The Hindu Business Line : ‘Financial super-markets, boutique investment outfits will survive’

Upbeat on investments: Ms K. Kamala, Vice-President, National Stock Exchange, flanked by Mr C. S. Nanda (Left), Council Member and Chairman, Committee on Financial Markets and Investors Protection, ICAI, and Mr P. R. Agarwal, President, Bharat Chamber of Commerce, at the conference on “Indian Capital Market- Vision 2010” in Kolkata on Saturday. —

Our Bureau

Kolkata, July 14 Financial super-markets and boutique investment outfits will both survive in the Indian market, thanks to growing demand for their services.

Players in each group will, however, have to offer certain special services in order to ensure their sustained presence in a competitive environment, said Ms K. Kamala, Vice-President, National Stock Exchange, here on Saturday. She was addressing a meeting organised by ANMI and ICAI here on Saturday.

The comment may be seen in the backdrop of growing competition among securities broking companies, thanks partially to foreign players who have trooped to India in recent years.

“There has been a lot of demand for investments. Many of the foreign companies that are coming here are very strong, both financially and operationally,” she said, adding that all interested parties should come together in order to make the capital market a safer place, especially so for the common investor.

Commenting on the current stature of the Indian market, she underlined the importance of becoming competitive in the global context. The structure of world markets has changed considerably in recent times, thanks to developments such as de-mutualisation and moves by leading stock exchanges to take stakes in other bourses, she said.

A very small fraction of the country’s population participates in the market actively, and it is necessary to ensure that more sections become involved in it. However, this will also imply that investors’ expectations should be met adequately. Creation of a larger talent pool is also critical, she said while referring to the growing needs of investors. The latter, she noted, will need critical information in order to do well in the market.

At the moment, there are “large gaps” in their understanding. These have to be bridged in the best manner possible, she added.

The NSE Vice-President underscored the need to view the capital market in an integrated manner – not in isolation or simply in terms of transactions.

“Mere execution of orders is not sufficient. What is needed is value-addition. Investors need more than just buying and selling of securities,” Ms Kamala said, while referring to the current practice by investors of approaching a wide range of players for various services. The reference was to different banks, brokers and insurance companies that investors are often required to go to.

Integration of services, however, will require capital. Therefore, players willing to integrate their services may well have to consolidate their operations. Such consolidation will also allow them to compete more effectively, she said.

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