Overall investment sentiments to be better in 2008: study

New Delhi, Jan 24 (UNI) An ING Investor Sentiment Index launched today shows that investors in India continue to remain the most optimistic across the Asia-Pacific Region with 93 per cent of the respondents in the survey stating that they expect the overall investment sentiment to be better in 2008 than the previous year.

However, against a backdrop of global economic uncertainty, significantly more investors think that the current environment favours low risk investment. An increasing number of investors have shifted away from riskier investments such as stocks for safer investment options of bonds, other fixed interest securities and Real Estate Investment Trusts (REITs) in the past three months.

Despite a drop in confidence level among Asian investors in the fourth quarter of 2007 mainly due to subprime concerns, and political and governmental policy changes in some markets, investor sentiment remained the highest in India with a score of 167 (wave one: 168--the earlier study).

The overall sentiment going into 2008 was robust with investors in India, Hong Kong, and Philippines among the most optimistic, while those in Japan, Australia, New Zealand and Taiwan were the least optimistic. Notably, the previous quarter's enthusiasm by Chinese investors has been dampened.

The ING Investor Sentiment Index is based on the analysis of a quarterly survey commissioned by ING and carried out by international and independent research firm, TNS.

First launched in October 2007, the tracking study surveys changes in investment sentiment and behaviour across 13 Asian markets, namely Australia, China, Hong Kong, India, Japan, Indonesia, Malaysia, New Zealand, Philippines, Singapore, South Korea, Taiwan and Thailand.

For wave two of the survey (the present study), which was conducted in late November 2007, a total of 1,311 mass affluent investors were interviewed through either face-to-face or online interviews. The survey does not capture more recent events that have seen some markets drop on growing concern about the global economy.

"India's investment outlook remains highly positive. This echoes market commentaries which indicate that India's economic boom will continue due to various growth drivers such as consumer spending touching new highs and the massive demand for Indian products which is reflected in a whopping 68.6 per cent rise in the books of India Inc during the first 10 months of 2007.

The real GDP growth is currently estimated at 8 per cent, slightly lower than the 2006-2007 fiscal year's 9.4 per cent, Mr Vineet K Vohra, MD&CEO, ING Investment Management India, said.

Indian investors find overall economic situation and Return on Investment has weakened in the last three months; But most optimistic about the next three months.

The percentage of respondents in India who felt that the return on investment has increased in the past three months dropped from 80 per cent in wave one to 68 per cent in wave two.

The survey findings indicate that the subprime-led credit crunch has, in varying degrees, affected investment decision-making in most of the surveyed countries over the past three months and the effect will continue in the next three months, with the exception of India and Indonesia.

More than 70 per cent investors in Hong Kong, China, Korea and Singapore claimed that it has affected their investment decision in the past three months, while in India the figure was only 14 per cent.

A majority of the investors in 9 out of the 13 markets (not including India, Indonesia, Australia and New Zealand) still anticipate the subprime issue will affect their decision in investment in the next three months.

When asked about their views on the outlook for the US market, the number of respondents who expected the economic situation to deteriorate in the next three months far outweighed that of those who expected the US economy to improve.

Investments in Initial Public Offerings (IPOs) has registered a significant decline with only five per cent investors having applied for an IPO in the past three months as compared to 29 in wave one of the study.

ING is a global financial institution of Dutch origin offering banking, insurance and asset management to over 75 million private, corporate and institutional clients in more than 50 countries.

TNS is a provider of custom research and analysis, combining industry sector understanding with ss expertise in the areas of Retail and Shopper Insights, Stakeholder Management, New Product Development and Brand and Communications.

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