Indians are most optimistic investors

Indians are still the most optimistic investors in Asia mainly because of its sustained domestic growth momentum, but going into 2011, they have somewhat lower expectations than they did in the previous quarters, says a survey.

The quarterly Investor Dashboard Sentiment survey by global financial services group ING, shows that amongst the ten Asia Pacific markets included in the survey, India at 161 (a 11 point fall from Q2 2010) continues to lead the region and manages to sustain very optimistic sentiment.

"India investors' confidence is driven by India's sustained domestic growth momentum. During the second quarter of FY 2011-12, key consumption sectors have continued to show robust growth while investment demand has stalled a bit due to policy and procedural delays," ING Investment Management India Managing Director & Chief Executive Officer Navin Suri said.

High inflation rate continued to hurt the Indian economy. Besides, there is a decrease in sentiments, especially in terms of past three months economic indicators - economic situation, return on investments, personal and household financial situations, the survey said.

Indian investors' expectations for the quarter ahead are little lower owing to the increasing inflationary pressure in the economy, falling of investment quantum

and concerns that interest rates will rise further, the report added.

"... the recent indicators point to earnestness from the government to step up the pedal and this should augur well for a pickup in investment demand. India will continue to be an attractive investment destination in the medium to long term horizon," Suri added.

In the second quarter of this year, Indian investors continue to hold on to gold, cash, mutual funds, stocks and properties. Besides, some investors believe the rise in the stock market will be at an average rate and well above the Pan Asia (ex-Japan) average.

Meanwhile, investor sentiment in the overall pan-Asia (ex-Japan) region remains in the optimistic territory for the quarter.

However, the Index declined 5 per cent to 130 for the second quarter of this year from 136 in the year-ago period amid "continued signs of a slowdown in the US economy, uncertainty of the Euro zone debt crisis, rating downgrade of USA and threats of a global 'currency war'," the report said.

Asia investors (ex-Japan) are positive about their local economies despite remaining cautious of economic recovery in the US.

Besides, concerns about the impact of the Euro zone debt crisis looms large on the horizon as investors across Asia are optimistic that a double-dip recession is unlikely and Asian markets are possibly decoupling from the global markets, the study said.