NSE-GOVT Large players dominate more in US mkt than India: NSE to PMO

New Delhi, Aug 27 (PTI) Debunking a campaign that stock
market was the playfield for a select few, India's largest
exchange NSE has said that the country was way behind the US
in terms of large investors or brokers dominating the bourses.
Seeking to set the record straight in the face of a
"misleading" campaign, NSE CEO & MD Ravi Narain has written to
the Indian Prime Minister's Office and other authorities
stating that the bourse was working hard to create an
awareness and rope in retail investors to the extent possible.
The letter follows reports suggesting that Indian stock
market was shallow and trading was largely concentrated among
a few large investors, which started flowing in after the
government earlier this month informed the Parliament about
trading pattern at National Stock Exchange in first quarter of
2010-11.
The Parliament was informed that the top 25 trading
members of NSE accounted for 42 per cent of cash equity and 43
per cent of equity stock derivatives turnover in the period.
Facing allegations that it was not doing enough for
growth of capital markets beyond large investors, NSE,
according to sources, informed the authorities that over
one-third of taxpayers were participating in the market
through it.
In the letter, also addressed to officials in Finance
Ministry, Planning Commission, Securities and Exchange Board
of India and Reserve Bank of India among others, Narain has
said that large players' dominance in Indian markets was less
than developed markets such as the US also.
NSE is the country's top stock exchange in terms of
trading volumes, while its older rival Bombay Stock Exchange
comes a distant second in terms of business size despite
having larger number of listed companies.
NSE has been accused of being monopolistic by its new
rival MCX Stock Exchange, which is fighting a legal battle
against market regulator SEBI over delay in approval to begin
stocks trading.
In his letter, Narain said that it had submitted the data
on trading activity in response to a question by a Member of
Parliament, but some misleading reports have "selectively
quoted data from the above submission to try and denigrate the
growth and development of capital markets in India."
On the contrary, NSE said, it was taking various steps to
bring in retail investors from across the country and has
succeeded to a large extent in these efforts.
"In India, about 3.3 crore people paid income tax for the
financial year 2008-09. Of these, a remarkable 1.2 crore
people invest through the NSE," Narain said, adding that it
was also being ensured that "right kind of money is invested
in the markets by people who can afford to do so."
Besides, a large number of retail investors participate
in markets indirectly through mutual funds and insurance
schemes, NSE said, adding that "LIC (Life Insurance
Corporation), one of the most trusted icons of the middle
class, invests through the NSE." MORE PTI