Nearly 60% of investment professionals in India expect equities to provide the best total risk-adjusted returns for the year ending March 2017 (compared to other asset classes such as bonds, cash, commodities, precious metals and real estate), according to the 8th IAIP Annual Forecast survey.
The online survey was conducted in March 2016 which covered 635 portfolio managers, research analysts and C-suite executives.
Investment managers cite India’s real GDP growth rate for this financial year to be between 6.5% and 7.5%, says a press release issued by CFA Institute.
“India will grow to a $ 4 trillion economy in the next 7-8 years. FY 2015-16 was a year full of challenges, mainly because of a weak monsoon for two consecutive years, along with the steep fall in oil price that impacted a few economies. Nevertheless, with political stability we expect earnings to grow. We are doing things correctly on the strategic and structural front, especially in infrastructure,” says Sunil Singhania, CFA, CIO – Equity, Reliance Mutual Fund.
Investment managers expect gains in equity market indices, with BSE Sensex predicted to climb 11% from current levels of around 25,000. However, they expressed concern about India’s economic growth outlook over the next 12 months considering global low growth environment and deflation risk, followed by government policies and initiatives.
Key findings from the survey:
10 year GOI securities
73% of respondents expect GOI securities to trade between 6.5% and 7.5% by March 2017
INR/USD exchange rate
The average INR/USD exchange rate is estimated to be between 66 and 68 over the next financial year
Most critical driver for Indian equities
Government policy actions and economic reforms are the most important factors at 39%, followed by corporate results/profits at 22%
Compensation expectations in the finance industry
80% of respondents see an increase of 0% to 20% in the salary/income/profits of investment professionals
