Comments
Mutual funds have emerged as a new and an important ‘counter balance’ to foreign portfolio investors (FPIs) in Indian capital markets, SEBI Chairman UK Sinha said.
The new development being noticed in the Indian capital market was discussed at the post-Budget meeting that Finance Minister Arun Jaitley had with SEBI Board members on Saturday.
Briefing mediapersons, Sinha said that SEBI’s efforts to energise the mutual funds industry has started paying dividends.
“Inspite of the fact that global factors have affected most emerging markets, Indian markets have held up. One important factor is mutual funds contribution,” Sinha said.
The heartening fact is that when FPIs have been selling from May 2015 last year, it is the domestic mutual funds industry that has been absorbing 70-80 per cent of the supplies, said Rajeev Agarwal, a SEBI whole-time member.
“Mutual funds are emerging as new and strong counterparty in Indian markets,” Agarwal said.
Sinha noted that net total equity outflows from FPIs this fiscal stood at $4 billion. On the other hand, overall money flowing into mutual funds industry grew to ₹2.07 lakh crore this fiscal, from a level of ₹1.03 lakh crore in 2014-15.
Sinha highlighted that SEBI had in 2012 taken a number of measures so as to encourage more participation in mutual funds industry.
“We had also allowed extra expense if they were going beyond the top 15 cities. The encouraging thing is inflows from beyond top 15 cities have increased. Their percentage in overall inflows has also increased,” Sinha said.
Jaitley's advice During his interaction with SEBI board members, Jaitley advised SEBI to remain alert on the supervision of the market keeping in mind the impact of global developments.
The Finance Minister called upon SEBI to expand investor base by improving ease of doing business in the securities market through KYC simplification by use of technology.
Jaitley felt this process could be expedited now that the Aadhaar Bill has been passed (by the Lok Sabha).
He also appreciated the emergence of mutual funds as a counter balance to foreign portfolio investors.
Commodity derivatives Jaitley stressed the need for introduction of new products in the commodity derivatives market. He felt that actual hedgers need to be encouraged to take benefits of the commodity derivatives market.
The SEBI chief said that several measures will be rolled out this year in the commodity derivatives market both in terms of new products and for increased participation.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.