I wrote a column in the Financial Express today about the first signs of life in stock lending. This is one of the last building blocks of the ecosystem of the equity market.
Also see: Mobis Philipose in Mint on 13 September.
Friday, October 01, 2010
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Now we are going to have license raj in Mutual funds
ReplyDelete‘AMFI will try to develop a MF policy for the country’
http://www.hindustantimes.com/business-news/interviewsbusiness/AMFI-will-try-to-develop-a-MF-policy-for-the-country/Article1-606607.aspx
Your Thoughts.......
"India is unusual by world standards in having achieved success with stock futures at NSE."
ReplyDeleteIsn't this because STT and commissions are lower for futures than for equities?
Isn't it also because shorting stock directly is not as easy? And, if it were the case, the stock futures market would be unnecessary (and which is why other markets don't need this market)?
On the one hand you say that futures give true symmetry, yet on the other hand you acknowledge that you need stock lending mechanisms otherwise corrections in stock futures are hard to correct. So, looking at it backwards, what you really need for the symmetry is being able to short stock as easily as going long (and equal commissions, settlement or stocks and futures_ and you wouldn't need the individual stock futures market?
Something wrong with the above?
i complete agree with you, but there is another facet to this situation.. stock ledning is poor here for one reason that we have single stick futures, whcih are not there in devleoped markets. and worse part is people are still under invested in india so there is no chance for new stories being followed by people.. everybody is inetrested in over researched stocks and stories.. this is an irony, but if common people doesnt come into it by directly investing in stocks or emerging funds things wil not change.. options which are more secure for investors are also not sought after product here in terms of stock. we are still long way to go... stock lending is a strucural issue, but apart from that there are many other things in broking business which needs to be improved to make common investor inetrested in market.
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