A majority of Indian investment professionals is optimistic about prospects of domestic as well as global economies even though they are concerned about lack of ethical culture in financial firms, according to a survey by investment professionals' grouping CFA Institute.
"Indian members are even more upbeat about their local market. Six in ten (61 per cent) respondents here expect the Indian economy to expand in 2014," as per CFA Institute's annual survey, titled 'Global Market Sentiment Survey', released on Monday.
"However, concerns about political instability may affect the outlook. An overwhelming eight in ten (78 per cent) cite this as the biggest risk to the local economy - the highest among the major markets surveyed."
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When it comes to global economic recovery, a majority of members from India (56 per cent) are optimistic. Globally, 63 per cent of those surveyed said they expect the global economy to expand.
Most optimistic are members in the UK (78 per cent) and Brazil (74 per cent) while the least are Hong Kong (54 per cent) and China (48 per cent).
The findings are based on a survey of 6,500 CFA Institute members spread across 110 countries. About 162 people were surveyed from India.
"Indian members are also significantly concerned about the lack of ethical culture within financial firms, with 62 per cent identifying that as the main factor causing the current lack of trust in the finance industry," the report said.
"Only Switzerland (71 per cent) and Singapore (63 per cent) are more critical," it added.
As many as 96 per cent of respondents from India felt that effects on energy prices caused by unrest in the Middle East would have a negative impact.
"More Indian respondents also believe that progress of recovery in Europe would have a positive impact (85 per cent), to a much greater degree than they believe progress of recovery in China (56 per cent) or even domestic political stability (58 per cent) would," the report said.
India heads into a general election next year and that is likely why concerns over domestic political instability feature so prominently, said Navneet Munot, a director of the advocacy committee and board member of the Indian Association of Investment Professionals (IAIP). IAIP is a member society of CFA Institute.
The number of members who expect the global economy to expand has nearly doubled in the last two years, according to CFA Institute president and CEO John Rogers.
"The survey reflects that investor trust has been eroded and in order for the financial industry to be an extraordinary force for good, we must embrace ethical behavior at all levels," Mr Rogers said.
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