Indian investors redeemed after markets fell, Chinese when markets were up, Koreans went easy during volatility while Japanese have said sayonara to mutual funds
Financial sectors across Asian and other developed countries are facing a volatile period owing to last two months’ recession.
So much so that investor behaviour has gone through a sea change across all countries.
Just take India and China – when it comes to investment, both countries are poles apart from Indians. When the markets were collapsing here, large scale redemptions were seen in mutual funds.
Whereas, in China, investors were redeeming when the markets were going up in the early part of this year, said Francois Petit-Jean from BNP Paribas Asset Management.
Francois, responsible for ‘New Markets’ at his firm, told Mumbai Mirror that investment behaviour of investors varies a lot across Asian economies.
China
The size of the Indian mutual fund industry is about Rs 2,50,000 crore. Whereas, the MF market in China is actually about 20 per cent smaller than this!.
“It’s quite a paradox in China. Redemptions were up at about 30 per cent before the markets collapsed in China. And this was despite the positive signs there as the markets had appreciated by about 45 per cent over a year,” Francois said.
Korea
Though, the markets in Korea also went southward in May-June, investors there actually made fresh investments. “We sold a lot of ‘structural’ products which are steady in nature. The redemption pressure was quite low in Korea compared to India and China and only 5 per cent of redemptions were from equities,” Francois said. As such, the Korean investors rely more on safer bets and, being a highly developing country, investors have faith in strong fundamentals of the economy.
Japan
Francois said that the mutual fund market in this highly advanced country is virtually non-existent. Investors prefer to part their money in post office savings and surplus savings are invested in bonds which are more safer compared to equity markets.
“In this volatile phase seen across the Asian countries, positive markets are for fixed income products, retirement benefit funds and the funds for children benefit,” he said.
India
Francois reiterated that, in India also, the markets for debt funds and other long-term plans would work till the markets are stabilised.
“The inflationary pressure will continue to be a cause of concern and especially, country’s cost of importing oil,” he said.
Financial sectors across Asian and other developed countries are facing a volatile period owing to last two months’ recession.
So much so that investor behaviour has gone through a sea change across all countries.
Just take India and China – when it comes to investment, both countries are poles apart from Indians. When the markets were collapsing here, large scale redemptions were seen in mutual funds.
Whereas, in China, investors were redeeming when the markets were going up in the early part of this year, said Francois Petit-Jean from BNP Paribas Asset Management.
Francois, responsible for ‘New Markets’ at his firm, told Mumbai Mirror that investment behaviour of investors varies a lot across Asian economies.
China
The size of the Indian mutual fund industry is about Rs 2,50,000 crore. Whereas, the MF market in China is actually about 20 per cent smaller than this!.
“It’s quite a paradox in China. Redemptions were up at about 30 per cent before the markets collapsed in China. And this was despite the positive signs there as the markets had appreciated by about 45 per cent over a year,” Francois said.
Korea
Though, the markets in Korea also went southward in May-June, investors there actually made fresh investments. “We sold a lot of ‘structural’ products which are steady in nature. The redemption pressure was quite low in Korea compared to India and China and only 5 per cent of redemptions were from equities,” Francois said. As such, the Korean investors rely more on safer bets and, being a highly developing country, investors have faith in strong fundamentals of the economy.
Japan
Francois said that the mutual fund market in this highly advanced country is virtually non-existent. Investors prefer to part their money in post office savings and surplus savings are invested in bonds which are more safer compared to equity markets.
“In this volatile phase seen across the Asian countries, positive markets are for fixed income products, retirement benefit funds and the funds for children benefit,” he said.
India
Francois reiterated that, in India also, the markets for debt funds and other long-term plans would work till the markets are stabilised.
“The inflationary pressure will continue to be a cause of concern and especially, country’s cost of importing oil,” he said.