There are various factors, domestic and international which are extremely important and will determine the market trends for the coming year like Global market movements; strengthening of US dollar (USD) as well as Reserve Bank of India's (RBI's) action on interest rates and visible improvement in corporate earnings at the domestic level. Also overall positive shift in terms of Global markets will surely benefit the Indian equities market too.
The primary market segment more specifically the IPO (Initial Public Offering) is expected to have good movement in the year 2015 following the good secondary market growth as well positive investor's sentiments.
The role of market regulator is also very important for the growth of a nation's capital market. SEBI, lately as a proactive regulator, has cracked down heavily on errants without any fear. Lots of actions have been taken against large entities mobilizing illegal money as well as and further serious investigations as well as stringent actions are being taken cracking down entities involving into market manipulations as well as black money mobilization into the capital markets. The quantum of penalties too have been increased many folds.
The stricter regulated regime ensures investor confidence and will improve in building the domestic capital market wherein the retail investor had almost vanished in the past few years. Though a very balanced approach is needed from the regulator so as not to shun away the corporates and market intermediaries with unwarranted controls and stringent provisions.
In addition to stricter regulatory regime, the new regulations like SEBI (Foreign Portfolio Investors) Regulations 2014 (FPIs), SEBI (Real Estate Investment Trusts) Regulations 2014 (REITs), and SEBI (Infrastructure Investment Trusts) Regulations 2014 (InvIT) are few more welcome steps. Though FPIs regulations were introduced in January 2014 itself and have resulted positive movement in the market, more benefit may be expected in the year 2015.
Likewise the REITs and InvIT only got sanctioned in the later end of the year 2014 and is expected to see more movement in the year 2015. In addition to these, the SEBI regulations of Alternate Investment Funds (AIFs) introduced in the year 2012 have also gained much momentum over the past years with already almost 120 AIFs registered. The easy fund raising tool from uncaptured HNIs will surely continue to attract attention from the industry as well as investors (both foreign and domestic) and have positive impact on the market.
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On the whole, lots can be expected in the New Year from the Capital market not only in terms of index movements and tradings but also in terms of primary fund raising as well as new fund raising vehicles like AIFs; REITs and InvITs. With stable polices, positive sentiments and overall growth in the economy Capital Markets are also expected to continue with their growth spurge.
In 2014 the mid-and small-cap indices have been even better performers with the S&P BSE Mid-cap index gaining almost more than 50% and the S&P BSE Small-cap index rising as high as around 70%.
The Securities & Exchange Board of India (the Capital Market Regulator) in January 2014, came out with new Regulations i.e. SEBI (Foreign Portfolio Investors) Regulations 2014, thereby clubbing together the Foreign Institutional Investors (FIIs), Sub-Accounts and Qualified Foreign Investors.
As per the statics available, foreign investors (FPIs) have invested around $42 billion* in the Indian capital markets from January 2014 to December 2014.
So as to the debt equity ratio; $26.4 billion have been invested into the debt market and $16.40 billion were invested into the equities markets.
The stable Government and investor friendly reforms and strong positive sentiments can be attributed to the steep increase in the foreign investments in the Capital Market.
During the Calendar year 2014 around RS.39, 127 Crore were raised in the Public Equity market. In the funds so raised, the substantial raising had been through QIPs with almost Rs.31,684 Crore being raised from institutional investors(almost 81% of the total fund raised in the Capital Market).
Offers for Sale through Stock Exchanges (OFS) dropped to merely Rs. 5,000 Crore in the calendar year as compared to the past year.
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