There is a new index to measure investor mood and – surprise, surprise – those who put in the money are more cocky than those who tell them what to do with it.
The nation’s first Investor Confidence Index (ICI) says retail investors seem to be more confident of making additional investments than their financial advisors. However, Individual Fund Advisors (IFAs) seem more confident of appreciation in portfolio values than clients.
The positive sentiment was aided by the outlook on GDP growth and political stability.
ICI was launched on Wednesday by JP Morgan Asset Management India in association with ValueNotes, a research company. “The index would track confidence of retail and corporate investors, and IFAs from eight cities on the Indian economic and investment environment on a quarterly basis,” said Krishnamurthy Vijayan, Executive Chairman of JP Morgan Asset Management India.
The index, which ranks confidence level on the scale of ‘Zero to 200’, with 100 being neutral, stood at 135.9 for July 2009, indicating optimistic outlook from retail, corporate investors and IFAs. Private sector employees were more confident.
Among cities, the confidence level was highest in Chennai with both retail investors and IFAs showing confidence level of 160.1 and 147.3 respectively. Hyderabad had the lowest retail investor confidence at 98.1.
Both investors and advisors expect Sensex to be at 16,000 – 17,000 levels by December 2009. Seventy six per cent of retail investors believe that the Sensex would trade higher from July 2009 levels.