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Monday, September 20, 2004

Indian retail investment market

Retail investors contribute to a group, where large chunk of funds are remaining untapped.

This can be proved from the TCS IPO, wherein in the market it was expected that maiximum money will pour in from the people who hold shares of other big IT companies like Infosys and Wipro. Taking note of the initial price at which TCS was offering its Re. 1 shares it was expected that they will sell their part of the existing shares and switch over to TCS.

But the analyst were proved wrong and most of the money which came in for subscribtion was fresh money from retail investors. This means that there is still a good demand for quality white paper. A whole lot of good money waiting to come in. Waiting for good value for the money.

I see now only two markets which can fetch you high returns. One is the stock market and other is the real estate market. Due to drastic drop in the interest rates people have no option but to enter this markets. Though stock market carries high amount of risk it also allows the investors with small sum to get higher returns.

A person having Rs. 1 lakh to invest cannot enter the real estate market with this sum. He is bound to enter the stock market, if he wants good return for his money.

Returns that stock market fetches is not only in terms of profit when you sell the equity, but also is in the form of dividend which is totally tax free. So this is one place which will attract good money in the future provided investors find good quality documents.

And it's a general law of economics that when the demand is high, prices are bound to increase. So in long term markets would draw much better picture.

If you are a smart investor start acting fast before the stock prices are out of reach and you do not want to miss the opportunity.

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