Low rates of interest, ample liquidity behind elevated investor curiosity: Sebi chief

Sebi Chairman Ajay Tyagi on Thursday stated prevailing low rates of interest and ample liquidity are main components for elevated investor curiosity and any tightening of liquidity or improve in rates of interest would influence the market.
“Prevailing low interest rates and ample liquidity availability aren’t the only reasons for this increased investor interest in securities market in India; though one cannot deny that they are major factors and any tightening of liquidity or increase in interest rates would impact the market,” the Securities and Exchange Board of India (Sebi) chief stated on the NISM capital market convention.
According to Tyagi, it additionally must be acknowledged that by their very nature, the markets are forward-looking and the current investments keep in mind future progress prospects. “Add to this, the regulator’s effort in terms of continuous dialogue with stakeholders to bring in required regulatory changes, rationalising procedures and maintaining trust in the market,” he added.
Tyagi stated the cumulative variety of whole demat accounts rose from 41 million in the beginning of FY21 to 55 million by the top — a rise of 34.7 per cent. On a mean, about 1.2 million new demat accounts have been opened per thirty days in FY21 as in comparison with 0.42 million per thirty days within the previous fiscal. “The trend gets further accentuated during the current financial year — on an average, 2.45 million demat accounts have been opened per month during April- June 2021,” he stated.

“Along with the robust growth, it is heartening to note that our markets are entering a new era with several new age tech companies preferring to list domestically. Our markets offer as attractive a fund-raising proposition as any overseas market,” Tyagi stated. Recent filings and public choices replicate the maturity of the market to just accept the enterprise mannequin of latest age tech corporations, which aren’t amenable to valuation by means of standard metrics of profitability, he added.

Successful IPOs of such corporations are prone to entice extra funds in home markets, thus creating a brand new ecosystem of entrepreneurs and buyers, he stated.
The Sebi chief additionally acknowledged that preliminary share-sales, REITs (actual property funding trusts) and InvITs (Infrastructure funding trusts), ESG (atmosphere, social and governance) themed mutual fund schemes and exchange-traded funds (ETFs) have caught the flowery of retail buyers.