Survey reveals concerns about market integrity
Investment professionals from across the world believe India to be one of the top three markets to offer the best investment opportunities in 2015, according to the annual CFA Institute Global Market Sentiment Survey (GMSS) 2015. The same respondents also have strong concerns about developed economies weakening further and political instability in other regions such as France, Germany, USA, Brazil, and Hong Kong.The survey respondents in India include portfolio managers, research analysts, consultants, and C-suite executives.
However, Indian respondents cited a lack of ethical culture within financial firms, integrity of financial reporting and mis-selling by financial advisors as the most serious issues undermining local market integrity. They call for improved regulation and enhanced corporate governance practices, as well as improved transparency of financial reporting as necessary actions to improve market integrity and investor trust.
"We are in the beginning of a new growth phase where investment professionals are optimistic about the country's GDP outlook and making it an ideal investment destination. We also expect the political stability to have positive effects," says Jayesh Gandhi, CFA, President of the Indian Association of Investment Professionals (IAIP), a member society of CFA Institute. "An increased focus on job creation partly brought on by the 'Make in India' campaign and rising rural consumption will have the biggest positive impact on our market".
The annual CFA Institute survey gathered the opinion of 5,259 CFA charterholders and members globally, more than 700 of whom are in APAC.
Employment prospects: In India, 77% of members surveyed expect employment opportunities for investment professionals to increase in 2015 (most optimistic globally); only 1% believe they will decrease. About 22% expect job opportunities to stay about the same.
Economic outlook: Indian respondents anticipate that continued accommodative central bank policies (28%) and an increased focus on job creation and consumer consumption (28%) will have the biggest positive impact on global capital markets in 2015.
Inflation: The biggest risks to the Indian economy are inflationary surprises (33%) and weak developed market economies (30%).
Trust in practitioners: 66% of the respondents in India believe a lack of ethical culture within financial firms is the top factor contributing to the current lack of trust in the finance industry.
Prevention of future financial crises: Members in APAC cite better risk disclosure at 75%, the highest level for any region, as the regulatory reform that is expected to prevent future financial crises.
"Through this survey, the investment community in India and investors looking at this market have outlined the factors that shape the outlook for 2015 and the message is very clear: investors are optimistic, appreciate political stability and are bullish on job creation in India. Other factors include a high value placed on ethical practices and transparency when it comes to investments. These findings underscore the importance of CFA Institute's Future of Finance initiative, a long-term global effort to shape a trustworthy, forward-thinking financial industry that better serves the society," adds Vidhu Shekhar, CFA, country head for India, CFA Institute.
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