Exchanges need to change mindset: BSE chief

Calling for radical steps within stock exchange space, leading bourse BSE's chief Ashish Chauhan has said that the players in this business need to change their mindset and shift focus from trading revenues to give a boost to the capital-raising atmosphere.
At the same time, he also expressed optimism that Indian exchanges have a potential to become a major capital-raising avenue and can help attract a significant part of global funds, given the high return potential of Indian markets vis-a-vis losses suffered by investors in Chinese and other markets.
"There is almost USD 40 trillion worth money which is available in private hands and is in search of good returns and is looking for more safer harbours.

"India is slowly becoming a market which is attractive not only from return perspective but also from the investor protection perspective. That the Indian markets are now becoming top markets in terms of investor protection.
"However, exchanges would need to shift their mindset. We have to participate in India's growth and become a catalyst and growth engine or our economic growth story. We need to shift focus from trading to capital raising," Chauhan told PTI in an interview here.
"Today, a large portion of the exchanges' revenue come from trading, that is from transaction charges, and we need to focus now more on capital raising," he said.

Chauhan, CEO of Asia's oldest stock exchange which also happens to be the world's largest in terms of number of listed companies, is here to participate in various business meetings and investor roundtables in the backdrop of Prime Minister Narendra Modi's five-day US visit ending tomorrow.

"When Indian stock market automation happened 20 years ago, there was the hope that modern capital markets would bring more domestic investments into Indian markets and the household savings would be channelised into listed companies and those companies would create jobs and take forward our economy.
"But, in last 20 years, we have failed to raise the confidence of Indian investors, especially the retail investors, and because of that their numbers are almost same today," said Chauhan, who also happened to be part of the initial team of BSE's younger rival NSE when it was set up over two decades ago.

BSE's Chief Executive Officer said that although India has made huge strides in making its capital markets more transparent, fair and efficient, "We have somehow not created desired investor confidence because of which they have gone into gold, real estate etc."
"There are two aspects, both for retail and institutional investors. It is about their rights. When an investor invests in a company, the promoters also need to be made accountable for the rights of the minority shareholders.