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India's economy may witness 9 trends this year
By siliconindia
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Friday, 02 January 2009, 23:28 IST
Bangalore: Investors are trying to shrug off the annoying memories of 2008, a year when the Sensex registered its worst performance ever, shedding more than half its value. But market experts say 2009 will have something in store for investors, reports Business Standard. According to the experts, this year will see nine trends in the countries economic scenario.
Insurance and banking sectors to spark a rally
While insurance could be the big story of the year, as some private insurance companies are expected to make their debut in the equity market, any recovery in banking stocks - something that is widely expected - will send a clear signal that the worst may be over.
New routes of fund-raising
As raising money through traditional routes is becoming difficult, companies will be looking at newer routes. In the first quarter of the calendar year, at least six companies are exploring the option of issuing a combination of warrants with non-convertible debentures (NCDs) as it will help companies to avail funds at a cheaper rate. Earlier, warrants used to be issued through preferential allotment or public issues, but with the recent relaxation, companies will be able to reap benefits of both bonds and warrants simultaneously.
Indian benchmark indices to be more popular in abroad
The NSE's Nifty futures trading in Singapore is a perfect example of the benchmark indices becoming popular abroad. Some more products based on Indian stock indices are set to be launched on overseas exchanges. Apart from NSE's Singapore futures, Exchange Traded Funds (ETFs) based on Nifty are traded on the London Stock Exchange, Lyxor, Borsa Italiana and Deutsche Borse.
Foreign firms will raise funds via Indian Depository Receipts (IDRs)
Global Depository Receipts and American Depository Receipts have become popular instruments for Indian companies to raise money overseas. Foreign companies have been allowed to raise money from India by issuing ID
Though no company has come forward so far, there are indications that Standard Chartered may emerge as the first foreign entity to float an IDR issue.
Screen-based trading of MFs' units
A new system that will be implemented soon will enable MF units to be traded on exchanges, or investments can be made through internet with an option to receive and make online payments. This can save time and cost and the liquid schemes of mutual funds can be used like a bank account.
OTC products also on screens
Futures trading on interest rate will be the next screen-based products to be introduced. Interest rate futures are set to be launched in the early part of 2009. The success of currency futures will tempt regulators to introduce screen-based trading for over-the-counter market products such as currency forwards and overnight interest rate swaps.
NSE and BSE will see competitors
The Bombay Stock Exchange and the National Stock Exchange will no more be dominant players as at least two stock exchanges are expected to come up this year, depending on regulatory approval. The aspirants are Reliance Money and Financial Technologies.
Exchanges for SMEs
The difficulty of small and medium enterprises in getting cheap access to capital, is set ease with the emergence of SME Exchanges. Three companies are now awaiting the market regulator's approval for this.
Improved equity cult
The Securities and Exchange Board of India (Sebi) has appointed New Delhi-based economic think tank National council of Applied Economic Research (NCAER) to do a survey on the reasons for the low level of household investments in equity. Sebi is expected to take some concrete actions after NCAER submits its findings.
Though no company has come forward so far, there are indications that Standard Chartered may emerge as the first foreign entity to float an IDR issue.
Screen-based trading of MFs' units
A new system that will be implemented soon will enable MF units to be traded on exchanges, or investments can be made through internet with an option to receive and make online payments. This can save time and cost and the liquid schemes of mutual funds can be used like a bank account.
OTC products also on screens
Futures trading on interest rate will be the next screen-based products to be introduced. Interest rate futures are set to be launched in the early part of 2009. The success of currency futures will tempt regulators to introduce screen-based trading for over-the-counter market products such as currency forwards and overnight interest rate swaps.
NSE and BSE will see competitors
The Bombay Stock Exchange and the National Stock Exchange will no more be dominant players as at least two stock exchanges are expected to come up this year, depending on regulatory approval. The aspirants are Reliance Money and Financial Technologies.
Exchanges for SMEs
The difficulty of small and medium enterprises in getting cheap access to capital, is set ease with the emergence of SME Exchanges. Three companies are now awaiting the market regulator's approval for this.
Improved equity cult
The Securities and Exchange Board of India (Sebi) has appointed New Delhi-based economic think tank National council of Applied Economic Research (NCAER) to do a survey on the reasons for the low level of household investments in equity. Sebi is expected to take some concrete actions after NCAER submits its findings.