Capital markets performed well despite global volatility: SEBI Chairman

Mumbai, December 7 The Securities and Exchange Board of India Chairman, Ajay Tyagi, has said that despite volatility in markets, domestic capital market has performed better than its peers.

He said that during the current year, global capital markets have been quite volatile, and is likely to remain so due to uncertain oil prices, shift towards more formal monetary policies by central banks across jurisdictions and US-China trade dispute.

These factors have also affected the Indian markets. “In terms of volatility and indices returns, Indian markets have not performed much worse. In fact, they have been better off when you compare with either major developed economies or emerging markets,” Tyagi said in a speech at CII financial markets summit on Friday.

Citing some data, he said in April-November, returns on Nifty had moved up by about 6.5 per cent. Although trailing the returns on Dow Jones (8 per cent), it is higher than the stock indices of other countries such as UK (-1 per cent), China (-18 per cent), Brazil (5.7 per cent) and Japan (4.5 per cent).

Volatility in Indian equity market at 12 per cent, during this period, is among the lowest compared to major developed and emerging markets like the UK (12 per cent), US (16 per cent), China (19 per cent), Japan (17 per cent), South Korea (14 per cent), Hong Kong (19 per cent) and Brazil (21 per cent).

During April-November, the rupee saw a depreciation of around 7 per cent against the US dollar, which is around the same level as that of Japanese yen (-7.3 per cent) but better than many other jurisdictions like China (-10.81 per cent), UK (-10.10 per cent), Europe (-8.73 per cent) and Brazil (-16.85 per cent).

Tyagi said on the domestic front, NBFCs and HFCs have been facing tight liquidity since September, though it has improved on account of RBI measures to provide systemic liquidity.

Later, he told presspersons that SEBI is also in talks with the mutual funds industry for changes post liquidity crisis. He also said the capital market has aided the growth of the country’s economy by providing much needed funds to the corporate sector.

Tyagi said that a record amount of Rs 8.8 lakh crore was raised from the domestic capital market during 2017-18 (through equity and debt) against Rs 7.7 lakh crore raised during 2016-17. In the current fiscal, Rs 4.85 lakh crore has already been raised.

He said that said the development of other alternative sources of funding like AIFs, REITs, InvITs and municipal bonds have also been gradually gaining prominence over time. There has been a spurt in AIF activities in the past two to three years, with the cumulative commitment going up by 117 per cent from March 2016 to March 2017 and further 96 per cent from March 2017 to March 2018.

During the same period, total funds raised have gone up by 80-108 per cent, respectively. Seven InvITs and two REITs have so far been registered with SEBI. Three of the registered InvITs have already issued and listed more than Rs 10,000 crore of units. Recently, one REIT has filed documents with SEBI to make an offer for more than Rs 5,000 crore of units.

Tyagi said that the capital markets regulator is in touch with market participants and if any further changes are warranted relating to REITs, InvITs, or municipal bonds, appropriate action would be taken.

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