 is being celebrated in India from October 14-20, 2024){kind=link}
As per an authentic source, the Securities and Exchange Board of India (SEBI) shares that the Indian markets offered better returns than China, in last 5 years.
What is SEBI?
The SEBI is a regulatory body established by the Indian government in 1992 to protect investor interests and regulate the securities market.
This year, World Investor Week (WIW) is being celebrated in India from October 14-20, 2024. Securities and Exchange Board of India (SEBI) is the national coordinator for celebrating WIW-2024 in India. Investors are invited to participate in various investor awareness activities like Quiz and other contests, Investor Awareness Programs, etc.
WIW is an initiative of the International Organization of Securities Commissions (IOSCO) is a global investor awareness campaign. WIW is celebrated every year, across the world, by the securities market regulators. The week witnesses a host of investor awareness activities across the globe and the investors are explained about the importance of investor education and protection.
SEBI whole-time member, Ananth Narayan G shares that Indian equities have consistently delivered 15 percent returns, in contrast to China, which has given zero or negative returns.
Calling out the Indian markets in an idiomatic way as “Sone pe Suhaga”, while describing it as delivering higher returns for lower risk, Narayan cautioned the investors about a few areas and asked them to be cautious of the risks.
Addressing the ‘Investor Awareness Week’ at NSE (National Stock Exchange), Narayan said, “It’s like the best of all worlds: low risk and very high return.” He underlined that there are side effects of this as well.
“There’s a lot of talk about China markets over the last few days. But over the last five years, while Indian markets have given around 15 percent compound annual growth rate consistently, Chinese markets are nowhere close to that. It’s almost zero. In fact, in some cases, like in Hong Kong, it’s actually negative,” he said.
Mr. Narayan further added that FY24 was a “remarkable” year for India, with the benchmark indices returning 28 percent and the volatility just 10 percent. However, Narayan made it clear that investors should not assume it to be a one-way street, and it might not be the same in the future. He highlighted that such attractive returns can foster complacency and currently there is a trend of many young people opening demat accounts to jump on the bandwagon.
Citing the example of driving a car, the SEBI member emphasized on educating people about risks, “There has to be a light push on the accelerator to get more investors to provide risk capital for the economic growth, we also need to be aware of risks and use the brakes if need be.”
Due to an imbalance between inflow of investor money and supply of new paper, he said, in the last 5 years, 40 percent of the small and midcap scripts have shot up by 5 times.
The market regulator is making efforts to ensure that fund-raising approvals are done on time, so there’s a steady supply of quality investments in the market.
Advising investors, Narayan said that in a broader, longer-term perspective, Indian markets are expected to soar further prompted by economic growth prospects in the country.
Investors should not pay heed or fall for unregistered self-proclaimed influencers, who might be driven by vested interests, instead they need to have the right intermediaries to capitalize on this opportunity presented by India.
He also stressed the need for investors to seek guidance from trustworthy sources. He said that studies prove that in order to gain higher returns, investors should trade less and stay invested for longer.
Talking about Sebi’s recent action on certain trading areas like derivatives, he said that the market regulator is not against speculation of participants taking short-term trades, but it would want investors to understand the risks.
SEBI regulates Indian financial market through its 20 departments. SEBI has enjoyed success as a regulator by pushing systematic reforms aggressively and successively. It is credited for quick movement towards making the markets electronic and paperless. SEBI has also been active in setting up the regulations as required under law. It did away with physical certificates that were prone to postal delays, theft and forgery, apart from making the settlement process slow and cumbersome, by passing the Depositories Act, 1996.
SEBI has also been instrumental in taking quick and effective steps in light of the global meltdown and the Satyam fiasco. In October 2011, it increased the extent and quantity of disclosures to be made by Indian corporate promoters. In light of the global meltdown, it liberalized the takeover code to facilitate investments by removing regulatory structures.
SEBI has to be responsive to the needs of three groups, which constitute the market: issuers of securities, investors and market intermediaries.
The Preamble of the Securities and Exchange Board of India describes its basic functions as “…to protect the interests of investors in securities and to promote the development of, and to regulate the securities market and for matters connected there with or incidental there to”. SEBI is managed by its board of members, which consist of the following people: The chairman, who is nominated by the Union Government of India. Presently, Ms. Madhabi Puri Buch is the Chairperson, SEBI.
Two members from the Union Finance Ministry and one member from the Reserve Bank of India. The remaining five members are nominated by the Union Government of India, and out of them at least three should be whole-time members. And, Ananth Narayan G is one of the whole-time members of SEBI.
The Securities and Exchange Board of India (SEBI) was first established in 1988 as a non-statutory body for regulating the securities market.
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