association of national exchanges members of india · 2014-12-16 · 2. association of national...

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Association of National Exchanges Members of India


India Market ReportAsia Securities Forum

18th Annual General Meeting, 2013

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India: About ANMI

ANMI was formed in year 1994.

It is a pan India body comprising of the trading members of NSE,BSE and MCX-SX spread across the country.

The basic objective of the Association is to work for thedevelopment of the Capital Market, safeguard and overall interestof investors and its members at large.

ANMI is an effective voice of its members, which communicatesthe industry standpoint on issues affecting Capital Markets.

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India: GDP Growth

India is among the fastest growing countries of the world.

Currently at lowest growth in a decade.

India has grown at an

average rate of 8% since FY06.

FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13

9.5% 9.6% 9.3%

6.7%

8.6%9.3%

6.2%5.0%

Source: RBI

FY14 GDP is expected to be

5.5%.

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India: Economic Performance

The International MonetaryFund (IMF) has estimatedIndia's economic growth to be5.6 percent in 2013.

In its latest World Economic Outlook (WEO) released, the IMF said that world economic growth rate would be 3.1 percent in 2013 and 3.8 percent in 2014.

India's growth forecast for 2014 is 6.3 percent by IMF.

IMF world economic outlook

Projected 2013 GDP(%)

Projected 2014 GDP(%)

World 3.1 3.8

Japan 2 1.2

China 7.8 7.7

India 5.6 6.3ASEAN 5 5.6 5.7

US 1.7 2.7Euro Area -0.6 0.9

Russia 2.5 3.3

Lat. America & Caribbean 3 3.4

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India: Economic Performance

Inflation- Cooling off

Healthy Savings Rate

456789

(%)

WPI

WPI

99.510

10.511

11.5

Aug-

12

Sep-

12

Oct

-12

Nov

-12

Dec

-12

Jan-

13

Feb-

13

Mar

-13

Apr-

13

May

-13

Jun-

13

Jul-1

3

(%)

CPI

CPI

Source: RBI, MOSPI

Particulars (as % of GDP) FY09 FY10 FY11 FY12 FY13

Gross Domestic Saving 32.0% 33.7% 34.0% 30.8% 31.0%

CAD 2.3% 2.8% 2.7% 4.2% 4.8%High CAD a concern.

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Capital Market Performance

Source: Yahoo Finance

India’s NIFTY index has performed better as compared to other broad market indices from other Asian countries

Performance of Asian Indices

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India: Business Growth in Capital Market

Derivatives Segment

Currency Derivatives

Source: BSE, NSE, MCX-SX,SEBI

Till Aug 2013

Till 4 Sep 2013

Till July 2013

Cash Segment

0

20

40

60

2009-10 2010-11 2011-12 2012-13 2013-14

Rs.

Tril

lion NSECM

BSECM

0

100

200

300

400

2009-10 2010-11 2011-12 2012-13 2013-14

Rs.

Tril

lion NSEFO

BSEFO

0

20

40

60

2009-10 2010-11 2011-12 2012-13 2013-14

Rs.

Tril

lion NSECD

MCX-SX CD

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Indian Stock Exchanges offer Cash & Derivatives in Multiple Asset Classes…

Asset

Classes

EquityDerivatives

Capital Markets

Other Markets

Other Derivatives

Stock Futures

Stock Options

Index Futures

Index Options

Currency Futures and OptionsInterest Rate Futures

SLBS

DebtMarket

MFSS

Equities,Debt, ETFs,

Mutual Funds

IPO

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Investor Protection: India vs. other EMs

Parameters India China Brazil Russia

Protecting Investors (Rank) 44 93 74 93

Extent of Disclosure Index (0-10) 7 10 6 6

Extent of Director Liability Index (0-10) 4 1 7 2

Ease of Shareholder suits index (0-10) 7 4 3 7

Strength of Investor Protection Index (0-10) 6 5 5.3 5

India has outperformed other BRIC countries persistently over the past 5 years.

India beats the South Asia & East Asia average of 5 and is equal to the OECD average of 6.

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India: Capital Market-Volume Ranking

Rank by Number of Trades in Equity Shares (Jan-Aug 2013)

Source: WFE

Exchange ('000)

1 National Stock Exchange India 977574

2 Shenzhen SE 839538

3 NYSE Euronext (US) 806604

4 NASDAQ OMX 754428

5 Shanghai SE 740540

6 Korea Exchange 729492

7 Japan Exchange Group - Tokyo 408497

8 BSE India 216065

9 TMX Group 162626

10 London SE Group 144413

Electronic Order Book Trades

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India: Volume Growth in Capital Market

Number of Trades in Equity Shares

Source: WFEElectronic Order Book Trades at NSE

Equity volume growth of

16.2% CAGR since 2004

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

1800000

2004 2005 2006 2007 2008 2009 2010 2011 2012

In th

ousa

nds

Equity Volume at NSE

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India: Recent GOI Economic Policy Announcements/Legislations

Food Security Bill- Biggest programme in the world to fight hunger covering 67% of India’s population.

New Company’s Act to improve transparency and accountability in the companies.

Land Acquisition Bill seeks to fast track industrial growth and provide fair & just compensation to farmers.

Pension Bill to promote pension sector in India.

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India: Anticipated Impact of Reforms on the Indian Economy

Generating positive sentiment.

Boost for Commercial, Trading and Industrial activities.

Building Investor Confidence, both Domestic and Foreign.

Improve sentiments in the Capital Market including Investors.

Return of Retail Investors in the Capital Market.

Increase in Revenue Growth.

Increased Employment generation.

Meeting a GDP Growth target of about 5.5% for 2013-14.

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India: FII Inflows

Source: SEBI-500,000

0

500,000

1,000,000

1,500,000

FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13

Rs.

Mill

ion

Equity Debt

FII flow in India into Equity has grown at a healthy CAGR of ~30% since FY02.

FII flow into Debt has grown at a CAGR of ~40% since FY02.

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India: Foreign Exchange Reserves

Over a period of time India has built healthy forex reserves.

Source: RBI

FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13

4355

76

113

142 152

199213

248275

310 312286

Foreign Exchange Reserves (USD Bn)

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India: Strengths

Growth is driven to a significant extent by domestic consumption.

Stable Financial System and regulatory framework.

Strong demographic advantage.

Good growth prospects supported by ongoing economic liberalization

and strong domestic demand.

Vibrant, transparent and high-yielding capital markets.

Strong and competitive private sector .

Healthy sectoral diversity of economy.

Educated work force

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India: Challenges of Indian Economy

Achievement of inclusive growth.

Containing Current Account Deficit.

Providing basic facilities in semi – urban, rural and under-developed areas.

Ensuring proper delivery of subsidies and other benefits to the targeted group without leakages.

Speedy implementation of major infra projects across Country.

Enhance sentiment for investments by both domestic and foreign parties for speedy approvals.

Providing required infrastructure for growth and expansion of Industries, Finance Market, Capital Market etc.

Clear long term policies to bring in confidence in major investors both domestic and global.

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India: Challenges of Indian Capital Market

Vibrate the scenario subdued due to both Domestic and Global trends.

Respond positively to the recent GOI policy initiatives.

Focus towards building investors /retail investors confidence in the

Capital Market.

Endeavoring global standards of governance in operations.

Resolving concerns of Market Intermediaries.

Ensuring compliance of Regulatory Measures .

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India: Destination India for Growth

Huge untapped Market.

Rising Per Capita Income.

Economy Being further liberalized.

Good infrastructure.

Effective Regulatory Framework.

Supportive administrative machinery.

Vibrant financial system.

Developed capital Market.

Educated and cost effective work force.

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India: ANMI Future Roadmap

BE A STRONG BODY REPRESENTING market Intermediaries.

Positive and proactive role in Capital Market.

Earn trust and confidence of Government / regulators & investors.

Co-ordination with other trade bodies / institutions / exchanges

nationally as well as internationally.

To become an SRO.

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Presentation by Dr. RMCV Prasada Rao – President ANMI

Email: [email protected]: www.anmi.in

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