A STUDY ON INVESTORS ATTITUDE

AND KNOWLEDGE TOWARDS

INVESTMENT OPTIONS AVAILABEL
IN INDIA – WITH SPECIAL
REFERENCE TO UAE BASED NRI
Volatile global markets, risk aversion, Euro zone sovereignty issues,
Greek debt, rupee depreciation; these are terms that the investors all over
the globe have become accustomed to these days. With equities markets
giving negative returns all over the globe and the rupee depreciating by
over 12% to the USD, 6% against the Euro and over 15% against the
AED, the major question crossing minds of all NRI’s, PIO’s and OCI’s
is “Is this the best time to invest in India?”
The Indian stock markets because of several reasons have
underperformed the global markets as well as the emerging markets to a
certain extend because of which investors are seeing negative returns, but
if an investor has medium to long term view then this is the best time to
invest in India. The Reserve bank of India has already given signs that
interest rates in India have already peaked and if the inflation rate
stabilize and start to reduce a bit the Reserve bank of India will start
reducing rates which in turn will push the bond prices up. Looking at
these scenarios NRI’s have lot of investment opportunities depending on
their budget and the time frame they can remain invested for.
Savings form an important part of the economy of any nation. With the
savings invested in various options available to the people, the money
acts as the driver for growth of the country. Indian financial scene too
presents a plethora of avenues to the investors. Though certainly not the
best or deepest of the markets in the world, it has reasonable options for
an ordinary man to invest his savings.
One needs to invest to and earn return on your idle resources and
generate a specified sum of money for a specific goal in life and make a
provision for an uncertain future. One of the important reasons why one
needs to invest wisely is to meet the cost of inflation. Inflation is the rate
at which the cost of living increases. The cost of living is simply what it
cost to buy the goods and services you need to live. Inflation causes
money to loss value because it will not buy the same amount of a good or
service in the future as it does now or did in the past. The sooner one
starts investing, the better. By investing early you allow your
investments more time to grow, where by the concept of compounding
increases your income, by accumulating the principle and the interest or
dividend earned on it, year after year.
Research Design
Statement of the Problem
The particular topic is mainly selected to analyze “Investor’s attitude and
knowledge towards investment options available in India - with special
reference to UAE based NRI’s”. The comprehensive statement of the
problem can thus be stated as “Investor’s options in India- a study about the
attitudes of the NRI’s of UAE and investment options in India”.
This analysis was carried out to give more knowledge and broader view to
the NRI's about the available investment options back home. As the NRIs
visit their home country only for a short period of time and mostly once in a
year, so they are not familiar and are also not well educated about the
various options in which they can invest in. Their attitudes towards
investments are guided by so many external factors and once they decide to
invest, the major problem starts with the lack of proper agency (financial
advisor/ consultant) to guide the investors according to their preference. If at
all the NRIs decide to invest, they take a risk of losing their hard earned
money.
Hence it is very important that the NRIs knowledge about the investment
options available in India are broadened and thus gaining a positive attitude
towards the investment alternatives.
QUESTIONNAIRE
Name:-
Age:-
Gender:-
1) What is your employment status?
o Salaried
o Professional
o Business
o Others
2) What is your estimated monthly income?
o Below AED 1,000
o AED 1,000 – AED 5,000
o AED 5,000 – AED 10,000
o Above AED 10,000
3) What is your purpose for savings?
o Children’s Education
o Growth Plan
o Retirement Plan
o Health care Expenses
o Home purchase
o Others
4) What are your investment portfolio objectives?
o Income and capital preservation
o Growth and Income
o Long-term growth
o Aggressive growth
Appendices 104
5) How frequently do you invest in India?
o Monthly
o Quarterly
o Half- Yearly
o Annually
6) Do you consult a Financial Advisor?
o Yes [ ]
o No [ ]
7) If Yes, with whose financial advice did you start your investment?
o Friends/Relatives
o Financial consultants
o Investment institutions
o Portfolio Department in Banks
8) Which of the following assets do you currently have, in your investment
portfolio?
o Bank deposits
o Post Office
o Shares/ Bonds/ Debentures
o Mutual funds
o Life Insurance
o Real Estate
o Gold
9) If you have invested in Shares, which of the below sectors of investment
avenues would be your preference?
o IT sector [ ]
o Textile sector [ ]
o Engineering sector [ ]
o Auto sector [ ]
o FMCG sector [ ]
o Chemical sector [ ]
o Pharmacy sector [ ]
o Banking sector [ ]
o Oil sector [ ]
Appendices 105
10) Rank the below investments according to your priority.
o Bank Deposits [ ]
o Post Office [ ]
o Shares [ ]
o Mutual Funds [ ]
o Life Insurance [ ]
o Real Estate [ ]
o Gold [ ]
11) Are you aware of the investment avenues as a NRI, please mark those products
you are aware of.
o Bank Deposits
o Shares/ convertible debentures/ non-convertible debentures
o Mutual Funds
o Bonds- invested out of NRE/FCNR/NRO
o Immovable Property
o Proprietary/ partnership concern in India
o Deposits in Indian Companies through NRO accounts
12) Which of the following options best describes your satisfaction level on the
investment made?
o Highly Satisfactory
o Satisfactory
o Unsatisfactory
13) What best describes your investment experience?
o Beginner (no investment experience)
o Moderately experienced investor (mutual funds and bank deposits)
o Knowledgeable investor (has bought or sold individual shares of stock
or bonds)
o Experienced investor (has traded stock options, exercised stock rights
or stock warrants)
14) What would be the extend of risk composition you would like to have in your
investment?
o Low Risk
o Medium Risk
o High Risk
Appendices 106
15) Do you Agree, Disagree, or Strongly Disagree with the following statement
“I’m comfortable with investments that may frequently experience large
declines in value if there is a potential for higher returns.”
o Agree
o Disagree
o Strongly Disagree
16) Rank the below factors which influence your investment decision?
o Safety [ ]
o Liquidity [ ]
o Regular income [ ]
o Capital appreciation [ ]
o High Return [ ]
17) Approximately, when do you plan to make your first withdrawal from your
investment accounts?
o Three – five years
o Six – nine years
o Ten years or mo