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Introduction
The Indian equity market has emerged as the third biggest after China and Hong Kong in the emerging Asian region, with a market capitalization of nearly $600 billion, as per the Asian Development Bank report of April 2009. For the first time in the history of Indian stock market, in 2007 the market capitalization crossed the trillion dollar mark. Indian securities market has one of the largest numbers of listings and trading takes place in about 2700 stocks. It is also one of the few markets with extensive dematerialization of shares and the settlement cycle (T+2) is on par with global standards.The Indian equity market has emerged as the third biggest after China and Hong Kong in the emerging Asian region, with a market capitalization of nearly $600 billion, as per the Asian Development Bank report of April 2009. For the first time in the history of Indian stock market, in 2007 the market capitalization crossed the trillion dollar mark. Indian securities market has one of the largest numbers of listings and trading takes place in about 2700 stocks. It is also one of the few markets with extensive dematerialization of shares and the settlement cycle (T+2) is on par with global standards.
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Indian Equity Market Statistics
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As of 31st March |
| 2004-05 |
2005-06 |
2006-07 |
2007-08 |
| Number of Intermediaries |
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| FII's |
685 |
882 |
997 |
1319 |
| Portfolio Managers |
84 |
132 |
158 |
205 |
| Mutual Funds |
39 |
38 |
40 |
40 |
| Trends in Net investments (Rs bn) |
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| FII's |
458.8 |
414.7 |
308.4 |
661.8 |
| MF's |
4.5 |
143.0 |
90.6 |
163.1 |
| Turnover (Rs bn) |
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| NSE Cash |
11401 |
15696 |
19453 |
35510 |
| BSE Cash |
5187 |
8161 |
9562 |
15789 |
| NSE Derivatives |
22562 |
43055>
| 63707 |
113692 |
Source : Securities and Exchange Board of India
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The Indian equity markets have delivered strong positive returns in the last 7 years. From January 2002 to December 2008, the Nifty index went from 1,075 to 2,959, giving compound returns of 15.6% pa. From January 2002 to December 2008, the Nifty Junior index went from 1,349 to 4555, giving compound returns of 19% pa.
Improving macroeconomic fundamentals, a sizeable skilled labour force and greater integration with the world economy have increased India’s global competitiveness, placing the country on the radar screens of investors the world over. This can be seen from the number of FII’s registration which has increased from 685 in FY05 to 1319 in FY08. Their net investments also grew from Rs458.8bn to Rs661.8bn in the same period. While MF’s transaction through stock exchanges have grown at a CAGR of 231.4% from Rs 4.8 bn to Rs 163.1 bn.
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