61% investors believe Indian markets will outperform global peers

New Delhi, April 3 The Indian equity market witnessed a see-saw motion in the first few months of 2011, but a significant number of Indian investors believe it will outperform global indices in 2011.

According to a Franklin Templeton Global Investor Sentiment survey, 61 per cent of the Indian investors surveyed think the domestic bourses will do better this year than global indices.

Moreover, 82 per cent of respondent are optimistic that the Indian stock market will do better than the rest of the world over the next 10 years.

In the first three months of 2011, the Indian stock market has fluctuated on concerns of surging global crude oil prices and inflation at home. Last year, it gave a return of about 15 per cent to investors.

“The survey clearly shows the growing optimism in India about the state of the economy and growth prospects. Despite this confidence in local markets, it is interesting to note that many people are considering increasing their global exposure over the coming years. We believe this is a positive trend as it helps Indian investors diversify their portfolio across countries and asset classes,” said Mr Harshendu Bindal, President, Franklin Templeton India President.

Out of over 13,000 people surveyed in 12 countries, 60 per cent of global respondents think their own country’s stock market will increase in 2011. And 33 per cent believe it will perform better compared with the rest of the world. This indicates the growing preference to invest outside their domestic markets in the coming years.

Globally, 34 per cent investors currently invest outside of their domestic market, while that number jumps up to 50 per cent when looking at 2011.

“With an improved global economic outlook, investors are increasingly looking worldwide for investment opportunities. A diversified portfolio today is no longer just a mix of asset classes but also a mix of geographies,” said Mr Gren Johnson, President and CEO, Franklin Templeton Investments.

When it come to long term investment, Indian respondents (53 per cent) believe that mutual funds are best suited to meet long—term goals, such as retirement and children’s education.

Indian respondents believe patience and timing are the most important factors for successful investing in stock markets.

The survey found stark regional differences in opinion on whether the best investment opportunities exist in emerging versus developed markets. A majority of those in Asia (8 per cent) and Latin America (61 per cent) believe the best investment opportunities over the next 10 years will be found in emerging markets.

Europeans are almost evenly split with 53 per cent looking to emerging markets, while in the US and Canada, only 37 per cent opined that emerging markets are going to provide the best returns in the decade ahead.

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