Aim At Wooing Nri Bucks, Damani Tells Sebi

It is time to tap the non-resident Indian investments rather than bend backwards to draw foreign institutional investor (FII) support for the capital markets. This is the message that the Bombay Stock Exchange (BSE) has placed before the market regulator to improve fund inflows.

BSE president M G Damani, who recently toured the US and the south-east Asian markets to study the depository systems, has in a recent meeting with Sebi chairman D R Mehta, suggested that efforts should be made to remove bureaucratic hurdles so that NRI investments can come in.

Damani also met finance ministry officials last week to urge for streamlining of the process to help such investment inflow.

 

The markets require support at this stage. And FIIs may not be able to provide the prop, Damani told Business Standard.

We have over-stretched ourselves in a bid to draw the FIIs. It is time to tap the NRI segment when they are keen to invest. If the process is delayed and local market conditions change, NRIs may re-think their move, he said.

At his meeting with the Sebi chief, Damani has suggested that focus should be on the UK-based NRIs also, besides those in Hong Kong, Singapore, Japan and US.

Damani said the image of the Indian markets has undergone a sea-change with trading going on-line at several exchanges, surveillance/monitoring strengthened, settlement cycles toned up and price rigging reduced.

Further, with the depository system taking shape, the NRIs are keen to invest, he said.

He said NRIs in these countries had taken advantage of the boom at the US markets. These people were provided with stock options (which they exercised) and with the concentration strong in software/technology stocks, their surplus income rose and credit lines improved, Damani said.

The stock markets in recent weeks have witnessed low trading volumes with consolidation set to take place at the 3700-3800 levels for the BSE Sensex.

The FII emerging market fund allocations (for India) are not likely to be high and with political uncertainty still large over the horizon, the domestic markets are looking for some factor to provide the necessary boost in trading.