Indian investors continue to be optimistic, says ING Investor Dashboard Sentiment Index

Indian investors continue to be optimistic, says ING Investor Dashboard Sentiment Index
As the global economic situation deteriorates, domestic economy gives confidence to investors

Key Highlights of the Quarterly ING Investor Dashboard Survey

· India investor sentiment index falls 4% from 163 for Q2 08 to 156 for Q3 08 although Indian investors continue to be the most optimistic amongst all markets surveyed,
· Index for India falls 7% to 156 for Q3 2008 from 168 for the same quarter last year, as investors take stock of the global markets and economic developments
· Data suggests investors in more US-dependent markets including China, Hong Kong, Singapore, Korea and Taiwan are more sensitive to volatility in global markets
· Indian investors become more balanced and less aggressive in their investment approach

ING, the world’s largest financial services group (by Fortune 500, 2007), today released data for India from the quarterly ING Investor Dashboard Survey which shows a marginal decline in investor sentiment for Q3 2008. Despite a slowdown in the global economies and volatility in international financial markets, the ING Investor Dashboard Sentiment Index for India continues to reflect the highest level of investor optimism across Asia. This suggests that although local investors have been affected by external developments, India’s fundamentally strong domestic economy has helped to minimize the impact on their investments.

”Although the ING Investor Sentiment Index reveals that the subprime crisis & recent credit crunch have made investors more cautious, the core sentiment of Indian investors remains optimistic in the country compared to other economies.” commented Vineet K. Vohra, MD & CEO, ING Investment Management India.

India’s investor sentiment falls to 156 for Q3 2008 from 168 for the same quarter last year (Q3 2007) as investors become more balanced and less aggressive in their investment approach. India continues to be the most optimistic market in Asia.

The overall pan-Asia ING Investor Dashboard Sentiment Index falls 39% to 86 for Q3 2008 from 141 for Q3 2007, and registers a quarter-on-quarter fall of 21% for Q3 2008 from 109 for Q2 2008, as investors in Asia take stock of the global markets and economic developments.

The ING Investor Dashboard is the first quarterly survey in the Asia Pacific region that provides a pan-Asia (ex-Japan) investor sentiment index. The survey is conducted quarterly across 13 markets* in Asia Pacific, and not only provides market insights on investor attitude and outlook but also allows each market to be benchmarked and tracked against the overall investor sentiment across Asia using the pan-Asia index.

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* The survey was conducted across 13 markets in Asia Pacific including Hong Kong, China, India, Indonesia, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand, Japan, Australia and New Zealand. The pan-Asia investor sentiment index includes all Asia markets and excludes Japan, Australia and New Zealand



Optimistic expectations about Q4 2008

Continued concerns about subprime crisis and slowdown in the US economy appeared to have marginally impacted Indian investors’ views on the local economy and their personal financial situation. Although Indian investors have maintained their status quo on the economic situation in the last quarter and their expectations for Q4 08 as being optimistic, fewer investors claimed their Return on Investments (ROI), personal and household financial condition to have improved in the past. However, they maintain their expectations for the coming quarter to be better for their ROI, personal and household finances. The recent decrease in oil prices could have been regarded as a positive sign by most of the investors.

· 11% of Indian investors say the economy in Q3 2008 deteriorated compared to 10% in Q2 2008
· 5% of Indian investors say their personal financial situation deteriorated in Q3 2008 compared to 7% in Q2 2008
· Fewer number of investors i.e. 48% claimed that their ROI had increased in Q3 2008, compared to 63% in Q2 2008

The worsening global financial situation that originated in the US subprime crisis and slowdown in the US economy remain key external concerns for Asian investors, including those in India. Inflation is also a concern.

View on subprime crisis/credit crunch:
· 64% of Indian investors say they have been impacted by the subprime crisis/credit crunch in Q3 2008 and the same number of investors say they will continue to be impacted by the subprime crisis in Q4 2008 (see Graph 1)

View on US economy:
· 95% of Indian investors say they have been impacted by the US economy in Q3 2008. However, they are optimistic about Q4 2008, and a smaller percentage (76%) say they will continue to be impacted by the US economy in Q4 2008. Only 13% of the investors expect the US economy to further deteriorate in Q4 2008

View on inflation:
· 69% of Indian investors say that inflation impacted their investment decisions in Q3 2008, and a marginally higher number of investors (70%) expect inflation to impact their investment decisions in Q4 2008
· Although a significant higher number of investors (62%) expect inflation to rise further in Q4 2008 (see Graph 2), inflation has eased to its lowest in three months in late September

Commenting on the results, Mr. Vineet K. Vohra, Managing Director & CEO, ING Investment Management India said:
“We believe the core drivers of the Indian economy remain firmly in place and can help sustain economic growth, relative to global averages. While we live in an increasingly interconnected world and are not immune to the global slowdown, India has the resilience to ride out the tumult albeit with some short-to medium term impact. Our message to investors is simple- look beyond the present market volatility and take a long term strategic view. Diversify across markets and invest for a longer time horizon to attain your investment goals.”



US-dependent markets including Hong Kong and China appear to be the hardest hit

The more US-dependent markets in Asia, including Hong Kong and China appear to be the most vulnerable to external market developments and volatility and have registered the largest falls in investor sentiment.

Looking ahead to Q4 2008, investors in Hong Kong China, China, Korea and Singapore also appear to be the most sensitive about the global impact of the subprime crisis and slowdown in the US economy compared to the rest of the Asian markets.

· 94% of Hong Kong investors; 80% of Chinese investors; 87% of Korean investors; and 87% of Singaporean investors say they will continue to be impacted by the subprime crisis in Q4 2008
· 89% of Hong Kong investors; 86% of Chinese investors; 92% of Korean investors; and 93% of Singaporean investors say they will continue to be impacted by the slowdown in the US economy in Q4 2008


Indian investors re-allocate their portfolio with rising inflation

Local investors are planning to re-allocate their portfolios significantly, and a significantly higher proportion of investors plan to invest less and reserve money for daily expenses because of inflation.

· 49% of investors who would re-allocate their portfolios to beat inflation, plan to invest in mutual funds
· Majority of investors i.e. 65%, expect residential property prices to rise further in Q4 08, on average by 3.8%.

“We are witnessing a shift in investors’ investment patterns - while the direct exposure to equities will decrease, mutual funds exposure seem to be finding favor with the investors as they (MFs) reduce the investment risk.” says Mr. Vohra.


Indian investors increasingly moving towards low risk investments, as risk appetite continues to fall

Not surprisingly, the data shows that Indian investors have a higher preference for lower-risk investments given the current market volatility. 72% of Indian view low-risk investments as favourable compared to 68% for medium-risk investments and 52% for high-risk investments.

Also, due to the recent stock market slump, the proportion of investors expecting the stock markets to decline in Q4 2008 has almost doubled.

For detailed (high-resolution) data charts on the ING Investor Dashboard Sentiment Index, please download the results presentation from http://www.ing.asia/investor_dasboard

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Press enquiries
Pankaj Rawat
ING Investment Management India
+91 22 3982 7937
pankaj.rawat@in.ing.com

Notes to Editors

About the ING Investor Dashboard
The ING Investor Dashboard survey measures and tracks investor sentiment and behaviour of mass affluent investors each quarter from 13 Asia Pacific markets including China, Hong Kong, India, Indonesia, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand, Japan, Australia and New Zealand. Each market covered by the survey is assigned an investor sentiment score ranging from 0 (the least optimistic) to 200 (the most optimistic).

It is the first quarterly survey in Asia Pacific which provides a specific industry benchmark for pan-Asia (ex-Japan) investor sentiment. Each quarter, the pan-Asia ING Investor Dashboard sentiment index is also developed as part of the survey. The pan-Asia sentiment index is derived from the median sentiment index scores of 10 of the Asian markets including China, Hong Kong, India, Indonesia, Korea, Malaysia, the Philippines, Singapore, Taiwan, and Thailand (excludes Japan, Australia and New Zealand).

The ING Investor Dashboard was launched in Asia Pacific following the success of ING's Investor Barometer in Europe. The Investor Barometer is published regularly in the Netherlands and Belgium to gauge the confidence of private investors. It is considered an authoritative measure of the sentiment of private investors and is closely followed by key players in the European financial industry.

The Q3 2007, Q4 2007, Q1 2008 and Q2 2008 surveys were carried out in August 2007, December 2007, March 2008 and June 2008 respectively. The Q3 2008 survey was conducted in September 2008 and involved face-to-face or online interviews with a total of 1,307 mass affluent investors across the 13 Asia Pacific markets. The respondents are aged 30 years and above, and have disposable assets or investments of US$100,000 and above, with the exception of Indonesia (disposable assets or investments of US$56,000 and above) and the Philippines (disposable assets or investments of US$100,000 or monthly income of Php250,000 and above).

The survey is conducted by international and independent research firm TNS.

Profile of ING
ING is a global financial institution of Dutch origin offering banking, insurance and asset management to over 85 million private, corporate and institutional clients in more than 50 countries. With a diverse workforce of about 130,000 people, ING comprises a broad spectrum of prominent companies that increasingly serve their clients under the ING brand.


Profile of TNS
TNS is the world’s foremost provider of custom research and analysis, combining in-depth industry sector understanding with world-class expertise in the areas of Retails and Shopper Insights, Stakeholder Management, New Product Development and Brand and Communications. It works in partnership with its clients, meeting their needs for high-quality information, analysis and foresight across a network of over 70 countries.