Contributed by: Ishwar Chidambaram, CFA
Staying true to its tradition, IAIP conducted the 6th Annual Forecast Survey in March 2014. The survey attempted to capture the outlook among Investment professionals towards the relative performance of various asset classes over the coming financial year FY 2015. The response to the survey was very good, with 431 investment professionals participating in the online survey. Participants comprised the entire spectrum of the investment industry, ranging from AMCs and brokerages to regulators and stock exchanges. The results of the survey were presented by Jitendra Marchino, CFA, at the IAIP’s 6th Annual Forecast Event (covered in another post) held on 1st April, 2014.
The key findings are summarized below:
- The most preferred asset class is Equities, with an overwhelming majority of 71% respondents favoring this asset class. Real Estate came in a distant second, with only 12% respondents preferring it.
- Continuing with the preference for Equities, the majority feel that best relative value is in Mid-cap Equities, with Small-Cap Equities and Large-Cap (Sensex) stocks following close behind.
- A large majority of nearly 59% respondents were of the opinion that India’s real GDP growth would be in the 5% to 6% range.
- Nearly 46% respondents believed that core inflation, as measured by CPI, would lie in the range of 7% to 8%.
- 49% participantsfeel that the yield on the Benchmark 10-year G-Sec, would be in the range of 7 to 8%.
- Almost 39% respondents felt that Brent Crude would trade between USD 100 to 110 per barrel by the close of FY2015.
- More than 45% participants believe that Gold will trade between USD 1200 and USD 1400 per ounce. Almost 38% feel it will trade between USD 1000 and USD 1200.
- More than 42% felt that INR/USD exchange rate will be below INR 60 per USD. A significant proportion of almost 33% believe the INR will be range bound between INR 60 and 62 per USD.
- Nearly 43 % of respondents feel that the BSE Sensex will be above 24,000 in FY2015. An additional 40% feel it will trade between 22,000 to 24,000 levels.
- Almost 69% of participants are optimistic that corporate profits- as measured by Sensex EPS- will rise between 10% and 20% over FY 2015.
- Nearly half of those polled felt that the most important driver for Indian equities over the next 12 months would be Indian Election results and politics. Nearly 37% felt that Government Policy Actions and Economic Reforms would be significant.
- Nearly a third of those polled felt that the biggest concern for economic growth would be the National Election Results of 2014.
- An overwhelming majority of 88% respondents believe that the BJP-led NDA coalition will form the next government.
- Almost 80% of participants felt that their Earnings (salary/income/profits) would rise between 0 to 20% in FY 2015
For a copy of this Survey click on IAIP Annual Forecast Survey FY 2015
– I C