The Young President’s Organisation (YPO), one of the world's most powerful network connecting over 20,000 chief executives from leading companies, has released a survey on business confidence. The organisation says that business confidence across world is at a stand still and in Europe, it has worsened.
Speaking to CNBC-TV18, Pashupati Advani, board member, South Asia, YPO says that corporate India’s level of confidence is on the rise and the minimum public float requirement will boost domestic investment-mood and attract higher FII inflows.
Below is the edited transcript of the interview on CNBC-TV18
Q: The news doesn’t look very good as far as business confidence is concerned. Europe down by about 4 points according to the YPO barometer…
A: Asia, on the other hand, has made up for more than the loss of confidence in Europe and flat world confidence at 60.4. We have been conducting this survey since 2009 and this is the 16th edition. Business confidence in Africa has turned out to be very exciting. Asian countries are also moving up and the big mover, though it is still below average, is Japan because the confidence is started to rise in Japan very rapidly because of the policies and leadership.
Q: What about India in specific?
A: Business confidence in India has remained reasonably flat and is slightly lower this time. But what is interesting about Indian business confidence is that CEOs are expecting to make fresh investment over the next 12 months — bear in mind this survey was conducted during the first two weeks of April. So, CEOs are looking to increase investment and sales for the FY14 fiscal without any significant change in hiring employees. Though the survey reveals tightening of the belt, there is an amount of confidence egging corporate India to make fresh investment.
Q: How do you expect global equities to perform?
A: Funds from all sources are flowing into the markets with Japan being recent driver of fund flow. Our survey shows that as people are willing to take risk they are going to make fresh investment in new capacities and India is one of the few countries that is going to attract those investments. The Indian economy actually benefits as commodities go down.
Q: Do you believe that FII flows will continue to be strong?
A: I am a firm believer in that thesis. It is the mega deals from multi-nationals are what will drive the India economy and domestic investment.
Q: As deadline for the minimum public float and the public shareholding requirement nears, there will be a host of companies issuing offers in the market. What will be the impact of this on the Indian market?
A: That will attract fresh investment as investors line up to participate in the growth of companies with a strong and proven track record.