Karvy India Wealth Report 2014 predicts that Sensex can touch 1,00,000 level in 2020 on the back of possibilly the biggest bull run ever in India.
Thanks to the improving macroeconomic trend, cooling commodity prices, governance reforms and revival in growth, India is set to see the biggest bull run with Sensex touching 1,00,000 level by 2020, predicts India Wealth Report 2014 published by Karvy Wealth.
The bull run, which started with Narendra Modi’s election as PM in September 2013 has helped India’s stock market capitalization to reach Rs. 100 lakh crore.
Here is how it projects the growth of different financial assets over the next five years.
Mutual funds
MF AUM as a percentage of GDP for India is currently 6% which is significantly lower than emerging economies such as Brazil (40%) and South Africa (33%). The total individual wealth in mutual funds stood at Rs. 3.93 lakh crore in FY14 compared to Rs. 3.49 lakh crore in FY13.
With the surge in equity markets and maturity level of investors increasing, individual wealth in mutual funds is expected to touch Rs. 12.20 lakh crore in FY19 from Rs. 3.39 lakh currently, states the report.
HNI investment behavior
In its survey of HNIs, 58% said their investable wealth comes from the accumulation of savings made while they were working. 31% of respondents had their wealth created from entrepreneurship, while the remaining 11% had their wealth from inheritance. The survey was conducted in eight cities.
Investment decision influencer
HNIs rated wealth managers to be the top decision influencers as far as investment decisions are concerned. 46% said that their wealth managers’ advice translated into investments, whereas 32% said it is their family which influences such decisions. 11% voted for chartered accountants and peers each as their investment decision influencers.
Individual wealth in FY19
Total individual wealth is expected to grow at a CAGR of 15% to reach Rs. 514 lakh crore in FY19 from Rs. 257 lakh crore in FY14.
Of this, the report says that financial assets will grow at a faster pace than physical assets. The total financial assets of individuals is set to reach Rs. 316 lakh crore in FY19 from Rs. 134 lakh crore in FY14 while physical assets are expected to grow to Rs. 197 lakh crore in FY19 from Rs. 122 lakh crore in FY14.
Read the full report here.