The Hindu Business Line : Retail investors

This refers to the article “Stock market on a high: Lack of euphoria, a sign of maturity” (Business Line, July 4).The quietness evinced by the market players itself negates any unnaturalness in the index surge.

No doubt, the market is on its way to 15000 plus. But it is sad to note that the retail players find themselves stranded, mostly because many cut short their positions earlier due to volatility. Only a few dared make fresh investments. Despite this, it is a relief to note that the market does not overreact on promising moves. Definitely, it is a sign of maturity amidst growth. But the low volumes traded should be a matter of concern for technical analysts with regard to sustenance of the levels.

It is at this point that SEBI and the market players should turn more attention to small investors. More friendly measures must be put in place to attract small investors. The portfolio management schemes can be redesigned to benefit small investors. The present minimum investment, fixed at Rs 5-10 lakh, is on the high side. SEBI could consider lowering it at least to Rs 2 lakh, with a minimum lock-in period of one to three years.

Many new investors wait for the right opportunity to enter the stock market for fear of technicalities and lack of knowledge. The PMS and mutual fund routes would be ideal for such newcomers.

The SEBI decision to insist on PAN cards for MF investors from next year would discourage many. AMFI should put up the case strongly before SEBI, so that the interests of small investors are protected. The decision that those who open Demat accounts must have PAN cards is ideal, but it would not be fair to harass mutual fund investors, in the larger interest of the small investors, as they do not interfere directly in the trade.

C. P. Velayudhan Nair Kochi

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