The Hindu Business Line : Instil sense of security among investors, MFs told

Mr A.P. Kurian (right), Chairman, Association of Mutual Funds of India, with Mr S.C. Das, Executive Director, Securities and Exchange Board of India, at the national seminar on `Investment opportunities in mutual funds' at the Federation of Andhra Pradesh Chamber of Commerce and Industry in Hyderabad on Saturday. — A. Roy Chowdhury

Hyderabad , Aug. 28

REALISING that the contribution of the Indian mutual funds industry to the GDP is still inadequate, although far ahead of China, the Securities and Exchange Board of India (SEBI) has advised the industry to instil a sense of security and comfort among the investors community, especially the retail investors, for an accelerated growth.

According to the SEBI Executive Director, Mr S.C. Das, `lots of hopes were in the air' and the Government has been taking several steps to contain the inflationary expectations and ensure price stability. He hoped that the country would be on the right track attaining 7 per cent to 8 per cent growth.

Stating that growth and wealth creation would go hand in hand in dynamic economies, he said the capital market offers power to the growth cycle in any developed economy by enabling the retail investors to divert their small savings into the market.

Mutual funds play a key role in pooling the savings of the investors, Mr Das said.

Addressing a one-day national seminar on `Investment opportunities in mutual funds', organised by the Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI) here on Saturday, Mr Das said the mutual funds industry as at the end of July was having assets under management of over Rs 1,50,000 crore with the help of more than 400 varieties of schemes.

Terming the Indian mutual funds industry as one of the most innovative and active in the world, Mr Das said the SEBI was also proactive and ensured adequate regulatory framework in place, paving way for the healthy growth of the industry.

Stating that India is far ahead of China in terms of growth of financial markets, he said the biggest differentiator was that the equity culture in India was alive and active.

Explaining the measures being initiated by the Association of Mutual Funds in India (AMFI) on educating the investors, the AMFI Chairman, Mr A.P. Kurian, said the mutual fund industry was poised for a rapid growth with the help of tax sops announced by the Government in the recent Budget. Stating that the industry has been growing at a rate of 10 per cent to 15 per cent per annum on an average, he said the growth rate could be accelerated in view of the positive economic conditions.

Terming competition among mutual fund companies, with 27 players currently operating in the country, as the key for offering numerous benefits to the investing community, the Karvy Consultants Chairman and Managing Director, Mr C. Parthasarathy, said there were only seven asset management companies in the country that were having a market share of 5 per cent and above, indicating that level of competition. A number of mutual fund companies across the globe were keenly looking at Indian market as destination, he said.

Stating that the mutual funds in India accounted only for 1.7 per cent of the total financial investment compared to 60 per cent of household savings invested in mutual funds in the US, Mr Parthasarathy said it indicates the tremendous growth opportunities for mutual funds in our country.

Admitting that the debt funds were dominating the existing market, he hoped the industry would shift slowly towards the equity-based funds.

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