Indian investors’ appetite for overseas equity and debt continued to rise during the last financial year. No wonder brokers and mutual funds are cashing in on the opportunity. Broking firms are forging ties with global players to facilitate direct equity market transactions.
According to the Reserve Bank of India (RBI) data, investments in these two instruments have risen from $144.7 million in 2007-08 to $151.4 million in 2008-09.
Considering that the total investment in 2006-07 was a dismal $20.7 million, the rise is a whopping 631 per cent in the last two years.
Kotak Securities recently tied up with Saxo Capital Markets to offer overseas trading services to its clients while India Infoline tied up with Interactive Brokers. ICICI Securities already offers such a service in association with Penson Financial Services while Reliance Money has a tie-up with Options Xpress Holdings.
Mutual funds aren’t far behind. JP Morgan has launched Greater China Offshore Equity Fund and Reliance Mutual Fund has filed for Reliance International Fund.
Experts said the number of investors rose substantially after the Reserve Bank of India (RBI) raised the limit for international investment to $200,000 a year for individuals. They said there was potential for much more international investments.
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“We are seeing enough interest among clients. And it is not just the metros from where queries are coming. There are a lot of non-metros where clients are interested in investing abroad,” said Arindam Chanda, vice-president & head of products and marketing, Kotak Securities.
“There are investors who get Esops from MNCs and would like to exercise them. These investors are a part of our new clientele,” added Chanda.
Equities in particular have witnessed a lot of interest. “It was mostly equity as an asset class that received a lot of interest than debt. And it was mostly through mutual funds because there is an active fund management process. Also, an investor can monitor them regularly through ratings. Even commodity and gold exchange-traded funds were quite popular,” said Rajesh Saluja, CEO, ASK Wealth Advisors.