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Transcript
Empowering the Retail Investor
Ajit Dayal
Chairman,
Quantum Information Services Limited
Your money matters!
• Household savings,
+23% of GDP, Rs
5,533 bn (US$ 118
bn)
• Corporate savings,
+4% of GDP, Rs 895
bn (US$ 19 bn)
• Government savings,
- 1.1% of GDP, minus
Rs 253 bn (minus
US$ 5 bn)
July 7, 2003
100%
80%
60%
40%
20%
0%
Households Corporates
PSUs
-20%
The Investor Empowerment
Programme, GIWA
2
Money flows into shares and
debentures declining.
• Household sector put
less money in
financial assets
• Within financial sector
the household sector
put less money in
shares and
debentures
20.0%
15.0%
10.0%
5.0%
1982-86 1987-91 1992-96 1997-01
July 7, 2003
The Investor Empowerment
Programme, GIWA
3
New products and channels for your
investment flows
• Directly into stock markets
• Mutual funds: equity, debt, balanced
• Insurance policies: new companies, some
product changes
• Bank deposits: new banks, new products
July 7, 2003
The Investor Empowerment
Programme, GIWA
4
You make people rich!
• Mutual funds control approx Rs. 1,034 bn,
(Rs 103,400 crores) a 1% average fee to
the fund manager gives the AMC revenues
of Rs. 10 bn (Rs 1,000 crores) every year!
• Trading volumes of avg Rs. 40 bn (Rs
4,000 crores) per day generate broking
commissions of approx Rs. 26 bn (Rs
2,600 crores) every year!
July 7, 2003
The Investor Empowerment
Programme, GIWA
5
Do they make you rich?
(Sensex)
6,000
5,000
4,000
3,000
2,000
Jul-93
July 7, 2003
Mar-95
Oct-96
Jun-98
The Investor Empowerment
Programme, GIWA
Feb-00
Oct-01
Jun-03
6
At the very least, do they provide you
with a service?
• Educate – help make an informed decision
• Discuss alternatives that benefit you
• Advise, based on your situation, not theirs
July 7, 2003
The Investor Empowerment
Programme, GIWA
7
Scams, scams, and more scams….
•
•
•
•
•
•
•
Murarka Finance, 1987
Mazda Leasing and Mehta, April 1992
Morgan Stanley Mutual Fund, April 1994
tMt = TNT, 1999 – 2000
Mastershare and UTI 1988 – 2002
??
You choose the alphabet, there is a
“scam” around it…..
July 7, 2003
The Investor Empowerment
Programme, GIWA
8
Greed: Two hands to clap!
• The financial “services” industry wishes to
make quick money,
• Investors wish to make “quick” profits,
• Greed on both sides
• Invest, do not speculate!
• The regulator will try to help you but will
fail! – by definition has to fail (SEC in USA,
SIB in UK, SEBI in India)
July 7, 2003
The Investor Empowerment
Programme, GIWA
9
Therefore…
• Keep your money at home, under a
mattress?
• Step out into the world with realistic
expectations – don’t be greedy
• Select a product or advisor that works for
your long term benefit, not for a short term
return or fee
• Buyer beware!
July 7, 2003
The Investor Empowerment
Programme, GIWA
10
“Tip” of the day…
Information => Power
+
Discipline
+
Patience
=
Returns
July 7, 2003
The Investor Empowerment
Programme, GIWA
11