rajeev@sfsup.UUCP (S.Rajeev) (02/07/86)
There is an interesting article in the Economist (25 Jan 86) about the Indian stock market. Excerpts follow (without permission): "Barefoot brokers: ... India has between 8m and 10m individual shareholders ... and they have done well recently. The Financial Express index of 100 quoted companies has more than doubled since the beginning of 1984, and has risen by 10% since December 20th. Foreign investors will sonn get their first taste of the Indian market through the launch, in March, of the India International Fund, a $60m investment trust managed by a large local unit trust and sold abroad by Merrill Lynch. ... the oldest bourse in Asia ... is far from decrepit. India's 14 stock exchanges list some 4,500 companies. Five of the exchanges have opened since 1982. At the end of 1985, the total market capitalization of all quoted companies was about 180 billion rupees - ($14.9 billion) - a bit less than ... [that for] Spain. ... Share prices have been swept upward by the new economic policies of ... Mr. Rajiv Gandhi. Tax sweeteners have helped too. Capital-gains tax on shares was cut in 1985, and the purchase of new shares made tax-deductible. The UP Stock Exchange Association reckons that 28% of private companies' total capital needs of $45 billion in the five years to March 1990 will be financed through the stock market. In the last nine months of 1985, $1.75 billion-worth of shares and debentures were issued. More than 130 firms obtained a listing in the same period. To discourage speculation, the Bombay Stock Exchange has just imposed margin requirements of upto 20% on dealings in 65 heavily traded shares. ... Margin calls were ... introduced to avoid a repetition of the events in 1980-81 when the market was rocked by the collapse of three stockbroking firms in quick succession. The government seems keen to avoid interfering with the bourse's success..." Sri Rajeev