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| Large players dominate more in US mkt than India: NSE to PMO |
| Press Trust of India / New Delhi Aug 27, 2010, 18:31 IST |
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Debunking a campaign that stock market was the playfield for a select few, India's largest bourse Natinal Stock Exchange (NSE) has said that the country was way behind the US in terms of large investors or brokers dominating the bourses.
Seeking to set the record straight in the face of a "misleading" campaign, NSE CEO & MD Ravi Narain has written to the Prime Minister's Office and other authorities stating that the bourse was working hard to create an awareness and rope in retail investors to the extent possible.
The letter follows reports suggesting that Indian stock market was shallow and trading was largely concentrated among a few large investors, which started flowing in after the government earlier this month informed the Parliament about trading pattern at NSE in first quarter of 2010-11.
The Parliament was informed that the top 25 trading members of NSE accounted for 42 per cent of cash equity and 43 per cent of equity stock derivatives turnover in the period.
Facing allegations that it was not doing enough for growth of capital markets beyond large investors, NSE, according to sources, informed the authorities that over one-third of taxpayers were participating in the market through it.
In the letter, also addressed to officials in Finance Ministry, Planning Commission, Sebi and RBI among others, Narain has said that large players' dominance in Indian markets was less than developed markets such as the US also.
NSE is the country's top stock exchange in terms of trading volumes, while its older rival BSE comes a distant second in terms of business size despite having larger number of listed companies.
NSE has been accused of being monopolistic by its new rival MCX-SX, which is fighting a legal battle against market regulator Sebi over delay in approval to begin stocks trading.
In his letter, Narain said that it had submitted the data on trading activity in response to a question by a Member of Parliament, but some misleading reports have "selectively quoted data from the above submission to try and denigrate the growth and development of capital markets in India."
On the contrary, NSE said, it was taking various steps to bring in retail investors from across the country and has succeeded to a large extent in these efforts.
"In India, about 3.3 crore people paid income tax for the financial year 2008-09. Of these, a remarkable 1.2 crore people invest through the NSE," Narain said, adding that it was also being ensured that "right kind of money is invested in the markets by people who can afford to do so."
Besides, a large number of retail investors participate in markets indirectly through mutual funds and insurance schemes, NSE said, adding that "LIC, one of the most trusted icons of the middle class, invests through the NSE."
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