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'India's economic fundamentals still strong'
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SME Times News Bureau | 05 Oct, 2020
Despite Covid-induced moderation, India's economic fundamentals remain
strong, thereby retaining investors' interest, contended the chief of
the Bombay Stock Exchange.
In a conversation with IANS, BSE MD
and CEO Ashishkumar Chauhan pointed out that rising investor
participation in the equity segment along with recent industrial
recovery trends clearly show the resilience of the Indian economy.
"Overall,
I believe that despite a moderation caused by the Covid-19 pandemic,
the fundamentals of Indian economy remain strong and GDP growth is
expected to rebound from the second quarter of FY 2020-21," Chauhan
said.
"Indian government is seen not only as reformative, but
transformative in approach, as seen by the recent farm and labour bill
enactments. Foreign investors, in my view, are focussed on such
reforms."
According to Chauhan, India's economy has shown signs
of stability in the last few months with manufacturing and services
gradually improving even as coronavirus cases escalated across the
country.
"Activity in India's dominant services sector is picking
up and manufacturing has bounced back into expansion due to government
push after four successive months of contraction," he said.
"So
clearly the real economy is on the path of recovery, as the markets have
indicated. It is early days to predict full recovery but current
indications are good."
Besides, he cited that in the last 1 year, BSE brokers have opened 1.5 crore investor accounts.
In the last 6 months alone, more than 80 lakh investor accounts have been opened on BSE.
Consequently, the stock exchange major has reached a landmark of 5.47 crore investor accounts registered on its platform.
"The
number of people trading in Indian markets increased initially due to
the lockdown. So effectively, we see a lot of people coming into the
market not only for equities but for the trading part of it because
people are sitting at home and want to trade," Chauhan said.
Besides,
he pointed out that organised markets' ability to provide instant
liquidity is one of the core reasons for continuance of their operations
despite the lockdown.
"The government did not force the markets
to close which allowed people who were in need of funds to sell their
assets like stocks or mutual fund units, collect their money, use it for
other purposes and that would not have been possible if we had closed
down the markets," he explained.
"So, there is a tremendous trust
that has been built up in terms of the market's ability to provide you
liquidity albeit at a lower price. Even if the market asset prices had
gone down, they also started going up."
Furthermore, he
elucidated that India has been a preferred destination of Foreign
Institutional Investors over the past few months.
Since the FII outflows in March, the following six months till September 2020 has seen net inflows of over Rs 21,000 crore.
India
has continued to receive FII inflows, whereas emerging market peers
recorded outflows. For instance, South Korea FII outflows stood at $2.3
billion and that of Taiwan at $2.2 billion.
In terms of IPOs
hitting the market in FY21, Chauhan predicted that offerings this year
are expected to be more than last year's listings and amount raised as
stock markets are flush with liquidity.
"Several firms had to
keep their IPOs on hold due to lockdown curbs, which have hit the
markets as the lockdowns have eased," he said.
"As long as
pricing remains fair, public confidence in the IPO market will be there,
which in turn will increase the prospects of upcoming IPOs. It will
also be crucial for companies to showcase their resilience to the
pandemic and how they adapt to the emerging situation."
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
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64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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