This refers to the editorial “Not a retail market” (June 9). It is not surprising to see that politicians, civil servants and some of the richest Indians prefer investing in real estate than in the capital market. The number of retail investors has been coming down for the past few years. The reason for this shift is that capital market investments – which can be made only through demat accounts – can be tracked and they are subject to Know Your Customer (KYC) norms. Also, real estate investments can accommodate any amount of black money. Of late, the tendency to invest in gold, silver and other commodities has also increased because the liquidity, returns and safety are comparatively higher.
Besides, there are no real incentives from corporations that can attract retail investors. Very few companies declare high dividends and bonus shares. Scams and window dressing of balance sheets by companies also have an adverse impact on the confidence of retail investors. One hopes your editorial will be an eye-opener for the authorities concerned and will urge them to take positive steps to attract retail investors back to the capital market.
T V Gopalakrishnan, on email
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