SEBI chairman Ajay Tyagi on Thursday said there is an increased appetite for diversification by investors through investment abroad. The net inflows in dedicated overseas schemes of mutual funds this financial year till January is 9 times that of the corresponding period in the last financial year and 3 times compared to the entire last financial year.

“The interest appears to be only increasing over time, with around ₹5,000 crore of net inflows in such schemes in just the last two months- December and January. This appears to indicate an increased appetite for diversification by investors through investment abroad or a general increased interest in more global exposure,” Tyagi said while speaking at the National Institute of Securities Market (NISM) virtual conference.

Tyagi also has said that the new technology trends that have come into the stock markets post the Covid-19 pandemic are here to stay and problems of virtual meetings need to be addressed.

Virtual meetings: Key risks

“Virtual meetings have given rise to new concerns which were earlier not there in physical meetings. For instance, whether investor voices are adequately heard during virtual shareholder meetings, whether shareholders have sufficient opportunity to pose questions to the management, whether confidentiality and security concerns are adequately addressed in virtual board meetings, etc. These issues need greater study if such virtual meetings are to become a regular feature in the future,” Tyagi said.

Virtual AGMs became the norm since last year. Companies accustomed to holding large physical AGMs had to change their settings and the way they interacted with their investors. On the other hand, investors accustomed to attending physical meetings had to learn how to be tech-savvy, attend and ask questions during virtual AGMs. Apart from virtual shareholder meetings, virtual board meetings also became the norm since last year.

Online services: Here to stay

Intermediaries started offering more online services and replaced physical interactions with customers with virtual interactions. SEBI facilitated e-KYC for customers which enabled easier on-boarding access for new investors by intermediaries.

“I have already mentioned the increasing trend of virtual meetings, including eAGMs & e-Board meetings by companies. On the other side, more and more investors also moved from physical dealings to online dealings with the pandemic making physical interactions difficult. While a lot of these trends were thrust upon people due to the pandemic, many are likely to stay,” Tyagi said.

Interest rise for ESG schemes

Initially, at the beginning of the pandemic, there was a concern that climate change and environmental issues may be relegated to the background as the fund raising in itself was perceived as a challenge.

However, we can see that focus on ESG issues globally and in India has only increased in this financial year.

In line with the general global trend of ESG becoming more and more prominent for investors, Indian investors also showed increased interest in ESG investment.

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