Moneycontrol Pro Panorama | Retail investors to get an overseas GIFT

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The Panorama newsletter is sent to Moneycontrol Pro subscribers on market days. It offers easy access to stories published on Moneycontrol Pro and gives a little extra by setting out a context or an event or trend that investors should keep track of.

Many efforts have been made to popularise the international financial services centre GIFT in Gujarat. Much of it has been in the institutional domain, but a new initiative spearheaded by the country’s top two stock exchanges will rope in domestic investors. The BSE and the NSE are both working on a platform that will allow domestic investors to invest in foreign stocks.

In recent years, the desire to invest overseas has risen, especially after the sharp rise in technology stocks listed in the US (nicknamed FAANG) even before the pandemic struck. The liquidity deluge post-pandemic lifted non-tech stocks as well. Seeing growing interest and risk appetite among domestic investors, stock brokers have been tying up with overseas entities and offering their clients an option to invest abroad. But the costs can be relatively high. Then, there are mutual funds too that have added overseas-listed stocks to some schemes or even overseas-focussed funds.

The new initiative makes it easier for domestic investors to trade in a basket of stocks and even other securities, with retail-friendly measures such as allowing investors to buy a fraction of a share. This lowers the minimum ticket size required to place an order, making it more accessible. To know more about what this initiative means, the lower transaction cost, how investors will benefit and the mechanics of it, do read our analysis of the proposal.

The timing is right as domestic appetite for equities appears to be in good health. Net inflows into equity mutual funds surged to a new high in July, with Rs 20,742 crore being added to the kitty of equity mutual fund schemes. SIP flows have regained ground after taking a hit during the pandemic. Funds are getting money in other schemes as well. For instance, Moneycontrol reported that arbitrage funds received a record Rs 14,924 crore of inflows, because of better post-tax returns being offered by them. Separately, Bloomberg reported that uncertainty over the RBI’s monetary policy stance is leading to higher inflows in shorter term funds, such as liquid and ultra-short duration funds.

More inflows naturally mean good news for asset management companies. In today’s edition, our research team writes on what sunnier days ahead for mutual fund schemes mean for shares of two listed asset management companies. Do read.

More investing insights from the research team

Berger Paints - Time to book profit?

Revenge travel is back – Which luggage stock to bet on?

Cadila: More a COVID hedge in the near term

Zee Entertainment: Despite slow recovery, an attractive bet on Indian OTT story

Power Grid Corporation of India: Earnings growth stable, valuation attractive

V-Mart Retail: Will the value retailer reach normalcy soon?

What else are we reading today?

Interview | We will do better than industry returns in green energy, says Prashant Jain, CEO of JSW Energy

SWAMIH’s lifeline to Amrapali shows way for other stranded housing projects

​The ideological origins of some numbers in economics

Investors need to evaluate the impact of a growing nationalism  (Republished from the FT)

Technical Picks:  Tata Steel, PowerGrid, PowerGrid and DLF

 (These are published every trading day before markets open)

Ravi Ananthanarayanan

Moneycontrol Pro