Indian investors most optimistic in Asia: ING

Indian investors have emerged as the most optimistic lot across Asian markets in the first three months of 2008, although the country like the rest of the region is not insulated against the uncertainty in the global market, a latest report says.

According to a survey by global financial institution ING, India retains the position of being the most optimistic market in the first three months of 2008, but, the rise in investor sentiment was a minuscule 0.6 per cent against the previous quarter.

India's investor sentiment index rose to 168 for the first quarter of 2008 from 167 in the fourth quarter of the calendar year 2007.

The ING Investor Dashboard survey measures and tracks sentiment and behaviour of mass affluent investors each quarter from 13 Asia-Pacific markets including India, China, Hong Kong, Indonesia, Taiwan, Thailand, Japan, Australia and New Zealand.

Each market covered is assigned an investor sentiment score ranging from 0 (least) to 200 (most optimistic).
Although Indian and other Asian investors remain cautiously optimistic for longer-term and might think the worst is over, domestic investors are among those who are more bullish about the market, the survey revealed.
Moreover, while both have adopted a 'wait and see' investment approach, Indian investors are moving towards lower risk investments, it added.

As the region continues to deal with the impact of the sub-prime crisis, global credit crunch and US economic slowdown, the ING Investor Dashboard's pan-Asia sentiment index fell to 125 for reviewed period from 135 in Q4 2007.

Despite the overall decline, pan-Asian investor sentiment remained within the optimistic level. Fast-growing markets like China and India reflected the highest level of investor optimism with investor sentiment index scores at 136 and 168, respectively.

About 67 per cent of investors in India and over 73 per cent of respondents in Asia (excluding Japan) expect the sub-prime crisis to impact their investment decisions in the April-June quarter this year.

"It is not surprising to find that investor sentiment has fallen in Asia over the last two quarters. The reality is that, markets around the world are linked and Asia is, therefore, not spared the effects of the credit crunch and a slowdown in the US economy," said ING Investment Management India Managing Director and CEO Vineet K Vohra.

However, what we are seeing is that investors in fast growing markets like India and China appear more optimistic, despite the global market uncertainty primarily because they have a 'young' investor base which tend to be more positive in its investment outlook and  their domestic economies are still strong," Vohra added.

Other highlights of the survey include that Indian investors seem to be getting more aggressive on the stock markets, while reducing their property allocation.

Although India is still a popular destination for future investments among investors in most markets who would invest overseas, it seems to be loosing some of its favour, the survey said.

Vohra added it may be premature to anticipate that the worst is over. However, in the longer term, despite the volatility in the financial markets and a slowing US economy, India and other Asian economies would remain robust.