Tepid retail response to overseas trading

Brokerage houses are in a rush to facilitate trading by retail investors in overseas stock markets, but the response has been lukewarm so far.

Some portfolio managers said most retail investors are in no mood to invest money in other markets, especially in the US, at a time when the domestic markets are seeing a frenzied bull run. While the Dow Jones and Nasdaq have given a return of up to 16 per cent, the Sensex has given a return of 36 per cent in the past one year.

According to Shachindra Nath, group chief operating officer of Religare Enterprise, which has been offering the service to the Indian retail investors for over two years now the volumes have not really picked up.

"I don't see much of Indian retail investors actually opting to buy stocks from the US markets when the markets here are giving a good return," he said.

Religare Enterprises has tied up with Wallstreet E to offer overseas trading. While ICICIdirect.com, the online broking arm of ICICI Securities, recently tied up with Penson Financial Services to launch its overseas trading platform (for trading in US markets), Kotak Securities is likely to launch a tie-up with an international player to launch a similar platform.

Sources said hat through its trading terminal investors would be able to trade in stocks listed in 21 different countries.

In September, the Reserve Bank of India had hiked the annual individual ceiling for local citizens to remit money overseas from $100,000 to $200,000, offering opportunity to invest in stocks of global blue-chip firms, invest in property or spend more while travelling abroad.

Anil Kaul, director and CEO-Retail, ICICIdirect, however, said around 40 per cent of companies that are listed on the New York Stock Exchange are non-US companies.

Also, the market there is most liquid and Indian investors would like to diversify their portfolios.