The stock market dominates news broadcasts across multiple television channels in the country. Though most Indians are not fully aware of the intricacies of stocks and trades, a good number of Indians are gradually waking up to the investment. People even remotely connected with stocks and trades are gradually turning towards equities and mutual funds.
Indians Have Yet to Embrace Equities
However, the percentage of the population in the country's equity markets is glaringly low. As of April 2015, there was less than 1.5% of the population investing in securities, while China had nearly 10% and US had 18% investing in securities. The number of people in India getting to know about the saving opportunities of equities is rising though. They are aware that equities are the investment option for beating inflation, and so investment is carried out as a means of rewarding savings, with many banks and financial institutions offering equity and mutual fund services and guidance. Still, only 2% of the household savings in India have been exposed to equity while the United States has a long-term average of 45%.
However, as mentioned before, people are now made aware by financial companies and advisors that equities actually provide returns in line with the GDP growth and inflation. India does recognize the need to channel a great number of household savings into equities since they are a great means of securing corporate finance, which can help pump up the Indian economy. The country needs to draw more household savings away from real estate and gold investments, which account for a significant percentage of local investments in the country but which are also unproductive for the economy.
The other issue facing the country is the lack of local funds in the equities market. In fact, foreign institutional investors account for around 70% of this market.
Online Trading Encouraging More Indians to Trade
A major factor contributing to Indians actually buying and selling stocks in an active manner now more than ever before is the rise of online trading. Online broker dealers are making trading more convenient for busy as well as retired professionals. With virtual money being offered, people can learn to trade. They are also offered resources to gain information about the market, the kind of stocks, and the kind of investing options on offer.
TradeZero is a reliable online broker dealer offering you everything you would need to begin trading in the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). Contact us at [email protected] for online trading through an interactive trading platform.
The content provided here is solely for informational and educational purposes and does not constitute an offer to sell or a solicitation to buy any security or instrument which may be referenced upon the site, or an offer to provide advisory or other services by TradeZero in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. Investors are advised not to rely on the information contained in this writing to make an informed investment or financial decision. TradeZero explicitly disclaims all liability for any action taken based on any information contained in this writing.