Retail investors' participation in equity market surges: SEBI chief
newsd , Jul 22, 2020
Despite Covid-19 pandemic, there has been a surge in participation of retail investors in the equity market over the last few months, SEBI Chairman Ajay Tyagi said on Wednesday.
Addressing the FICCI's 17th Annual Capital Market Conference ‘CAPAM2020’, he said: “The fact that there is also a surge in opening up of demat accounts suggests that many of these retail investors are perhaps first-time investors in the stock market.”
On the theme of ‘Aatmanirbhar Bharat: Role of Capital Market’, Tyagi said: “With a view to facilitating a smooth and welcome entry of these newcomers to the capital markets, it would be ideal that they begin their journey by first investing in risk free G-Secs.”
“The issuance of G-Secs in demat form, apart from easing the process of making investments by non-institutional participants in these securities, may also facilitate easier raising of borrowings.”
On improving the corporate bond and G-Secs market, he said that there is an inter-linkage between them.
“The required reforms in the corporate bond market should be brought in without any further loss of time,” he said.
“Unification of financial markets is an idea whose time has come.”
Besides, Tyagi said that the market infrastructure for corporate bond and G-Secs markets should be integrated.
He contended that having two separate ecosystems results in artificial segmentation of investors and divergent governance and regulatory norms for institutions in the two markets performing similar functions.
Highlighting the potential of the Indian financial market, Tyagi said that it is geared up to aid the country achieve the $5 trillion economy mark.
“The revival of the stock market and an uptick in fund raising by the corporates is encouraging.
“I exhort the captains of the industry to come forward and make bold investment decisions, and contribute towards building an Aatmanirbhar Bharat.”
Acknowledging that the country is passing through a difficult, stressful and challenging time due to the Covid-19 outbreak, he said that to provide relief to the affected companies, SEBI has issued a number of relaxations to facilitate fundraising by the corporates.
“SEBI has come out with relaxed norms for preferential issue pricing and exemption from open offer for eligible stressed companies. These relaxed norms, finalised after wide public consultation, can be used for restructuring of stressed companies without going through the IBC process. Of course, the guidelines have due safeguards built-in to prevent misuse,” he added.
To achieve global scale, Indian banking sector needs to implement Fintech: Chief Economic Adviser Dr Krishnamurthy Subramanian