The JP Morgan Asset Management – ValueNotes Investment Confidence Index (ICI), launched in August 2009, has recorded the biggest fall in its history, dipping to an all-time low. For the first time ever, the confidence in India’s economic growth has broken out of the 147-154 range to end at 136.1, denoting a cautious outlook.
The ICI is published on a quarterly basis and captures the confidence of the retail and corporate investor sector, as well as financial advisers, on the Indian economic and investment environment. ValueNotes, an independent market research company, was commissioned by JP Morgan Asset Management to conduct the survey.
According to a statement, confidence has dropped across the board among retail investors, corporates and advisers, amid concerns over the investment market environment. The ICI was at 132.3 in March, a 14-point or 9.5 per cent decline from that in December 2010.
The other key findings are that money market mutual funds are the most preferred debt instrument among 86 per cent of corporate treasuries this quarter, compared to 67 per cent in December 2010. “Retail investors (63 per cent) and advisors (68 per cent) believe that the benchmark BSE Sensex will trade at higher than current levels in September,” added the release.
“Inflation is clearly a concern among the Indian financial community,” said Christopher Spelman, whole-time director and chief executive officer of JP Morgan Asset Management. “Enthusiasm in the Indian growth story has suffered this quarter and concerns over the global economy are resurfacing. However, it is encouraging that investors and advisors both believe that the Sensex will be higher in September then it currently is. Another point to note is that mutual funds remain the most preferred debt investment vehicle this quarter,” he added.
The survey 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, etc.