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Wednesday, October 21, 2009

Sensex may reach 19,000 level by March 2010: JP Morgan

The Bombay Stock Exchange's benchmark index Sensex may reach 18,000-19,000 points level by end-March 2010 led by improved investor confidence, a survey by J P Morgan Asset Management company said.

"Both investors and advisors expect (the) Sensex to reach 18,000-19,000 in March 2010. Ninety-three per cent of advisors and 68 per cent of retail investors expect the Sensex to rise from current levels," J P Morgan said in a report 'Investor Confidence Index'.

J P Morgan said these expectations hinged on prospects of a global economic recovery coupled with a sustained confidence in the Indian economy across the board.

According to the survey, the Investor Confidence Index stood at 146.4 in September 2009, up by 10.5 points from July 2009, the survey said.

The report said about 50 per cent of corporate investors considered GDP growth and the possibility of India exceeding the 7 per cent target for FY 10 as the biggest positive indicator, while retail investors considered the rise in stock markets as the biggest indicator.

It added that advisors, on the other hand, viewed the inflow of foreign money as the most positive indicator.

The next six months Indian retail investors would seek more investment.

"Retail investor confidence has improved on both portfolio appreciation and likelihood of increasing investment further. Combined with the high expectation from the BSE Sensex and the improved global prospects, the findings suggest that the retail investor will be seeking suitable investment opportunities over the next six months," J P Morgan said.

As much as 56 per cent of retail investors anticipated their incomes to increase, while indicating that they would make additional investments over the next six months against 48 per cent in July 2009, the survey found.

This wealth may be created by money pouring into stocks, as investment activity in mutual funds dropped to 70 per cent from from 82 per cent, J P Morgan said.

Banks, however, exuded maximum confidence on expectations of "global recovery and an increased expectation from clients to increase investments further over the next six months".

However, investors and corporates opined inflation as the most negative economic indicator in India, while advisors viewed the high Government borrowing or fiscal deficit with concern, in the current scenario, the survey said.

J P Morgan's respondents include 1,639 retail investors, 52 corporate treasuries and 293 advisors, that had invested in instruments excluding savings accounts, time deposits, retirement and insurance products, property, gold and other bullion over the past 12 months.

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