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Indians most bullish among growing markets

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Our Markets Bureau Mumbai
Last Updated : Feb 25 2013 | 11:50 PM IST
Among the investors in the four fastest growing emerging economies "� Brazil, Russia, India and China "� those in India were the most optimistic about their home investment market.
 
According to a survey of investment professionals, more than half of the respondents in India were highly optimistic about the prospects for the domestic market.
 
As many as 55 per cent from India said they were "highly optimistic" and 39 per cent "somewhat optimistic".
 
One respondent justified his optimism by citing the "steady rise in level of disclosures, excellent economist as PM of the country, confidence of company CEOs".
 
Investors from the other three economies were more cautious in their outlook. In China, 16 per cent were "highly optimistic" and 53 per cent "somewhat optimistic".
 
"Continuous government efforts have been made, however. investors' trust and confidence are still not in place. And short-term strategy prevails among fund managers," said a Chinese investor.
 
In Brazil, again, 15 per cent were "highly optimistic" and 62 per cent "somewhat optimistic." In Russia, 17 per cent expressed pessimism about their investment market, although 11 per cent were "highly optimistic" and 53 per cent "somewhat optimistic".
 
A Russian respondent said: "My feeling is that the economy is stabilising in Russia. The wealth of people grows and there is less need for black market schemes."
 
But the survey concluded that investors across the region were tempering their optimism for future growth in their markets with concern about domestic political risks, ethical standards and corporate governance in local businesses.
 
"The global financial market attaches a risk premium to securities in emerging economies, precisely because of factors such as political instability and the lack of an ethical track record," said John Barrass, head of the EMEA office of CFA Institute.
 
"What is intriguing is that investors remain confident about their countries' investment potential. The real opportunities are in the services sectors - particularly financial services. It is also a wake-up call to the growing number of corporations in China - that investors view the greatest danger to their investments to come from poorly-governed businesses."
 
More than 1,100 CFA Institute members and candidates participated in the investor attitude survey of the BRIC countries, giving a overview of market professionals' concerns in these emerging economies.
 
More than 90 per cent of the respondents were citizens of the country in which they responded. The number of respondents from India were the second highest (323), next to China (602).
 
In all four countries, investors placed financial services among the top three sectors for growth; Brazil, Russia and China also agreed that the energy and consumer goods sectors hold great potential.
 
In India, 55 per cent of respondents picked banking, finance and insurance among the top three sectors, 36 per cent chose construction and 35 per cent picked communications, technology and telecoms.
 
Investors based in China are the least worried about political instability, the survey shows, but in all four BRIC countries, political instability is followed by concerns about local economic issues. 66 per cent of respondents from India felt that
 
Only in India do any investors consider corporate governance standards among resident listed companies to be "excellent" (four per cent).
 
Chinese and Russian investors are severely critical of standards among their companies. 46 per cent of India respondents felt that the governance standards were 'good' or 'excellent'.
 
As against in China, 68 pe rcent of the respondents felt the governance standards were 'poor'.

 
 

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First Published: Feb 14 2006 | 12:00 AM IST

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