Indian markets outperform China on returns over last 5 yrs : Sebi official

Market returns: While making the point on Indian equities that have delivered an enviable 15 per cent CAGR in the last five years, far outperforming Chinese markets that have delivered returns near zero and even negative in Hong Kong, Sebi Whole-time Member Ananth Narayan G, in his recent speech had stated FY24 would be remarkable.

Speaking on the occasion of Investor Awareness Week at the National Stock Exchange, Narayan described FY24 as a "remarkable" year for India. The benchmark indices were up 28 per cent, returning just 10 per cent volatility. He called this the "sone pe suhaga" of high returns with low risk.

Be Aware of Complacency

Despite such positive trends, Narayan advised caution on investors' part, and the mantra of these extraordinary returns might lead to complacency. He underlined how the demat account opening by young investors was surging and brought into focus the need to educate them for the impending risk level as it is intrinsic to the market.

With a driving analogy, he underlined the mood saying that just as one has to accelerate the investment it is the time also to apply brakes in case it is needed. It was a matter of balance in the market force dynamics.

Balance Market Force End

Says Narayan, only at the small and mid-cap end is where 40% have quintupled in value over the last five years, largely being an imbalance between inflows and the new issuance of stocks. To overcome this, Sebi is streamlining fundraising processes for a steady supply of quality securities into the market.

Long-Term Growth Prospects

Narayan appeared sanguine about the medium- and long-term growth prospects of Indian markets and seemed to be in tune with optimistic economic prospects. He was advising investors to seek the services of credible intermediary agents while being cautious to keep at arm's length the unregistered 'finfluencer' whose intentions would hardly be pure.

Investment Advice

As is said, "all roads lead to Rome," Narayan said not all roads will lead you to a haven and spoke of the need to look for sound advice. He appealed to investors to trade less and to sustain a more long-term investment policy where studies show returns are much better. Though Sebi accepted the fact that there is also an element of speculation and short-term trading, Narayan asserted that the onus of knowing the risks lies within the domain of the investors.