioned by J.P. Morgan Asset Management to conduct the survey. The ICI was developed by interviewing 1,635 retail, 50 corporate treasuries and 282 advisors. The survey took place in November 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:


  1. The likelihood of the Indian economic situation improving from current levels in the next six months.
  2. The likelihood of an improvement in the general investment market environment and atmosphere from current levels in the coming six months.
  3. The possibility of the global economic environment improving from current levels in the coming six months.
  4. The likelihood of the BSE Sensex increasing in the next six months.
  5. The prospect of your / your clients’ investment portfolio appreciating in the coming six months.
  6. Expected increase or decrease in the amount of investment and/or increase in mutual fund inflows in the coming six months.


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. Nandkumar Surti, Managing Director and Chief Executive Officer of J.P. Morgan Asset Management said, “The weak investment sentiment is probably a reflection of volatility surrounding the country’s macroeconomic environment. The Sensex downslide, Rupee depreciation, a ballooning fiscal deficit, high inflation rates, combined with rising global uncertainty triggered by deepening of the Eurozone crisis have hurt investment sentiment. However, the optimism about global and Indian economic growth is improving marginally. Retail investment activity in mutual funds has picked up 9 percentage points from last quarter too.”


Mr. Arun Jethmalani, Managing Director, ValueNotes commented, “Inflation and global uncertainty have pulled the investment sentiment down. Survey findings indicate that inflation concerns have dropped significantly among corporates and advisors, possibly because of reports about stabilisation of inflation rates. Although sentiment surrounding the Indian economic situation and investment environment has improved since the last quarter, it is still weak in comparison to last year’s readings.”


Key findings:

  • The investment sentiment of investors with smaller wallet sizes (INR 2 to 5 lakhs) has fallen the most, while it has improved among HNIs.


  • Retail investors in Hyderabad (152) are relatively more upbeat than their counterparts across the other seven cities. Ahmedabad investors (110) were the least optimistic.


  • IFAs in Mumbai (106) continue to be the most sceptical, while Delhi/NCR IFAs (139) are the most confident.


  • Indian investors and advisors appear unaffected by the recent volatility in stock markets. 48% of retail investors and 76% of advisors expect the benchmark Index to trade between 17,000 and 20,000 in June 2012.


  • Confidence within young investors (age 22-25 years) has witnessed a 36-point fall since last year.


  • Inflation and global uncertainty have been voted as the two most negative economic indicators. However, inflation concerns have dropped significantly among corporates and advisors, possibly because of reports about stabilisation of inflation rates.


  • Majority of retail investors in Pune and Mumbai expect the Sensex to rebound from its current level and trade above 18,000 in June 2012.


  • Indian investors and advisors were an optimistic lot in July 2011. 67% of them expected the Sensex to trade between 19,000 and 20,000 in December 2011.


  • Retail investment activity in mutual funds has picked up 9 percentage points from last quarter to reach 70%, while in stocks it fell 6 percentage points. With falling markets, risk-averse investors show lesser preference for stocks (from 70% to 56%) but increased preference for mutual funds (from 44% to 68%) since March 2011.


  • Rising gold prices appear to have affected investment activity in gold. As a result, percentage of investors investing in this asset class has fallen 19 percentage points since December 2010.


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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:

  • Excellence and continuity in investment management
  • A comprehensive and competitive range of products
  • Strong systems and processes
  • Exceptional risk management and controls

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

About ValueNotes

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.

ValueNotes products and services are made available by different Business Units.

  • Custom Research: Provides a wide range of bespoke services in the areas of business and financial research & analysis. Assessing market opportunities, quantifying customer / brand / investor perception, facilitating entry into Indian markets, enabling competitive intelligence, providing dedicated research support teams and providing research-enabled written content are among the key services provided.
  • IndiaNotes.com (formerly ValueNotes.com):  Is a search engine and financial portal that aggregates research, news, information and independent third-party articles/analyses, primarily about Indian financial and equity markets.
  • Sourcing Practice: Publishes proprietary market intelligence on the (services) outsourcing industry, with an emphasis on knowledge services or KPO. It has dedicated research practices for legal, publishing, education and research & analytics.

Risk Factors: Mutual funds and securities investments are subject to market risks and there is no assurance or guarantee against loss in the Scheme or that the Scheme’s objectives will be achieved. As with any investment in securities, the NAV of the Units issued under the Scheme can go up or down depending on various factors and forces affecting capital markets. Past performance of the Sponsor / AMC / Mutual Fund does not indicate the future performance of the Scheme. Mutual funds invest in securities which may not always be profitable and there can be no guarantee against loss resulting from investing in the Scheme. For scheme specific risk factors and other details please read the Scheme information Document (SID), Statement of Additional Information (SAI) and other scheme related document carefully before investing.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. SID, SAI, Key Information Memorandum and application forms are available at Investor Service Centres and distributors.

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 behaviour. 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.


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