HNIs who missed rally still want to invest: Barclays Wealth
A survey that Barclays Wealth carried out of about 2,100 high net-worth individuals finds that a lot of money is still waiting to be invested into the markets. When asked why this money didn’t come into the market when it was extremely cheap — at 8,000-9,000 levels — Satya Bansal, the company’s CEO said investors had been wary about investing though they were confident about economic recovery. “While their [HNIs’] perception to recovery is fairly strong — almost 90% of them felt that the economic performance is going to improve — when we ask them how much of this opportunity they want to utilize it as a real opportunity to invest in, hardly 28% said that they would like to increase their risk in their portfolio given the opportunity,” he said. “As they get more comfort and as they get more comfortable with it, they would possibly start increasing the overall risk in the portfolio and that’s the reason I feel that there is still a good amount of money still waiting to be invested in the market.”
Also read: Money still waiting on sidelines to come in: Edelweiss Cap
Here is a verbatim transcript of Satya Bansal’s exclusive interview on CNBC-TV18. Also watch the accompanying video.
Q: You mentioned that a lot of money is waiting on the sidelines. It baffles me — I thought this was the smart money, this money should have been there when the market was at 8,000-9,000, what is it doing waiting around till the time market goes to 16,000? Valuations look pretty stretched given that we are in a difficult environment or at least not a sure environment. Why is the money waiting?
A: Let me put this in relative context and we being in this industry managing money for high net-worth and ultra high net-worth investors try to attempt to read the behaviour of these so-called high net-worth investors. Surprisingly, when we did this survey recently with more than 2,100 global investors in the high league, while their perception to recovery is fairly strong — almost 90% of them felt that the economic performance is going to improve — when we ask them how much of this opportunity they want to utilize it as a real opportunity to invest in, hardly 28% said that they would like to increase their risk in their portfolio given the opportunity.
And when we looked at it from Indian context perspective, as to how many such investors were positive about the economic recovery, the number from 90% came down to 80%. Again out of the 80%, only 16% said that they would like to increase the risk to the portfolio. So it indicates that while they are confident about the economic prospects and the recovery, they are still not confident whether they should take additional risk on the portfolio.
I feel as they get more comfort and as they get more comfortable with it, they would possibly start increasing the overall risk in the portfolio and that’s the reason I feel that there is still a good amount of money still waiting to be invested in the market. Globally, if we interact with investors and try to get their mood on Indian market particularly we understand a couple of things. One obviously is that the liquidity is now far better. We have also seen that the perception about India as a market has improved.
Q: What do the investors prefer in terms of countries and in terms of sectors?
A: First, I think, they are still adopting a more cautious approach so far as increasing their overall risk in the portfolio is concerned even as they are confident of the overall economic recovery. So far as their sector preference is concerned, we did this survey across Europe, US and in Asia and the preference for that particularly with the Indian investors have clearly come out in a combination of defensive and a growth play. On the defensive side, they are keener on the healthcare, pharma and consumer goods. On the growth sector, they are positive on energy and natural resources.
