The bull phase in financial markets is due to India coming out of the pandemic in an effective manner, and is not limited to the country, Securities and Exchange Board of India Chairman Ajay Tyagi said.
“It is not just India which has been witnessing such unprecedented market movements but similar trends have been seen across many global markets - movements one can very clearly attribute to effects arising out of the pandemic and the efforts to tackle the pandemic,” Tyagi said.
Tyagi was speaking on February 25 at the National Institute of Securities Market on the Behaviour of Securities Market - Sighting of Black Swan Event.
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On the RBI governor’s comment on the disconnect between financial markets and the economy, Tyagi said it is “yet another occurrence witnessed in today’s times which possibly has no precedent before.”
Referring to the increasing participation of individual investors in the market, Tyagi noted that the share of institutional investors, corporate and partnership firms in total turnover this financial year has gone down by around 8.3 percent, and correspondingly, shares of individuals and proprietary traders have gone up by a similar percentage.
Increased participation of individuals can also be seen in the rise in the number of demat account holders, Tyagi said. From around 4 crore demat accounts as of March 31, 2020, the total number has already crossed 5 crore, he added.
Tyagi also noted that inflows in Systematic Investment Plans (SIPs) had been decreasing. This, he said, could be indicative of a trend of individual investors using funds previously being dedicated for SIPs to invest directly in the market or in other assets such as debt or real estate or even holding on to cash to wait for market corrections.
The Sebi chairman said foreign portfolio investor (FPI) behaviour had changed drastically after the pandemic. FPIs have already made a net investment of more than $35 billion in this financial year in Indian equity markets which is the highest in any financial year to date, he said.
Tyagi also said there is a healthy pipeline of public issues lined up which are expected to come out in the coming months.
