Indian investors most optimistic: ING

Indian investors continue to remain the most optimistic across Asia Pacific as they expect investment sentiment in 2008 would be better than it was last year, a study says.

"An overwhelming 93 per cent of investors in India said that they expect the overall investment sentiment will be better in 2008 compared to 2007," according to the ING Investor Sentiment Index that was launched on Wednesday.

The survey comes after a seven-session fall in the Indian market, with the benchmark Bombay Stock Exchange's Sensex losing over 4,000 points in the period. However, the market has staged a recovery of about 1,000 points on Wednesday.

Investor sentiment in India has remained highest with a score of 167, despite a drop in confidence level among Asian investors in the fourth quarter of 2007, mainly due to sub-prime concerns and policy changes in some markets, the survey shows.

"Although the ING Investor Sentiment Index reveals that the sub-prime-led credit crunch and political uncertainties have made investors more cautious, core sentiment remained positive in the region as 2007 came to a close," ING Investment Management Asia-Pacific Regional General Manager Eddy Belmans said.

Overall sentiment going into 2008 was robust, with investors in India, Hong Kong and Philippines among most optimistic.

Those in Japan, Australia, New Zealand and Taiwan were the least optimistic, the index, based on the analysis of a quarterly survey commissioned by global financial giant ING and carried out by international research firm TNS, revealed.

"India's investment outlook stays highly positive... Its economic boom will continue due to growth drivers such as consumer spending touching new highs," ING Investment Management India MD & CEO Vineet K Vohra said.

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, would also drive the boom, Vohra said.

The real GDP growth is currently estimated at 8 per cent, slightly lower than the previous fiscal 9.4 per cent, Vohra added. Notably, the previous quarter's enthusiasm among Chinese investors has been dampened, the survey added.

However, the survey revealed that despite optimism expressed by many Indian investors with respect to the near-term outlook for the domestic economy in the first wave, significantly fewer respondents surveyed in the second wave believed that their home economy improved over the same three-month period.

Meanwhile, investment outlook has remained positive for the short-term future with over three quarters of the respondents of the opinion that the return on investment in the next three months will increase.

Interestingly, the survey reveals that only Indian and Indonesian investment decision making has not been much affected by the sub-prime led-credit crunch in varying degree. While in most of the surveyed countries, it has impacted the investment decisions over the past three months and the effect would continue in the next three months.

More than 70 per cent of 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.