MCX Indian_Equity_Investors_Survey_2010

INDIAN EQUITY INVESTORS SURVEY 2010

Information Innovation Education Research

- Dr. Ranjan R. Chakravarty Head, Research & Product Development, MCX Stock Exchange

Highlights:

Huge potential for market penetration, development and financial inclusion

Financial education for better awareness and Competition for greater benefits

Mobile phones are the preferred channel for equity investing

Concise Report

- Survey conducted by The Nielsen Company

MCX Stock Exchange Ltd.Exchange Square, Suren Road, Andheri (East), Mumbai 400 093, India. Tel: +91-22-6731 9000, Fax: +91-22-6731 9004.

Email: [email protected] Website: www.mcx-sx.com MCX

-SX/

Oct

ober

201

0IE

IS-C

R/

In alphabetical order

SHAREHOLDERS

Project Leader: Dr. Ranjan R Chakravarty, Head, Research & Product Development, MCX Stock Exchange

Project Team:Project Coordinator: Arbind Kumar, FRM, Research & Product Development, MCX Stock ExchangeProject Associate: Sooraj Rao, Research & Product Development, MCX Stock Exchange

Research Team:Research Coordinator: DG Praveen, Research & Product Development, MCX Stock ExchangeResearch Associates: Kaveri Deshmukh and Chaitanya Wangikar, Research & Product Development, MCX Stock Exchange

Communications Team: Amrita Nanavaty, Rini Mukherjee and Mohmad Shaikh, Communications, MCX Stock Exchange

Survey Team:The Nielsen Company

Acknowledgements:We are grateful for the support of Mr. Joseph Massey, Managing Director & CEO, MCX Stock Exchange, for the entirety of this project. We also gratefully acknowledge the contribution of Dr. Bandi Ram Prasad, President, FT Knowledge Management Company, Mr. U. Venkataraman, Executive Director, MCX Stock Exchange, Mr. Sanjit Prasad, Director, Business Development, MCX Stock Exchange, Mr. G. Sankaranarayanan, Sr. Vice President, Marketing and Business Development, MCX Stock Exchange, Mr. Saji Cherian, Head, Corporate Services and Market Development, MCX Stock Exchange, Ms. Latika Kundu, Head – Market Operations, MCX Stock Exchange, Mr. Setu Shah, Sr. Vice President, Communications, MCX Stock Exchange, and Ms. Jyoti Rai, former Vice President, Marketing and Business Development, MCX Stock Exchange. We thank each one of them for their suggestions and support, which have been critical for this project.

Indian Equity Investors Survey 2010

www.m x-sx.comc 24

Board Of Directors & Advisory Board

! Mr. Ashok Jha, IAS (Retd.) Chairman, Former Finance Secretary

! Mr. Jignesh Shah, Vice Chairman, Chairman & CEO, Financial Technologies (India) Ltd.

! Mr. Joseph Massey - MD & CEO

! Mr. V Hariharan - Director

! Dr. Nitish Sengupta, IAS, (Retd.) - Director, Former Revenue Secretary and Member Secretary, Planning Commission

! Mr. Atul Rai - Director, CEO & Managing Director, IFCI Limited

! Mr. Vepa Kamesam - Director, MD, Institute of Insurance & Risk Management, Hyderabad and Former Dy. Governor, RBI

! Mr. S S Thakur - Public Interest Director, Former Chairman, Central Depository Services (India) Ltd. and Founder Chairman, HDFC Bank Ltd

! Mr. C M Maniar - Public Interest Director, Senior Partner, Crawford Bayley & Co

! Mr. B D Sumitra - Director, Former Managing Director, CCIL and Former Deputy Managing Director, SBI

! Mr. C VR Rajendran - Director, General Manager - Corporation Bank

! Mr. V K Khanna - Director, General Manager - Union Bank of India

! Mr. P K Chhokra - Director, General Manager - Punjab National Bank

! Mr. A A Badshah - Director, General Manager – Bank of India

! Mr. U Venkataraman - Executive Director

! Mr. G N Bajpai, Chairman of Advisory Board, Former Chairman, SEBI & LIC

! Mr. Venkat Chary, IAS (Retd.), Former Chairman, Forwards Markets Commission (FMC), Former Secretary to the Chief Minister of Maharashtra

! Mr. A V Rajwade, Risk Management Consultant- Forex, IRD, Derivatives; Formerly with SBI

! Mr. Ganesh Rao, CEO, IBS Forex LtdFormer Chief Trader, FX, Bank of America

! Dr. L. C. Gupta, Director, SCMRD Former Member, SEBI

! Mr. Jamal Mecklai, CEO, Mecklai Financial

! Mr. Naresh Deshpande Former Principal Legal Advisor, RBI

! Mr. Paul Joseph, IES (Retd.), Principal Advisor, Former Principal Advisor, Planning Commission

2010

INDIAN EQUITY

INVESTORSSURVEY

BOARD OF DIRECTORS

ADVISORY BOARD

About MCX Stock Exchange

MCX Stock Exchange (MCX-SX), India’s new stock exchange, commenced operations in

the Currency Derivatives Segment on October 7, 2008 under the regulatory framework

of Securities & Exchange Board of India (SEBI) and Reserve Bank of India (RBI).

A new generation stock exchange, MCX-SX offers a world-class electronic platform for

trading in currency futures contracts and is currently the market leader in this segment.

Clearing and settlement is conducted through the MCX-SX Clearing Corporation Ltd.

(MCX-SX CCL).

Since inception, MCX-SX has been spearheading financial literacy and financial

inclusion in India, as is envisaged by the Govt of India. The Exchange has been the first

in India to unveil various revolutionary practices for currency price dissemination and in

spreading financial literacy in India. MCX-SX, till now, has conducted more than 400

investor education programmes across the country, averaging at least one per working

day, and has roped in a wide array of partners like the media, educational institutions,

trade bodies and international organisations to jointly promote financial literacy and

introduce global best practices in India.

True to its philosophy of ‘Systematic Development of Markets through ‘Information,

Innovation, Education and Research’, MCX-SX endeavours to ensure continuous

innovation and to introduce various new products under the extant regulatory

framework. The Exchange is poised to commence Equity segment and Equity Futures &

Options segment on receiving regulatory approvals. Besides, it is also committed to

expand its product offerings to include other asset classes such as Debt, Interest Rate

Futures, Index Funds and Exchange Traded Funds and SME segment securities, on

receiving regulatory approvals.

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15. Corporate Investors: Drivers to Increase Investments in Equity Market

Notes

Refer Table 46 of Indian Equity Investors Survey 2010

0 50 7525

Improve the aspect of regulatory regime 59

Improve the trading and settlement operations 51

Develop high market volume and liquidity 49

Promote competition in exchange sector that leads to better service 44

41Improve disclosure standard 41

Emphasise on the diversity of the firms listed 39

Greater use of technology 39

Better capitalised members 29

Permission for OTC products 7

15More innovative products

Survey Report2010

INDIAN EQUITY

INVESTORSSURVEY

www.m x-sx.comc1

Growth over last decade

GDP

314%

Market Capital788%

Population117%

Exchange turnover

1488%

INTRODUCTION TO INDIAN EQUITY INVESTORS SURVEY 20101 2India's GDP in 2001 was US$ 414 Billion with a population of 1 Billion . Over this decade, as at 3 42010, the GDP stands at US$ 1.3 Trillion and India's estimated population is 1.173 Billion . This

dramatic growth has reflected itself in the Indian equity market, whose market capitalization 5 6stood at about US$ 165 billion in 2001 and has increased to over US$ 1.3 Trillion in 2010.

Note that in 2001-02, there were 21 regional stock exchanges across India in addition to 2 national exchanges. Of these 23 exchanges, 16 exchanges conducted active transactions. In 2008-09, the active exchanges had been reduced to 4.

Turnover Velocity as a measure of market liquidity shows turnover as a percentage to market capitalization. The following table highlights the comparative lack of liquidity in the Indian equity market.

Table 1: Total Turnover (Cash & Derivatives Segments) across stock exchanges: 2001-09

Stock Exchange

Ahmedabad Bangalore Bhubaneshwar Calcutta Cochin Coimbatore Delhi Gauhati Hyderabad ISE Jaipur Ludhiana Madhya Pradesh Madras Magadh (Patna) Mangalore Mumbai NSE OTCEI Pune SKSE Uttar Pradesh Vadodara

2001-02

14,844 70 -

27,075 27 -

5,828 -

41 55 -

857 16 24 - -

309,314 615,092

4 1,171

- 25,237

10

2004-05

- - -

2,715 - - - -

14 - - - -

27 - -

534,8293,687,125

---

5,343 -

2008-09

- - -

393 - - - - - - - - - - - -

1,112,343 13,762,505

- - -

89 -

1.48 0.007

- 2.71

0.0027 -

0.58-

0.004 0.01

- 0.09

0.0016 0.0024

- -

30.94 61.53 0.0004

0.12 -

2.52 0.001

` Crores % Share ` Crores % Share ` Crores % Share- - -

0.064 - - - -

0.0003 - - - -

0.0006 - -

12.6487.16

- - -

0.13 -

- - -

0.0026 - - - -- - - - - - - -

7.4892.52

- - -

0.0006 -

This dramatic increase in market value ought to have been consistent with increase in market development and penetration. However, we observe that this is not the case.

If we examine the distribution of turnover from 2001 to the present, we in fact see evidence of concentration across regions and cities with turnover being consolidated across two exchanges in Mumbai.

The following tables provide evidence.

Source: SEBI Handbook 2009, Table 18 & 26

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13. Corporate Investors: Barriers to Investing in Stock Market


47Too much price fluctuation

32Lack of information about investment in equity

26Investing in equity (shares) is very risky

26It does not give guaranteed returns

21I would not get loan against a equity (shares) investment

16I have had a bad experience in equity (shares) in the past

11There are too many products that confuse me

11I don't know where to buy equity (shares) from

11Never approached by a broker/investment advisor

11Lack of access to trading on the stock exchange

0 5025

14. Corporate Investors: Scope for Improvement in Indian Equity Market

5 (Maximum scope of improvement) 1 (Least scope of improvement) 2 3 4

Innovations 2 2 20 41 34

Bureaucracy among exchange personnel 5 20 61 15

Technology 5 12 51 32

Accounting standard 2 27 39 32

Exchange as facilitator 32 46 22

Transperancy 5 24 41 29

5 2 22 44 27Transaction cost

2 5 20 41 29Financial intermediaries

2 2 32 41 22Risk management

7 17 49 27Market penetration

5 27 41 27Clearing services

24 51 24Banking services

0% 20% 40% 60% 80% 100%


Survey Report2010

INDIAN EQUITY

INVESTORSSURVEY Introduction

2010

INDIAN EQUITY

INVESTORSSURVEY

Hyderabad

Rajkot

Cochin

Baroda

Bangalore

Jaipur

Indore

Coimbatore

Mangalore

Ludhiana

Kanpur

Patna

Pune

Gauhati

Bhubaneshwar

Others

Sub-total

City

2.85

0.29

0.79

0.62

2.79

1.16

1.08

0.6

0.12

0.53

0.95

0.11

1.03

0.12

0.07

12.51

25.62

2001-022.25

0.32

0.64

0.71

1.67

1.17

0.98

0.46

0.08

0.43

0.4

0.1

0.75

0.02

0.02

9.44

19.44

2004-051.73

1.28

0.76

0.7

0.62

0.56

0.49

0.33

0.22

0.17

0.07

0.03

0.03

0.01

0

5.7

12.7

2008-09Kolkata

Pune

Indore

Bangalore

Chennai

Kanpur

Cochin

Hyderabad

Baroda

Ludhiana

Gauhati

Patna

Mangalore

Coimbatore

Bhubaneshwar

Others

Sub-total

City

0.84

0.6

0.18

0.3

0.16

0.26

0.27

0.13

0.54

0.01

–

–

–

0.04

–

9.83

13.16

2001-020.96

0.63

0.46

0.74

0.4

0.44

0.12

0.2

0.02

0.34

0.06

0.07

0.07

0.06

0.02

11.44

16.03

2004-050.79

0.68

0.6

0.5

0.39

0.33

0.29

0.29

0.28

0.07

0.06

0.06

0.03

0.02

0.01

10.96

15.36

2008-09

NSEBSE

BSE

Mumbai

Ahmedabad

Rajkot

Delhi

Jaipur

Sub-total

City

84.01

0.97

0.32

1.31

0.23

86.84

2001-0275.33

3.14

1.71

3.05

0.74

83.97

2004-0572.4

4.76

3.76

2.85

0.86

84.63

2008-09Mumbai

Delhi

Kolkata

Ahmedabad

Chennai

Sub-total

40.2

19.4

9.15

2.49

3.56

74.8

47.39

14.92

12.46

2.91

2.88

80.56

55.85

14.97

9.24

5.27

1.97

87.3

City 2001-02 2004-05 2008-09

Table 2: Monthly Turnover Velocity across the World’s Stock Exchanges, January through August 2010

23.5%

70.1%

205.5%

395.6%

180.8%

239.1%

384.0%

117.1%

India

China

Taiwan

Korea

USA

Bombay SE

National SE India

Shanghai SE

Shenzhen SE

Taiwan SE Corp.

Korea Exchange

NASDAQ OMX

NYSE Euronext (US)

16.6%

51.0%

97.9%

194.4%

81.1%

152.7%

356.5%

125.4%

19.2%

57.0%

168.6%

345.1%

135.4%

171.7%

337.9%

124.7%

17.9%

54.1%

207.5%

447.2%

147.9%

188.6%

350.9%

132.1%

17.0%

57.4%

148.9%

285.2%

124.4%

190.3%

510.1%

183.3%

17.3%

54.9%

111.6%

263.8%

105.5%

162.8%

407.5%

160.8%

17.1%

53.9%

129.9%

281.1%

132.7%

173.5%

348.9%

137.2%

20.1%

58.4%

181.5%

377.6%

164.0%

161.9%

332.5%

125.8%

January2010

Country Exchange February2010

March2010

April2010

May2010

June2010

July2010

August2010

Source: World Federation of Exchanges

NSE

Table 3: Market Penetration: 2001 to 2009 City-wise Distribution of Turnover (Cash Segment) (in %)

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Furthermore, we note that over 80% of the turnover in India continues to come from the top 5 cities, a further indication of concentration, as Table 3 below demonstrates.

Source: SEBI Handbook 2009, Table 24

Above 80%Equity Turnover

in India continues to come from Top

5 cities

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11. SME Investors: Drivers to Increase Investments in Equity Market


0 5025

67Improve the regulatory regime

46Improve trading and settlement operations

41Promote competition in exchange sector that leads to better service

39Greater use of technology


12Permission for OTC products

1Easy operating system


Improve disclosure standard 52




Transaction cost

Financial intermediaries

Risk management

Market penetration

Clearing services

Banking services

0% 20% 40% 60% 80% 100%

3 10 22 38 23

4 4 26 39 20

1 9 14 45 23

1 3 23 39 26

3 1 22 43 20

1 3 19 29 42


12. Corporate Investors: Investment in Different Instruments

0 50 7525

67Net Capital Market

Insurance 67

Equity/shares 57

Mutual Funds 52

Bank FDs 50

Debentures 20

Government Securities 15

Commodities 15

Real Estate 13

Refer Table 40 of Indian Equity Investors Survey 2010% of Corporate investing

CORPORATE INVESTORS

Introduction2010

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INVESTORSSURVEY Survey Report

2010

INDIAN EQUITY

INVESTORSSURVEY

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To add to the above observations on market penetration and financial inclusion, comparing direct participation in India’s equity markets could be greater, not only when benchmarked against developed countries, but even in comparison to other BRICs and Asian countries.

1.4%of India's population trades directly in equity market

Continuing the comparison, the equity segment globally contributes about 20 per cent of the total activity in the exchange traded financial markets while in India the corresponding figure is around 70 per cent.

Sources: World Federation of Exchanges and Exchange Websites

Table 5 below provides the comparison.

India and the World: Trading Across Asset Classes (in US $ Trillion), 2009.Table 5:

Asset Groups USA Europe Brazil 16India

Sources: India: NSDL & CDSL, 2009, China: SIPF China, 2010, Russia: MCD, South Korea: KSD, UK: UK Shareholders' Association Press Release, 2007, USA: ICI & SIFMA Report, 2008, Population

Statistics: CIA World Fact Book

Table 4 below highlights this fact.Table 4: India and the World: Direct Participation in Equity Markets

On a broader scale, among nations, India is positioned as a nation with a strong savingsrate, with a large penetration of mobile telephones. These and certain other salient macroeconomic facts are presented in Table 6 below.

Table 6: India and the World: Macro Economic Facts, 2009.

4.3

1.3

2,705 (SSE)

28%

NA

650

300

China1.2

1.12

1306 (BSE)

32%

32

550

80

IndiaGDP ($ trn) (2009 Est.)

Population (in bn) (2009)

Market Cap. ($ bn) (Dec 2009)

Gross household savings rate as

percentage of disposable income (2008)

No. of tax payers (in mn) (2007)

No. of mobile phones (in mn) (2009)

No of internet users (in mn) (2009)

Parameter US14.4

0.3

11,838 (NYSE)

4.4%

134

270

230

Sources: www.CIA.gov, www.world-exchanges.org and Others

UK2.2

0.06

2,796 (LSE)

2.5%

32

75

50

7India8China

9Russia10South Korea

11Uk12USA

13Population in Million1,173

1,330

139

48

61

310

Demat/Population (in %)1.4

9.4

2.2

7.4

16.41517.7

Demat Accounts in Million16.8

125

3

3.55

101454.8

4759

7242150

901

5.2%6.5%

80.4%2.3%5.5%

100%

12.428.8

620.90.07.2

669.3

EquityEquity DerivativesInterest RateFX DerivativesCommodity

Total

1.8%4.3%

92.8%0.0%1.1%

100%

0.61.57.93.4

0.02

13.4

4.7%11.2%58.8%25.1%0.2%

100%

1.23.70.00.81.6

7.3

16%51%0%

11%22%

100%

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10. SME Investors: Scope for Improvement in Indian Equity Market

Transperancy

Innovations

Bureaucracy among exchangepersonnel

Technology

Accounting standard

Exchange as facilitator

14 46 2610

9 7 9 41 30

3 7 35 33 16

3 9 14 41 29

6 4 23 36 25

3 10 29 33 16

0% 20% 40% 60% 80%


Refer Table 27 of Indian Equity Investors Survey 2010% of SME investing

79Insurance

53Equity/MF

50Fixed deposits

27Real Estate

15Government Securities

10Commodities

7Debt of companies

0 50 7525

8. SME Investors: Investment in Different Instruments

SME INVESTORS

9. SME Investors: Barriers to Investing in Stock Market

69Investing in capital markets is very risky


56No guaranteed returns

42Lack of information about investing in capital markets


31Friend/relatives had bad experience investing in capital markets


21Too many products that confuse me

21MFs offer low rate of return

19No loan available on investment in capital markets

19Bad experience with capital markets in the past

19No trust in brokers

17Money would get tied up for long time

12No knowledge of where to buy Equity/MF

0 5025


75

Survey Report2010

INDIAN EQUITY


2010

INDIAN EQUITY

INVESTORSSURVEY

29%of Equity Turnover is concentrated in Top 10 companies

129.3%

28.2%

12.9%

11.4%

21%

19.6%

19.2%

Turnover of top 10 companies to total BSE

NSE

Shanghai SE

Shenzhen SE

Taiwan SE

Tokyo SE

Korea Exchange

ExchangeIndia

China

Taiwan

Japan

Korea

Country

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The opportunity for India lies across various factors. The first is in addressing concentration of companies that are traded within exchanges. In 2008 and 2009, close to one third of trading on India’s major two exchanges were concentrated in the top 10 companies. Elsewhere in Asia, the figure is much lower, highlighting the opportunity for India as a comparable Asian economy. The statistics are presented in Table 7 below.

Table 7: Concentration Comparison Across Asia: 2009.

1Source: World Federation of Exchanges 2009 & 2008

Taking the comparison from across Asia to across the world, another opportunity makes itself very evident. This is the opportunity to develop liquidity in India's capital markets. This can be seen by observing India's turnover velocity and comparing equity share traded value as percentage of GDP across countries. The opportunity for India is evident in the statistics presented in Table 8 below.

The opportunity to make the capital market a hub for raising resources for corporates has a long way to go in being fully tapped. This is evident from two markets. First, in market capitalization terms, India's corporate bond market is 3% of GDP, and 5% of the total bond market. Comparative statistics across Asia highlight the opportunity. These are presented in Table 9 below.

Table 8: India and the World: Market Liquidity, 2009

Turnover Velocity as a measure of market liquidity shows turnover as a percentage to their market capitalization Source: World Federation of Exchanges (2009)

(in US$ Trillion)

Table 9: India and Asia: Corporate Bond Markets, 2009.

Market Cap of Corporate Bond as % to GDP

India 3%

Malaysia 43%

Singapore 34%

Hong Kong 35%

Corporate Bond as % to Total Bond Market

India 5%

Malaysia 45%

Singapore 41%

Hong Kong 52%

Market Cap as % to GDP Equity (India) 110%

Source: WFE Statistics and ADB Asia Bond Monitor; As of Dec '09

India1.2

1.0

87%

BSE: 17.11%

NSE: 53.89%

4.3

7.8

181%

SSE: 129.9%

SHZE: 281.1%

ChinaUS0.9

1.6

170%

KSE: 173.51%

KoreaGDP

Equity share traded value

Equity share traded as a per cent to

GDP

Turnover Velocity (July‘10)

Country14.4

47

326%

NYSE: 137.21%

NASDAQ: 348.85%

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7. Ke

y ben

efits

to th

e ret

ail in

vesto

r thr

ough

com

petit

ion

Refe

r Tab

les 2

3(b)

& 2

3(d)

of I

ndia

n Eq

uity

Inve

stor

s Sur

vey

2010

Base

: (Res

pond

ents

who t

hink i

nves

tors

will b

enefi

t fro

m ne

w ex

chan

ges)

Bette

r Ser

vices

Lowe

r cos

t of t

rading

More

brok

ers p

rovid

ing se

rvice

sGr

eate

r nat

ional

pene

tratio

nBe

tter t

echn

ology

Innov

ative

prod

ucts

478 % 68 57 37 36 27 6

Ove

rall

151 % 73 63 26 42 25 1

Nor

th

89 % 65 44 40 22 30 13East

146 % 70 61 46 42 27 3

Wes

t

92 % 60 53 40 30 25 12

Sout

h

215 % 67 69 38 37 25 7

Tier

1

151 % 71 47 38 42 32 2

Tier

2

112 % 67 46 36 27 22 9

Tier

3

124 % 71 58 35 35 24 6

Busi

ness

man

56 % 84 48 32 48 25 5

Def

ence

Pers

onne

l

49 % 51 63 35 39 27 4

Hou

sew

ife

117 % 63 59 40 38 30 4

Sala

ried

68 % 74 56 35 24 31 4

Self

empl

oyed

64 % 64 55 45 38 22 13

Stud

ent

Introduction2010

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INVESTORSSURVEY Tables

2010

INDIAN EQUITY

INVESTORSSURVEY

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Second, even the existing capital market activity in the equity market is not amenable to resource raising. This is due to the fact that over 75% of trading in equities and equity derivatives are cash settled. Statistics on India versus the rest of the world in terms of equity cash and derivatives are presented in Table 10 below.

Table 11: India and the World: Equity Cash and Derivatives Trading, 2009.

The opportunity in India is even greater if one considers the existing activity in the markets. The top 5 cities in India contribute 84% to trading in 2009-10, a figure up by 6% from 2001-02. Cash trading volumes from Mumbai and Delhi alone account for 65% of cash trading and 60% of mutual funds volume. This is contrasted with the fact that these cities account for only 24% of the national income pool. Hence, correcting this imbalance offers a huge opportunity to unlock value. The statistics are presented in Table 11 below.

4.3

125

75

India

7.8

100

0

China

9.1

45

55

Japan

6.3

24

76

HK

89.3

52

48

U.S.

1.8

70

30

Canada

4.6

74

26

UK

36.7

94

6

Germany

Total Annual Volume in US$ trillionSource: Mckinsey, FICCI Report on Capital markets 2020

178% of cash equities trading in India is intraday in nature which are also cash settled

1Trading in cash equities and equities derivatives , 2009

Cash equities Equity derivatives

Table 10: India and the World: Equity Cash and Derivatives Trading, 2009

Share of cash trading volume, mutual fund ownership and income by cities (FY 09, Percent)

Source: Mckinsey, FICCI Report on Capital markets 2020

Large potential to tap household savings

Next 410 most

populatedcities

Next 8most

populatedcities

Mumbai- Delhi

10

25

65

Cash tradingvolume

22

18

60

Retail mutualfunds

63

13

24

Income pool

Contribution from top 5 cities to total share trading

2001-02

78%

India China

2009

65%

2005-06

82%

2009-10

84%

65%of Equity Cash Market Turnover is generated from Mumbai and Delhi

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45-5

5ye

ars

200 % 64 28 22 10 16

33-4

4ye

ars

315 % 55 31 22 9 20

21-3

2ye

ars

387 % 53 33 16 11 27

Stud

ent

118 % 53 39 20 12 24

Self

empl

oyed

122 % 49 35 20 12 24

Sala

ried

215 % 58 32 17 7 20

Hous

ewife

13

0 % 58 28 25 12 22

Defe

nce

Pers

onne

l 93 % 54 25 19 8 32

Busin

essm

an22

4 % 60 29 17 9 18

Tier

323

7 % 49 38 8 3 21

Tier

232

2 % 65 28 40 8 11

Tier

134

3 % 53 30 7 16 34

Sout

h32

2 % 60 34 41 13 15

Wes

t 10

0 % 83 18 15 13 15

East

20

3 % 61 32 10 14 17

Nort

h 27

7 % 38 32 3 2 37

Over

all

902 % 56 31 19 10 22

Base

: (All r

espo

nden

ts)

Mob

ile ph

one

Inte

rnet

Bank

cros

s-sell

ingAT

M fu

nctio

nalit

yAl

l of t

he ab

ove

5. In

itiat

ives t

hat c

ould

impr

ove a

ccessi

bility

to tr

ading

on th

e Sto

ck Ex

chan

ge

Refe

r Tab

les 1

6(b)

, 16(

c), 1

6(e)

& 1

6(f)

of In

dian

Equ

ity In

vest

ors S

urve

y 20

10

Scal

ePe

rcen

tage

of R

espo

nden

ts1

17%

219

%3

20%

412

%5

12%

6 5%7 5%

8 3%9 1%

10 0%

80%

6. Re

tail i

nves

tors

view

on w

heth

er st

ock m

arke

t will

bene

fit fr

om co

mpe

tition

in st

ock e

xcha

nges

Stud

ent

157 % 17 22 24 10 8 3 6 3 1 0

Self

empl

oyed

162 % 21 19 20 11 8 3 8 4 1 2

Sala

ried

295 % 17 18 21 9 12 5 6 3 2 0

Hous

ewife

175 % 13 21 14 15 17 7 6 2 1 0

Defe

nce

Pers

onne

l

128 % 16 17 25 13 17 5 1 2 0 0

Busin

essm

an

290 % 17 20 17 15 11 6 2 3 0 0

45-5

5ye

ars

260 % 21 18 17 13 16 5 3 2 0 1

33-4

4ye

ars

419 % 17 17 18 9 14 6 5 3 1 0

21-3

2ye

ars

528 % 14 21 23 14 8 5 5 3 1 0

Sout

h

322 % 8 11 16 12 25 7 9 3 2 0

Wes

t

223 % 16 28 23 14 5 4 3 4 0 0

East

283 % 31 16 15 7 13 7 2 1 0 0

Nort

h

379 % 13 23 24 15 4 3 5 3 1 1

Over

all

1207 % 17 19 20 12 12 5 5 3 1 0

Base

: (All R

espo

nden

ts)

1- W

ill be

nefit

imm

ense

ly2 3 4 5 6 7 8 9 10

- Will

not b

enefi

t at a

ll

Refe

r Tab

les 2

1(a,

b),

21(d

) & 2

1(e)

of In

dian

Equ

ity In

vest

ors S

urve

y 20

10

Tables2010

INDIAN EQUITY


2010

INDIAN EQUITY

INVESTORSSURVEY

200111

22000.1mn

$160bn

200923

11800~3 mn

$600 bn260 mn

Companies:Offices:Agents:Sum Assured:Subscribers

Life Insurance Business

2002 2009

Service providers: 13 14

2001 2009

Subscribers: 36 mn 500 mn

Telecom Sector

Source: IRDA, RBI, SEBI, AMFI and TRAI

Table 12: India’s Financial Inclusion Opportunity

Strong Evidenceof Financial Inclusion in

Telecom & Insurance sectors

www.m x-sx.comc 6

India has experienced success with deregulation in the Life Insurance and Telecom sectors. The number of subscribers in Telecom has jumped from 36 million in 2002 to 500 million in 2009. Hence the growth and profit potential is obvious. In addition, the potential for financial inclusion through employment generation is evident in the Life Insurance sector, where the number of agents has risen from 100,000 in 2001 to about 3 million in 2009. The potential in releasing the funds available in the banking and asset management sectors in the Indian economy to the exchange traded space are immense. It is evident that just two major exchanges that exist at present do not bring sufficient trading and financial inclusion opportunity to the Indian public. These and other associated statistics are provided in Table 12 below.

As on December 2009

National Stock Exchanges: 2

Brokers: 2100

Trading Terminals: 200,000

Market Cap: $1120 bn

Direct Investors: ~15 mn

Capital Market

AMCs: 44

Branches: 2500

Agents: 64,000

AUM: $165 bn

Users: ~47 mn

Asset Groups

Number OfCommercial Banks: 170

Branches: 80,500

SCBs Agg deposits : $875 bn

Users: ~600 mn

Banks

www.m x-sx.comc17

3. D

river

s to i

nves

ting i

n Sto

ck M

arke

t

Base

: (All I

nves

tors)

Impr

oved

awar

enes

s of p

rodu

ctsIm

prov

ed aw

aren

ess o

f pro

cesse

sIm

prov

ed aw

aren

ess o

f tec

hnolo

gyTra

ding t

hrou

gh m

obile

Impr

oved

acce

ssibil

ity to

trad

ing on

the s

tock

ex

chan

geIn

trodu

ction

of ne

w pr

oduc

tsSa

les an

d mar

ketin

g by b

roke

rs

Refe

r Tab

le 1

0(b)

, 10(

c) &

10(

d) o

f Ind

ian

Equi

ty In

vest

ors S

urve

y 20

10

YES % 94 98 96 97 84 97 89 97 95 93 94 93 95 92 93 95 100

Over

allNo

rthEa

stW

est

Sout

hTie

r ITie

r II

Tier I

II21

-32 Y

ear

33-4

4 Yea

rs45

-55 Y

ears

Busin

essm

anDe

fence

perso

nnel

Hous

ewife

Salar

iedSe

lf em

ploye

dSt

uden

ts

NO % 6 2 4 3 16 3 11 3 5 7 6 7 5 8 7 5 0

4. In

tere

sted i

n atte

nding

train

ing pr

ogra

mm

es in

vicin

ity

Refe

r Tab

les 1

3(a)

, 13(

b) a

nd 1

3(c)

of I

ndia

n Eq

uity

Inve

stor

s Sur

vey

2010

Self

empl

oyed

73 % 62 63 56 38 37 32 19

444 % 59 53 43 41 39 30 26

Ove

rall

133 % 59 49 47 47 53 34 38

Nor

th

109 % 69 45 36 38 33 39 32East

82 % 63 48 45 56 49 21 21

Wes

t

120 % 48 68 43 26 24 23 12

Sout

h

176 % 64 64 45 40 36 26 16

Tier

1

159 % 49 50 45 39 38 26 26

Tier

2

109 % 67 39 35 44 48 42 43

Tier

3

134 % 55 47 42 34 37 25 31

Busi

ness

man

46 % 59 50 30 54 67 33 26

Def

ence

pers

onne

l

37 % 65 51 43 43 30 30 30

Hou

sew

ife

129 % 61 59 40 43 37 29 25

Sala

ried

Introduction2010

INDIAN EQUITY


2010

INDIAN EQUITY

INVESTORSSURVEY

www.m x-sx.comc7

Finally, India can take inspiration from the success of deregulation and competition in the mature markets of the world. In the United States, there is no single exchange with 50% market share, and in Europe it is under 25%. Statistics about the US and Europe are presented in Table 13 below.

In light of the above facts, The Nielsen Company was commissioned to investigate the current status of the Indian equity market to estimate the level of desire and understanding in the public itself for Financial Inclusion and Development in the Equity Markets. This Survey Report is presented in the following pages.

Source: Thomson Reuters's European Market Share Report; * Excluding OTC reported & dark pools

There are 14 SEC registered national securities exchanges besides more than 73 active registered Alternative Trading Systems (deemed exchanges) in the US and over 20 registered Multi Trading

Facilities operating in Europe.

14.5

9.6

8.7

7.8

6.3

4.0

3.9

2.7

4.8

Avg. Daily Share Traded Value (in US$ Bn) (Apr '10)

23.2%

15.5%

14.0%

12.6%

10.0%

6.4%

6.1%

4.3%

7.9%

Market Share (%)

EUROPE

47.3%is the highest market share of any stock exchange in the US and Europe where as 92.5% is the Market Share of NSE

LSE Group

Euronext

CHI-X

Deutsche Boerse

Spanish Exchanges

Nasdaq OMX Nordic

SIX Swiss

BATS Europe

Others (24 platforms)

Trading Platforms(Europe)

NASDAQ OMX*

NYSE EURONEXT*

BATS

EDGE DIRECT

Boston EX

National SX

Chicago SX

CBOE

National Securities Exchanges

106.4

74.1

27.5

7.5

6.6

1.3

1.2

0.4

Avg. Daily Share Traded Value (in US$ Bn) (Jul '10)

47.3%

33.0%

12.2%

3.4%

2.9%

0.6%

0.5%

0.2%

Market Share (%)

UNITED STATES

Table 13: Competitive Scenario in U.S. and Europe.

www.m x-sx.comc 16Ba

se: (A

ll Res

pond

ents)

No gu

aran

teed

retu

rns

Too m

uch p

rice f

luctu

ation

Inve

sting

in ca

pital

mar

kets

is ve

ry ris

ky

Lack

of in

form

ation

abou

t inv

estin

g in c

apita

l mar

kets

Neve

r app

roac

hed b

y a br

oker

/ inv

estm

ent a

dviso

r

No kn

owled

ge of

whe

re to

buy E

quity

/MF/

ULIPs

Not e

noug

h mon

ey to

inve

st in

Capit

al m

arke

ts

No lo

an av

ailab

le on

inve

stmen

t in c

apita

l mar

kets

Too m

any p

rodu

cts th

at co

nfus

e me

Frien

d/re

lative

s had

bad e

xper

ience

inve

sting

in ca

pital

mar

kets

No tr

ust i

n bro

kers

Mon

ey w

ould

get t

ied up

for l

ong t

ime

MF/

ULIPs

offer

low

rate

of re

turn

Lack

of ac

cess

to tr

ading

on th

e sto

ck ex

chan

ge

1207 % 66 65 62 56 50 47 45 40 35 35 33 29 27 25

Over

all

466 % 66 69 67 47 52 44 45 43 34 33 31 24 27 19Ti

er 1

424 % 67 66 60 59 51 48 41 41 32 36 36 33 28 22Ti

er 2

317 % 65 57 58 63 45 50 50 33 42 38 32 32 25 38Ti

er 3

290 % 63 64 62 51 41 42 38 37 32 29 31 27 25 23

Busin

essm

an

128 % 62 55 65 66 57 46 42 38 30 34 30 27 24 27

Defe

nce

pers

onne

l

175 % 65 67 57 66 49 51 54 43 40 34 36 31 26 33

Hous

ewife

295 % 69 65 63 55 51 46 43 37 38 39 36 31 25 23

Sala

ried

162 % 70 67 59 46 50 44 41 44 30 39 28 26 33 17Self

empl

oyed

157 % 68 66 68 57 57 57 61 45 39 37 36 36 30 31

Stud

ent

Refer

Table

s 9(c)

& 9(

e)of In

dian E

quity

Inve

stors

Surv

ey 20

10

2. Ba

rrier

s to i

nves

ting i

n Sto

ck M

arke

t

Tables2010

INDIAN EQUITY


2010

INDIAN EQUITY

INVESTORSSURVEY

www.m x-sx.comc 8

1! Bloomberg Statistics /Ticker name: INGCGDP INDEX

2! www.indiabudget.nic.in/es2001-02/chapt2002/tab91.pdf


4! CIA World Fact Book, https://www.cia.gov/library/publications/the-world-factbook/geos/in

5! March 2001 Market Capitalization Statistics in INR from SEBI Handbook 2009, Table 17, and

USDINR RBI Reference Rate as at March 30,2001 from RBI website http://www.rbi.org.in/scripts/ReferenceRateArchive.aspx6

! March 2010 Market Capitalization Statistics in USD. Bloomberg Statistics/Ticker: WCAUINDI7

! Demat Accounts: National Securities Depository Limited Press Release, August, 2009 & Central Depository Services Limited : http://www.cdslindia.com/8

! China Securities Investor Protection Fund Corporation (SIPF), Overview Statistics of Securities Market as on May 31, 2010. http://www.sipf.com.cn/images/en/chinassecuritiesmarketoverview /marketdata /2010/06/30/ F7256A2C1A1A26BED2B14B38C70BEA5B.pdf9

! Moscow Central Depository Incorporation: http://www.english.mcd.ru/company.htm10

! Korean Securities Depository: http://www.ksd.or.kr/eng/html/introduction/ceomessage.home11

! UK Shareholders’ Association Press Release, July, 200712

! Investment Company Institute & The Securities Industry & Financial Markets Association/Equity & Bond Ownership In America, 2008, Key Findings/Pg. 113

! CIA World Fact Book, https://www.cia.gov/library/publications/the-world-factbook/geos/(Select Country) as accessed on August 18, 201014

! Number of US households investing in equities15

! Ratio of household investors to population16

! 2009-10

FOOTNOTES

www.m x-sx.comc15

1. In

vestm

ent m

ade i

n diff

eren

t ins

trum

ents

Refe

r Tab

les 2

(b) &

2(e

) of I

ndia

n Eq

uity

Inve

stor

s Sur

vey

2010

Base

: (All R

espo

nden

ts)

Insu

ranc

eFix

ed de

posit

sGo

ld or

silve

rRe

al es

tate

Mut

ual fu

nd sc

hem

esEq

uity

ULIPs

PPF

Gove

rnm

ent s

chem

es (N

SC et

c)Go

vern

men

t bon

dsCh

it fu

nds

Debt

1207 % 86 49 43 25 23 18 15 11 11 7 7 1

Over

all

379 % 83 34 54 41 16 23 17 12 12 10 2 1

Nort

h28

3 % 96 75 19 11 31 21 11 11 16 7 2 2East

223 % 86 54 57 22 22 23 14 17 10 3 5 1

Wes

t32

2 % 80 39 43 19 25 7 16 8 7 8 18 1

Sout

h29

0 % 88 48 47 31 28 27 20 4 8 6 11 2

Busin

essm

an12

8 % 93 65 43 23 24 18 13 19 13 15 2 0

Defe

nce

175 % 80 37 44 18 13 7 7 7 12 5 8 1

Hous

ewife

295 % 89 54 44 22 26 21 19 24 15 5 4 1

Sala

ried

162 % 86 48 46 38 31 20 16 7 14 12 7 2Self

empl

oyed

157 % 77 41 32 15 10 9 5 3 4 3 5 0

Stud

ent

RETAIL INVESTORS

Introduction2010

INDIAN EQUITY


2010

INDIAN EQUITY

INVESTORSSURVEY

www.m x-sx.comc9

This survey is different from its precursors in many respects and is also similar. The similarity lies in the subject matter and objective, wherein the preferences of Indian investors are sought to be understood and updated. The differences are in sample selection and in survey methodology. The SEBI/NCAER survey surveyed households across rural and urban India, whereas this Survey, similar to the L C Gupta surveys, was focused on urban households. This survey used single questionnaires and employed a professional survey agency, unlike the L C Gupta surveys, which employed university teachers, bank managers, etc, in addition to research professionals.

The SEBI/NCAER survey was the first major survey of its kind and sought to investigate the population of individual investors who had invested directly or indirectly in the equity market. This survey provides an update to these indicators for 2010. It also provides an update to several other elements of the SEBI/NCAER survey, including updates on investors’ expectations from the market.

This survey extends the L C Gupta Surveys by extending the study of market perception beyond households to a broader investor class. Significantly, the L C Gupta Surveys had highlighted the need for investor education. This survey provides evidence that helps further this aspect very clearly.

Since this a survey of present and potential investors, it has included both individuals and institutions. In the case of individuals, henceforth referred to as retail investors, it was conducted across India, spanning geographies (all four zones), ages and occupations. In the case of institutions, it was not limited to traditional institutions but included all corporate as well as senior finance executives of small and medium industries who invested on behalf of their institutions. Note must be made that institutions were surveyed here as investors and not as sell side institutions looking to issue paper in the equity market. The Survey has made an effort to include as broad a cross-section of the public as possible, yet has controlled for factors such as education, age and occupation, in order to draw out an informed opinion about the market even from respondents who were non-investors.

The starting point of the Survey was the cognisance of the fact that just 1.4% of India’s population 1invests directly in the equity market . Hence, in the quest for informed and considered opinion

about various aspects of the equity market, certain sampling controls were imposed. These were designed to ascertain the opinions of that portion of the retail population that is most likely to participate in the market.

At the macro level, the Survey was directed at cities, although spread across all geographic zones of the country. India’s 4 major metros — Mumbai, Delhi, Kolkata and Chennai — were included, which were called Tier I for purposes of this Survey. The next level of development, called Tier II, was represented by Bangalore, Vijayawada, Lucknow and Ahmedabad, and currently non-metropolitan cities but potentially at the next level of development — represented by Guwahati, Bhubaneshwar, Jaipur and Ludhiana — were classified as Tier III. Semi-urban and rural sections of

2the population, which constitute 71% of India’s population , did not qualify for this survey, in the interest of integrity of information content.

Businessmen invest the

most (27%) and

Housewives invest the

least (7%) in equity

markets

PurposeThis Survey of retail and institutional respondents has mapped out their collective opinion regarding various facets of the Indian equity market. The objective of the Survey was to accurately ascertain the opportunities and the means to achieve them that are inherent in the equity market today, and what the public desires of this industry going forward. Its precursors, at a national level, were the “Survey of Indian Investors” by SEBI/NCAER, 1999, the Society for Capital Market Research and Development sponsored “Indian Shareowners: A Survey”, 1991, “Household Investors Survey”, 2004, and “The Changing Investment Preferences of Indian Households”, 2008,

Aalso known as the L C Gupta Surveys.

www.m x-sx.comc 14

!

!

!

!

!

!

!

!

1. Kar, P., I. Natarajan and J.P. Singh, Survey of Indian Investors”, SEBI-NCAER, 1999.

2. Gupta, L.C., “Indian Shareowners: A Survey”, Society for Capital Market Research & Development, 1991.

3. Gupta, L.C., “Indian Household Investors Survey”, Society for Capital Market Research & Development, 2005.

4. Gupta, L.C., “The Changing Investment Preferences of Indian Households”, Society for Capital Market Research & Development, 2008.

1National Securities Depository Limited Press Release, August, 2009 & Central Depository Services Limited: http://www.cdslindia.com/2Source: CIA Factbook India. (www.cia.gov/library/publications/the-world-factbook/geos/in.html).3Survey restricted to educated homemakers.4Post graduate and above.5Source: Table 1, 8 and 12.6IRDA Annual Report 2001, Table No.18: Distribution Channel Statistics 2000-01.7IRDA Annual Report 2009, Table No.47: Details of Individual Agents of Life Insurers.8SEBI’s Handbook of Statistics on Indian Securities Market 2009, Table 1: SEBI Registered Market Intermediaries.

FOOTNOTES

AREFERENCES

Report2010

INDIAN EQUITY

INVESTORSSURVEY Report

2010

INDIAN EQUITY

INVESTORSSURVEY

www.m x-sx.comc 10

The Institutional Investors were drawn from two populations — Corporate (including Financial Institutions and Banks) and SMEs. For Corporates, CFOs and Treasury Heads were interviewed across three Tier I cities and one Tier II city. 25% of the Corporate population were Financial Institutions. For Small and Medium Enterprises, CFOs and their equivalent were interviewed from clusters in 12 cities across India. Details of the sample stratification are discussed in the Survey Methodology section in the detailed report.

The following sections highlight, in terms of the key findings of the Survey. The respective tables and sections are referred wherever appropriate in the following sections. The following sections are divided into: Gaps in the Indian equity market, Addressing the Gaps and Looking Ahead. All the findings reported are from actual survey responses.

i. Across the country, only 18% of those surveyed invested in equities.3ii. Businessmen surveyed invest the most and housewives invest the least. Only 7% of

housewives surveyed invest in equities, followed by students at 9%, defence personnel at 18%, self-employed at 20%, salaried at 21% and businessmen at 27%.

iii. Among Institutional Investors, 53% of SMEs and 57% of Corporates surveyed invested in equities.

(Refer Tables 1, 8 and 12)

i. Across the country, 50% of those surveyed were never approached by brokers or investment advisors.

ii. Businessmen were the most-approached segment by brokers and investment 4advisors. However, 57% of defence personnel, 57% of students and 51% of salaried

personnel have never been approached.

iii. Within Institutional Investors surveyed, 27% of SMEs and 11% of Corporates have never been approached by brokers or investment advisors.


i. Across the country, 56% of those surveyed conveyed a lack of information about investing as a major barrier to participating in the market.

ii. In Tier III cities, 63% identified lack of information as a major reason for their non-participation, in Tier II it was 59% and in Tier I, it was 47%.

iii. Additionally, 47% of those surveyed have no knowledge of where to buy Equity, Mutual Funds or ULIPs.

iv. In Tier III cities, 50% of those surveyed attributed non-participation to lack of knowledge about where to buy Equity and Equity-linked products, followed by Tier II cities at 48% and Tier I at 44%.

v. Among Institutional Investors, 42% of SMEs and 32% of Corporates conveyed lack of information about investing as a major barrier to participating in capital markets.


1. Opportunities in the Indian equity market: Penetration, Development, Reach and Provision of Financial Knowledge

a. Penetration and development opportunities

b. Opportunity for increasing reach

c. Opportunity in imparting financial knowledge

50% of Retail,

27% of SME and

11% of Corporate respondents are yet

to be approached by a broker/ investment

advisor

KEY FINDINGS:

www.m x-sx.comc13

iv. Among Institutional Investors surveyed, 41% of SMEs and 44% of Corporates felt that promoting competition in the exchange sector would lead to better services.


i. Over half the retail respondents surveyed (57%) felt that more competition in exchanges will lead to a lower cost of participation in the capital markets.

ii. Across zones, the North (63%) and the West (61%) were seen to hold this opinion most strongly. Tier I cities (69%) most strongly perceived this benefit.

iii. Across occupations, this benefit was strongly perceived by housewives (63%), followed by salaried personnel (59%), businessmen (58%) and students (55%)

(Refer Table 7)

The first major finding of this Survey is that there is huge scope to enhance market penetration leading to financial inclusion. This is further supported by the need for market development increasing reach and imparting greater financial knowledge. Secondly, it is clear that measures to increase access to the markets are welcome, and there is a great keenness to be imparted financial training if it could be conducted at a reasonably convenient location. All means to increase access, including mobile telephony or cross-selling, appear welcome.

Finally, respondents to this Survey have expressed their opinion about what they expect India’s equity market to look like in the future. They have clearly expressed a desire for more competition in this space. Opinion appears to be in favour of competition and benefits therefrom in the equity markets going forward. This holds true across surveyed occupations, ages, geographies and Tiers of cities. Further, the effort to achieve greater financial inclusion appears to be the desired and a preferred remedy emanating from this Survey.

Financial inclusion appears to be an achievable goal for the Equity market. This is evidenced by the success of market penetration strategies in Insurance during this decade. The Survey shows that in 2010, 86% of retail, 79% of SMEs and 67% of Corporate respondents invest in Insurance as against

518% of Retail, 53% of SMEs and 57% of Corporate respondents investing in Equity . During this 6decade, the number of Insurance agents has grown 25-fold, from 1,15,715 in 2001 to 29,37,435 in

72009 , whereas the number of Cash Equity brokers has actually reduced from 9,712 in 2001 to 8,652 8in 2009 .

It is important to revisit what was noted at the outset, that the opinions emanating from this Survey are from the most informed part of the investor population. Accordingly, it can be estimated that the need for market penetration and development highlighted herein are much larger in pervasiveness than even appear here, and the appetite for their redressal, with the solutions suggested is, equivalently, many orders of magnitude larger.

II. Lower cost of participation

CONCLUSION

of retail respondents feel competition among exchanges will lead to lower cost of participation

Over half (57%)

Report2010

INDIAN EQUITY


2010

INDIAN EQUITY

INVESTORSSURVEY

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2. Meeting the Potential: Increasing participation, reach and financial knowledge

a. Drivers for increasing participation: Improve awareness and access

I. Improve awareness

II. Improve access

III. Improve Operational Efficiency

b. Increasing reach: Preferred channels

i. A majority of those surveyed demanded an improved awareness of products (59%) and processes (53%) in order to increase their participation in the equity markets.

ii. Increased product awareness was demanded by 69% of the East zone, 63% of the West zone and 59% of the North. Among tiers, Tier III cities at 67% showed the greatest demand.

iii. Increased process awareness was demanded by a majority (68%) of respondents from the South zone, followed by the North (49%). Tier I cities (64%) demanded improved process awareness, followed by Tier II cities (50%).

(Refer Table 3)

i. A significant portion (39%) of those surveyed felt that improved accessibility to trading on the stock exchange would bring them to the market. Across zones, this was strongly echoed in the North (at 53%), followed by the West (49%).

ii. Across occupations, a clear majority (67%) of defence personnel identified this as a major driver to bring them to participate in the market. Businessmen, salaried and self-employed felt this was a significant driver (37%).

(Refer Table 3)

i. Institutional Investors surveyed demanded high market volume and liquidity (58% of SMEs and 49% of Corporates), which in turn, would increase their participation in capital markets.

ii. Institutional Investors surveyed also felt that if the disclosure standards were to be improved, (52% of SMEs and 41% of Corporates) it would be a major driver to their investing in equity markets.

iii. Institutional investors also stressed that improved trading and settlement procedures (46% of SMEs and 51% of Corporates), would enable them to increase their investment activity in the equity market.

(Refer Tables 11 and 15)

i. A majority (56%) of the retail respondents surveyed preferred Mobile telephony as the preferred channel that would improve their access to the market. This was followed by the Internet (31%) and bank cross-selling (19%).

ii. This preference for Mobile telephony is reinforced strongly across zones and Tiers, with 83% of the West and 65% of Tier II cities expressing strong demand for it as a key enabler.

iii. This is true even across occupations, with housewives (58%) and salaried (58%) preferring it most strongly, followed by defence personnel (54%) and students (53%). Interestingly, the age group 45-55 years preferred it most strongly (64%), followed by 33-44 year olds (55%) and 21-32 year olds (53%).

iv. The Internet, not surprisingly, was significant among students (39%), in Tier III cities (38%) and among the youngest segment of the population—21-32 year-olds (33%), but in no cases was it preferred to Mobile telephony.

Improved awareness of

products (59%) and

processes (53%)

would enable increased participation in equity

market

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v. Bank cross-selling was seen as an option next to Mobile telephony only in the South zone (41%) and in Tier II cities (40%). However, again, in no case was it preferred to the Mobile telephony.

This is significant, because it shows that cities such as Bangalore, which is technologically advanced, may be open to bank cross-selling. This also indicates the next step that one may consider taking beyond Mobile telephony, in terms of providing access to the market.

vi. Within Institutional Investors surveyed, 71% of SMEs and 75% of Corporates felt there is room for improvement in banking services.


i. An overwhelming majority (94%) of retail respondents surveyed confirmed that they would attend market-oriented training programmes in finance, were any offered in their vicinity.

ii. This was resoundingly confirmed across zones. 98% of the North, 97% of the West and 96% of the East confirmed this.

iii. This is true across occupations, with 95% of defence personnel, 95% of self-employed, 93% of businessmen and 93% of salaried personnel confirming this demand.

(Refer Table 4)

I. An overwhelming majority (80%) of retail respondents surveyed believe that the stock market industry will benefit from competition.

ii. This is supported across zones, with 86% of the West, 82% of the East, 79% of the North and 72% of the South holding this opinion.

iii. This strong opinion is held across all ages — the age group 45-55 years with the strongest opinion at 85%, followed by the 21-32 age group, at 80% and the 33-44 age group at 75%.

Similarly, this opinion is reinforced across occupations with defence personnel, at 88%, holding this opinion most strongly; students at 81% also overwhelmingly support this view, followed by businessmen at 80%, similarly for housewives at 80%, self-employed at 79%, and salaried at 77%. We note that even the weakest opinion is overwhelmingly in favour of greater competition in the equity markets.

(Refer Table 6)

i. A great majority (68%) of retail respondents surveyed felt that more competition in exchanges will lead to the investor receiving better services.

ii. This opinion was especially strongly expressed in the North zone (73%), followed by the West (70%).

iii. 84% of defence personnel surveyed hold this view, as do 74% of self-employed, 71% of businessmen, 64% of students and 63% of salaried personnel.

c. Increasing financial knowledge: Training

3. Looking Ahead: The demand for more competition in the Indian equity markets and the perceived benefits

a. The public demand for greater competition in the Indian equity markets

b. Perceived benefits to the retail investors from competition: Better services and lower cost of participation

I. Better services

Overwhelming majority of retail

management

(94%) are willing

to attend financial training programmes

held in their vicinity

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The Institutional Investors were drawn from two populations — Corporate (including Financial Institutions and Banks) and SMEs. For Corporates, CFOs and Treasury Heads were interviewed across three Tier I cities and one Tier II city. 25% of the Corporate population were Financial Institutions. For Small and Medium Enterprises, CFOs and their equivalent were interviewed from clusters in 12 cities across India. Details of the sample stratification are discussed in the Survey Methodology section in the detailed report.

The following sections highlight, in terms of the key findings of the Survey. The respective tables and sections are referred wherever appropriate in the following sections. The following sections are divided into: Gaps in the Indian equity market, Addressing the Gaps and Looking Ahead. All the findings reported are from actual survey responses.

i. Across the country, only 18% of those surveyed invested in equities.3ii. Businessmen surveyed invest the most and housewives invest the least. Only 7% of

housewives surveyed invest in equities, followed by students at 9%, defence personnel at 18%, self-employed at 20%, salaried at 21% and businessmen at 27%.

iii. Among Institutional Investors, 53% of SMEs and 57% of Corporates surveyed invested in equities.


i. Across the country, 50% of those surveyed were never approached by brokers or investment advisors.

ii. Businessmen were the most-approached segment by brokers and investment 4advisors. However, 57% of defence personnel, 57% of students and 51% of salaried

personnel have never been approached.

iii. Within Institutional Investors surveyed, 27% of SMEs and 11% of Corporates have never been approached by brokers or investment advisors.


i. Across the country, 56% of those surveyed conveyed a lack of information about investing as a major barrier to participating in the market.

ii. In Tier III cities, 63% identified lack of information as a major reason for their non-participation, in Tier II it was 59% and in Tier I, it was 47%.

iii. Additionally, 47% of those surveyed have no knowledge of where to buy Equity, Mutual Funds or ULIPs.

iv. In Tier III cities, 50% of those surveyed attributed non-participation to lack of knowledge about where to buy Equity and Equity-linked products, followed by Tier II cities at 48% and Tier I at 44%.

v. Among Institutional Investors, 42% of SMEs and 32% of Corporates conveyed lack of information about investing as a major barrier to participating in capital markets.


1. Opportunities in the Indian equity market: Penetration, Development, Reach and Provision of Financial Knowledge

a. Penetration and development opportunities

b. Opportunity for increasing reach

c. Opportunity in imparting financial knowledge

50% of Retail,

27% of SME and

11% of Corporate respondents are yet

to be approached by a broker/ investment

advisor

KEY FINDINGS:

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iv. Among Institutional Investors surveyed, 41% of SMEs and 44% of Corporates felt that promoting competition in the exchange sector would lead to better services.


i. Over half the retail respondents surveyed (57%) felt that more competition in exchanges will lead to a lower cost of participation in the capital markets.

ii. Across zones, the North (63%) and the West (61%) were seen to hold this opinion most strongly. Tier I cities (69%) most strongly perceived this benefit.

iii. Across occupations, this benefit was strongly perceived by housewives (63%), followed by salaried personnel (59%), businessmen (58%) and students (55%)

(Refer Table 7)

The first major finding of this Survey is that there is huge scope to enhance market penetration leading to financial inclusion. This is further supported by the need for market development increasing reach and imparting greater financial knowledge. Secondly, it is clear that measures to increase access to the markets are welcome, and there is a great keenness to be imparted financial training if it could be conducted at a reasonably convenient location. All means to increase access, including mobile telephony or cross-selling, appear welcome.

Finally, respondents to this Survey have expressed their opinion about what they expect India’s equity market to look like in the future. They have clearly expressed a desire for more competition in this space. Opinion appears to be in favour of competition and benefits therefrom in the equity markets going forward. This holds true across surveyed occupations, ages, geographies and Tiers of cities. Further, the effort to achieve greater financial inclusion appears to be the desired and a preferred remedy emanating from this Survey.

Financial inclusion appears to be an achievable goal for the Equity market. This is evidenced by the success of market penetration strategies in Insurance during this decade. The Survey shows that in 2010, 86% of retail, 79% of SMEs and 67% of Corporate respondents invest in Insurance as against

518% of Retail, 53% of SMEs and 57% of Corporate respondents investing in Equity . During this 6decade, the number of Insurance agents has grown 25-fold, from 1,15,715 in 2001 to 29,37,435 in

72009 , whereas the number of Cash Equity brokers has actually reduced from 9,712 in 2001 to 8,652 8in 2009 .

It is important to revisit what was noted at the outset, that the opinions emanating from this Survey are from the most informed part of the investor population. Accordingly, it can be estimated that the need for market penetration and development highlighted herein are much larger in pervasiveness than even appear here, and the appetite for their redressal, with the solutions suggested is, equivalently, many orders of magnitude larger.

II. Lower cost of participation

CONCLUSION

of retail respondents feel competition among exchanges will lead to lower cost of participation

Over half (57%)

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This survey is different from its precursors in many respects and is also similar. The similarity lies in the subject matter and objective, wherein the preferences of Indian investors are sought to be understood and updated. The differences are in sample selection and in survey methodology. The SEBI/NCAER survey surveyed households across rural and urban India, whereas this Survey, similar to the L C Gupta surveys, was focused on urban households. This survey used single questionnaires and employed a professional survey agency, unlike the L C Gupta surveys, which employed university teachers, bank managers, etc, in addition to research professionals.

The SEBI/NCAER survey was the first major survey of its kind and sought to investigate the population of individual investors who had invested directly or indirectly in the equity market. This survey provides an update to these indicators for 2010. It also provides an update to several other elements of the SEBI/NCAER survey, including updates on investors’ expectations from the market.

This survey extends the L C Gupta Surveys by extending the study of market perception beyond households to a broader investor class. Significantly, the L C Gupta Surveys had highlighted the need for investor education. This survey provides evidence that helps further this aspect very clearly.

Since this a survey of present and potential investors, it has included both individuals and institutions. In the case of individuals, henceforth referred to as retail investors, it was conducted across India, spanning geographies (all four zones), ages and occupations. In the case of institutions, it was not limited to traditional institutions but included all corporate as well as senior finance executives of small and medium industries who invested on behalf of their institutions. Note must be made that institutions were surveyed here as investors and not as sell side institutions looking to issue paper in the equity market. The Survey has made an effort to include as broad a cross-section of the public as possible, yet has controlled for factors such as education, age and occupation, in order to draw out an informed opinion about the market even from respondents who were non-investors.

The starting point of the Survey was the cognisance of the fact that just 1.4% of India’s population 1invests directly in the equity market . Hence, in the quest for informed and considered opinion

about various aspects of the equity market, certain sampling controls were imposed. These were designed to ascertain the opinions of that portion of the retail population that is most likely to participate in the market.

At the macro level, the Survey was directed at cities, although spread across all geographic zones of the country. India’s 4 major metros — Mumbai, Delhi, Kolkata and Chennai — were included, which were called Tier I for purposes of this Survey. The next level of development, called Tier II, was represented by Bangalore, Vijayawada, Lucknow and Ahmedabad, and currently non-metropolitan cities but potentially at the next level of development — represented by Guwahati, Bhubaneshwar, Jaipur and Ludhiana — were classified as Tier III. Semi-urban and rural sections of

2the population, which constitute 71% of India’s population , did not qualify for this survey, in the interest of integrity of information content.

Businessmen invest the

most (27%) and

Housewives invest the

least (7%) in equity

markets

PurposeThis Survey of retail and institutional respondents has mapped out their collective opinion regarding various facets of the Indian equity market. The objective of the Survey was to accurately ascertain the opportunities and the means to achieve them that are inherent in the equity market today, and what the public desires of this industry going forward. Its precursors, at a national level, were the “Survey of Indian Investors” by SEBI/NCAER, 1999, the Society for Capital Market Research and Development sponsored “Indian Shareowners: A Survey”, 1991, “Household Investors Survey”, 2004, and “The Changing Investment Preferences of Indian Households”, 2008,

Aalso known as the L C Gupta Surveys.

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!

!

!

!

!

!

!

!

1. Kar, P., I. Natarajan and J.P. Singh, Survey of Indian Investors”, SEBI-NCAER, 1999.

2. Gupta, L.C., “Indian Shareowners: A Survey”, Society for Capital Market Research & Development, 1991.

3. Gupta, L.C., “Indian Household Investors Survey”, Society for Capital Market Research & Development, 2005.

4. Gupta, L.C., “The Changing Investment Preferences of Indian Households”, Society for Capital Market Research & Development, 2008.

1National Securities Depository Limited Press Release, August, 2009 & Central Depository Services Limited: http://www.cdslindia.com/2Source: CIA Factbook India. (www.cia.gov/library/publications/the-world-factbook/geos/in.html).3Survey restricted to educated homemakers.4Post graduate and above.5Source: Table 1, 8 and 12.6IRDA Annual Report 2001, Table No.18: Distribution Channel Statistics 2000-01.7IRDA Annual Report 2009, Table No.47: Details of Individual Agents of Life Insurers.8SEBI’s Handbook of Statistics on Indian Securities Market 2009, Table 1: SEBI Registered Market Intermediaries.

FOOTNOTES

AREFERENCES

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2! www.indiabudget.nic.in/es2001-02/chapt2002/tab91.pdf


4! CIA World Fact Book, https://www.cia.gov/library/publications/the-world-factbook/geos/in

5! March 2001 Market Capitalization Statistics in INR from SEBI Handbook 2009, Table 17, and

USDINR RBI Reference Rate as at March 30,2001 from RBI website http://www.rbi.org.in/scripts/ReferenceRateArchive.aspx6

! March 2010 Market Capitalization Statistics in USD. Bloomberg Statistics/Ticker: WCAUINDI7

! Demat Accounts: National Securities Depository Limited Press Release, August, 2009 & Central Depository Services Limited : http://www.cdslindia.com/8

! China Securities Investor Protection Fund Corporation (SIPF), Overview Statistics of Securities Market as on May 31, 2010. http://www.sipf.com.cn/images/en/chinassecuritiesmarketoverview /marketdata /2010/06/30/ F7256A2C1A1A26BED2B14B38C70BEA5B.pdf9

! Moscow Central Depository Incorporation: http://www.english.mcd.ru/company.htm10

! Korean Securities Depository: http://www.ksd.or.kr/eng/html/introduction/ceomessage.home11

! UK Shareholders’ Association Press Release, July, 200712

! Investment Company Institute & The Securities Industry & Financial Markets Association/Equity & Bond Ownership In America, 2008, Key Findings/Pg. 113

! CIA World Fact Book, https://www.cia.gov/library/publications/the-world-factbook/geos/(Select Country) as accessed on August 18, 201014

! Number of US households investing in equities15

! Ratio of household investors to population16

! 2009-10

FOOTNOTES

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1. In

vestm

ent m

ade i

n diff

eren

t ins

trum

ents

Refe

r Tab

les 2

(b) &

2(e

) of I

ndia

n Eq

uity

Inve

stor

s Sur

vey

2010

Base

: (All R

espo

nden

ts)

Insu

ranc

eFix

ed de

posit

sGo

ld or

silve

rRe

al es

tate

Mut

ual fu

nd sc

hem

esEq

uity

ULIPs

PPF

Gove

rnm

ent s

chem

es (N

SC et

c)Go

vern

men

t bon

dsCh

it fu

nds

Debt

1207 % 86 49 43 25 23 18 15 11 11 7 7 1

Over

all

379 % 83 34 54 41 16 23 17 12 12 10 2 1

Nort

h28

3 % 96 75 19 11 31 21 11 11 16 7 2 2East

223 % 86 54 57 22 22 23 14 17 10 3 5 1

Wes

t32

2 % 80 39 43 19 25 7 16 8 7 8 18 1

Sout

h29

0 % 88 48 47 31 28 27 20 4 8 6 11 2

Busin

essm

an12

8 % 93 65 43 23 24 18 13 19 13 15 2 0

Defe

nce

175 % 80 37 44 18 13 7 7 7 12 5 8 1

Hous

ewife

295 % 89 54 44 22 26 21 19 24 15 5 4 1

Sala

ried

162 % 86 48 46 38 31 20 16 7 14 12 7 2Self

empl

oyed

157 % 77 41 32 15 10 9 5 3 4 3 5 0

Stud

ent

RETAIL INVESTORS

Introduction2010

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Finally, India can take inspiration from the success of deregulation and competition in the mature markets of the world. In the United States, there is no single exchange with 50% market share, and in Europe it is under 25%. Statistics about the US and Europe are presented in Table 13 below.

In light of the above facts, The Nielsen Company was commissioned to investigate the current status of the Indian equity market to estimate the level of desire and understanding in the public itself for Financial Inclusion and Development in the Equity Markets. This Survey Report is presented in the following pages.

Source: Thomson Reuters's European Market Share Report; * Excluding OTC reported & dark pools

There are 14 SEC registered national securities exchanges besides more than 73 active registered Alternative Trading Systems (deemed exchanges) in the US and over 20 registered Multi Trading

Facilities operating in Europe.

14.5

9.6

8.7

7.8

6.3

4.0

3.9

2.7

4.8

Avg. Daily Share Traded Value (in US$ Bn) (Apr '10)

23.2%

15.5%

14.0%

12.6%

10.0%

6.4%

6.1%

4.3%

7.9%

Market Share (%)

EUROPE

47.3%is the highest market share of any stock exchange in the US and Europe where as 92.5% is the Market Share of NSE

LSE Group

Euronext

CHI-X

Deutsche Boerse

Spanish Exchanges

Nasdaq OMX Nordic

SIX Swiss

BATS Europe

Others (24 platforms)

Trading Platforms(Europe)

NASDAQ OMX*

NYSE EURONEXT*

BATS

EDGE DIRECT

Boston EX

National SX

Chicago SX

CBOE

National Securities Exchanges

106.4

74.1

27.5

7.5

6.6

1.3

1.2

0.4

Avg. Daily Share Traded Value (in US$ Bn) (Jul '10)

47.3%

33.0%

12.2%

3.4%

2.9%

0.6%

0.5%

0.2%

Market Share (%)

UNITED STATES

Table 13: Competitive Scenario in U.S. and Europe.

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Base

: (All R

espo

nden

ts)

No gu

aran

teed

retu

rns

Too m

uch p

rice f

luctu

ation

Inve

sting

in ca

pital

mar

kets

is ve

ry ris

ky

Lack

of in

form

ation

abou

t inv

estin

g in c

apita

l mar

kets

Neve

r app

roac

hed b

y a br

oker

/ inv

estm

ent a

dviso

r

No kn

owled

ge of

whe

re to

buy E

quity

/MF/

ULIPs

Not e

noug

h mon

ey to

inve

st in

Capit

al m

arke

ts

No lo

an av

ailab

le on

inve

stmen

t in c

apita

l mar

kets

Too m

any p

rodu

cts th

at co

nfus

e me

Frien

d/re

lative

s had

bad e

xper

ience

inve

sting

in ca

pital

mar

kets

No tr

ust i

n bro

kers

Mon

ey w

ould

get t

ied up

for l

ong t

ime

MF/

ULIPs

offer

low

rate

of re

turn

Lack

of ac

cess

to tr

ading

on th

e sto

ck ex

chan

ge

1207 % 66 65 62 56 50 47 45 40 35 35 33 29 27 25

Over

all

466 % 66 69 67 47 52 44 45 43 34 33 31 24 27 19Ti

er 1

424 % 67 66 60 59 51 48 41 41 32 36 36 33 28 22Ti

er 2

317 % 65 57 58 63 45 50 50 33 42 38 32 32 25 38Ti

er 3

290 % 63 64 62 51 41 42 38 37 32 29 31 27 25 23

Busin

essm

an

128 % 62 55 65 66 57 46 42 38 30 34 30 27 24 27

Defe

nce

pers

onne

l

175 % 65 67 57 66 49 51 54 43 40 34 36 31 26 33

Hous

ewife

295 % 69 65 63 55 51 46 43 37 38 39 36 31 25 23

Sala

ried

162 % 70 67 59 46 50 44 41 44 30 39 28 26 33 17Self

empl

oyed

157 % 68 66 68 57 57 57 61 45 39 37 36 36 30 31

Stud

ent

Refer

Table

s 9(c)

& 9(

e)of In

dian E

quity

Inve

stors

Surv

ey 20

10

2. Ba

rrier

s to i

nves

ting i

n Sto

ck M

arke

t

Tables2010

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INDIAN EQUITY

INVESTORSSURVEY

200111

22000.1mn

$160bn

200923

11800~3 mn

$600 bn260 mn

Companies:Offices:Agents:Sum Assured:Subscribers

Life Insurance Business

2002 2009

Service providers: 13 14

2001 2009

Subscribers: 36 mn 500 mn

Telecom Sector

Source: IRDA, RBI, SEBI, AMFI and TRAI

Table 12: India’s Financial Inclusion Opportunity

Strong Evidenceof Financial Inclusion in

Telecom & Insurance sectors

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India has experienced success with deregulation in the Life Insurance and Telecom sectors. The number of subscribers in Telecom has jumped from 36 million in 2002 to 500 million in 2009. Hence the growth and profit potential is obvious. In addition, the potential for financial inclusion through employment generation is evident in the Life Insurance sector, where the number of agents has risen from 100,000 in 2001 to about 3 million in 2009. The potential in releasing the funds available in the banking and asset management sectors in the Indian economy to the exchange traded space are immense. It is evident that just two major exchanges that exist at present do not bring sufficient trading and financial inclusion opportunity to the Indian public. These and other associated statistics are provided in Table 12 below.

As on December 2009

National Stock Exchanges: 2

Brokers: 2100

Trading Terminals: 200,000

Market Cap: $1120 bn

Direct Investors: ~15 mn

Capital Market

AMCs: 44

Branches: 2500

Agents: 64,000

AUM: $165 bn

Users: ~47 mn

Asset Groups

Number OfCommercial Banks: 170

Branches: 80,500

SCBs Agg deposits : $875 bn

Users: ~600 mn

Banks

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3. D

river

s to i

nves

ting i

n Sto

ck M

arke

t

Base

: (All I

nves

tors)

Impr

oved

awar

enes

s of p

rodu

ctsIm

prov

ed aw

aren

ess o

f pro

cesse

sIm

prov

ed aw

aren

ess o

f tec

hnolo

gyTra

ding t

hrou

gh m

obile

Impr

oved

acce

ssibil

ity to

trad

ing on

the s

tock

ex

chan

geIn

trodu

ction

of ne

w pr

oduc

tsSa

les an

d mar

ketin

g by b

roke

rs

Refe

r Tab

le 1

0(b)

, 10(

c) &

10(

d) o

f Ind

ian

Equi

ty In

vest

ors S

urve

y 20

10

YES % 94 98 96 97 84 97 89 97 95 93 94 93 95 92 93 95 100

Over

allNo

rthEa

stW

est

Sout

hTie

r ITie

r II

Tier I

II21

-32 Y

ear

33-4

4 Yea

rs45

-55 Y

ears

Busin

essm

anDe

fence

perso

nnel

Hous

ewife

Salar

iedSe

lf em

ploye

dSt

uden

ts

NO % 6 2 4 3 16 3 11 3 5 7 6 7 5 8 7 5 0

4. In

tere

sted i

n atte

nding

train

ing pr

ogra

mm

es in

vicin

ity

Refe

r Tab

les 1

3(a)

, 13(

b) a

nd 1

3(c)

of I

ndia

n Eq

uity

Inve

stor

s Sur

vey

2010

Self

empl

oyed

73 % 62 63 56 38 37 32 19

444 % 59 53 43 41 39 30 26

Ove

rall

133 % 59 49 47 47 53 34 38

Nor

th

109 % 69 45 36 38 33 39 32East

82 % 63 48 45 56 49 21 21

Wes

t

120 % 48 68 43 26 24 23 12

Sout

h

176 % 64 64 45 40 36 26 16

Tier

1

159 % 49 50 45 39 38 26 26

Tier

2

109 % 67 39 35 44 48 42 43

Tier

3

134 % 55 47 42 34 37 25 31

Busi

ness

man

46 % 59 50 30 54 67 33 26

Def

ence

pers

onne

l

37 % 65 51 43 43 30 30 30

Hou

sew

ife

129 % 61 59 40 43 37 29 25

Sala

ried

Introduction2010

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2010

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INVESTORSSURVEY

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Second, even the existing capital market activity in the equity market is not amenable to resource raising. This is due to the fact that over 75% of trading in equities and equity derivatives are cash settled. Statistics on India versus the rest of the world in terms of equity cash and derivatives are presented in Table 10 below.

Table 11: India and the World: Equity Cash and Derivatives Trading, 2009.

The opportunity in India is even greater if one considers the existing activity in the markets. The top 5 cities in India contribute 84% to trading in 2009-10, a figure up by 6% from 2001-02. Cash trading volumes from Mumbai and Delhi alone account for 65% of cash trading and 60% of mutual funds volume. This is contrasted with the fact that these cities account for only 24% of the national income pool. Hence, correcting this imbalance offers a huge opportunity to unlock value. The statistics are presented in Table 11 below.

4.3

125

75

India

7.8

100

0

China

9.1

45

55

Japan

6.3

24

76

HK

89.3

52

48

U.S.

1.8

70

30

Canada

4.6

74

26

UK

36.7

94

6

Germany

Total Annual Volume in US$ trillionSource: Mckinsey, FICCI Report on Capital markets 2020

178% of cash equities trading in India is intraday in nature which are also cash settled

1Trading in cash equities and equities derivatives , 2009

Cash equities Equity derivatives

Table 10: India and the World: Equity Cash and Derivatives Trading, 2009

Share of cash trading volume, mutual fund ownership and income by cities (FY 09, Percent)

Source: Mckinsey, FICCI Report on Capital markets 2020

Large potential to tap household savings

Next 410 most

populatedcities

Next 8most

populatedcities

Mumbai- Delhi

10

25

65

Cash tradingvolume

22

18

60

Retail mutualfunds

63

13

24

Income pool

Contribution from top 5 cities to total share trading

2001-02

78%

India China

2009

65%

2005-06

82%

2009-10

84%

65%of Equity Cash Market Turnover is generated from Mumbai and Delhi

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45-5

5ye

ars

200 % 64 28 22 10 16

33-4

4ye

ars

315 % 55 31 22 9 20

21-3

2ye

ars

387 % 53 33 16 11 27

Stud

ent

118 % 53 39 20 12 24

Self

empl

oyed

122 % 49 35 20 12 24

Sala

ried

215 % 58 32 17 7 20

Hous

ewife

13

0 % 58 28 25 12 22

Defe

nce

Pers

onne

l 93 % 54 25 19 8 32

Busin

essm

an22

4 % 60 29 17 9 18

Tier

323

7 % 49 38 8 3 21

Tier

232

2 % 65 28 40 8 11

Tier

134

3 % 53 30 7 16 34

Sout

h32

2 % 60 34 41 13 15

Wes

t 10

0 % 83 18 15 13 15

East

20

3 % 61 32 10 14 17

Nort

h 27

7 % 38 32 3 2 37

Over

all

902 % 56 31 19 10 22

Base

: (All r

espo

nden

ts)

Mob

ile ph

one

Inte

rnet

Bank

cros

s-sell

ingAT

M fu

nctio

nalit

yAl

l of t

he ab

ove

5. In

itiat

ives t

hat c

ould

impr

ove a

ccessi

bility

to tr

ading

on th

e Sto

ck Ex

chan

ge

Refe

r Tab

les 1

6(b)

, 16(

c), 1

6(e)

& 1

6(f)

of In

dian

Equ

ity In

vest

ors S

urve

y 20

10

Scal

ePe

rcen

tage

of R

espo

nden

ts1

17%

219

%3

20%

412

%5

12%

6 5%7 5%

8 3%9 1%

10 0%

80%

6. Re

tail i

nves

tors

view

on w

heth

er st

ock m

arke

t will

bene

fit fr

om co

mpe

tition

in st

ock e

xcha

nges

Stud

ent

157 % 17 22 24 10 8 3 6 3 1 0

Self

empl

oyed

162 % 21 19 20 11 8 3 8 4 1 2

Sala

ried

295 % 17 18 21 9 12 5 6 3 2 0

Hous

ewife

175 % 13 21 14 15 17 7 6 2 1 0

Defe

nce

Pers

onne

l

128 % 16 17 25 13 17 5 1 2 0 0

Busin

essm

an

290 % 17 20 17 15 11 6 2 3 0 0

45-5

5ye

ars

260 % 21 18 17 13 16 5 3 2 0 1

33-4

4ye

ars

419 % 17 17 18 9 14 6 5 3 1 0

21-3

2ye

ars

528 % 14 21 23 14 8 5 5 3 1 0

Sout

h

322 % 8 11 16 12 25 7 9 3 2 0

Wes

t

223 % 16 28 23 14 5 4 3 4 0 0

East

283 % 31 16 15 7 13 7 2 1 0 0

Nort

h

379 % 13 23 24 15 4 3 5 3 1 1

Over

all

1207 % 17 19 20 12 12 5 5 3 1 0

Base

: (All R

espo

nden

ts)

1- W

ill be

nefit

imm

ense

ly2 3 4 5 6 7 8 9 10

- Will

not b

enefi

t at a

ll

Refe

r Tab

les 2

1(a,

b),

21(d

) & 2

1(e)

of In

dian

Equ

ity In

vest

ors S

urve

y 20

10

Tables2010

INDIAN EQUITY


2010

INDIAN EQUITY

INVESTORSSURVEY

29%of Equity Turnover is concentrated in Top 10 companies

129.3%

28.2%

12.9%

11.4%

21%

19.6%

19.2%

Turnover of top 10 companies to total BSE

NSE

Shanghai SE

Shenzhen SE

Taiwan SE

Tokyo SE

Korea Exchange

ExchangeIndia

China

Taiwan

Japan

Korea

Country

www.m x-sx.comc 4

The opportunity for India lies across various factors. The first is in addressing concentration of companies that are traded within exchanges. In 2008 and 2009, close to one third of trading on India’s major two exchanges were concentrated in the top 10 companies. Elsewhere in Asia, the figure is much lower, highlighting the opportunity for India as a comparable Asian economy. The statistics are presented in Table 7 below.

Table 7: Concentration Comparison Across Asia: 2009.

1Source: World Federation of Exchanges 2009 & 2008

Taking the comparison from across Asia to across the world, another opportunity makes itself very evident. This is the opportunity to develop liquidity in India's capital markets. This can be seen by observing India's turnover velocity and comparing equity share traded value as percentage of GDP across countries. The opportunity for India is evident in the statistics presented in Table 8 below.

The opportunity to make the capital market a hub for raising resources for corporates has a long way to go in being fully tapped. This is evident from two markets. First, in market capitalization terms, India's corporate bond market is 3% of GDP, and 5% of the total bond market. Comparative statistics across Asia highlight the opportunity. These are presented in Table 9 below.

Table 8: India and the World: Market Liquidity, 2009

Turnover Velocity as a measure of market liquidity shows turnover as a percentage to their market capitalization Source: World Federation of Exchanges (2009)

(in US$ Trillion)

Table 9: India and Asia: Corporate Bond Markets, 2009.

Market Cap of Corporate Bond as % to GDP

India 3%

Malaysia 43%

Singapore 34%

Hong Kong 35%

Corporate Bond as % to Total Bond Market

India 5%

Malaysia 45%

Singapore 41%

Hong Kong 52%

Market Cap as % to GDP Equity (India) 110%

Source: WFE Statistics and ADB Asia Bond Monitor; As of Dec '09

India1.2

1.0

87%

BSE: 17.11%

NSE: 53.89%

4.3

7.8

181%

SSE: 129.9%

SHZE: 281.1%

ChinaUS0.9

1.6

170%

KSE: 173.51%

KoreaGDP

Equity share traded value

Equity share traded as a per cent to

GDP

Turnover Velocity (July‘10)

Country14.4

47

326%

NYSE: 137.21%

NASDAQ: 348.85%

www.m x-sx.comc19

7. Ke

y ben

efits

to th

e ret

ail in

vesto

r thr

ough

com

petit

ion

Refe

r Tab

les 2

3(b)

& 2

3(d)

of I

ndia

n Eq

uity

Inve

stor

s Sur

vey

2010

Base

: (Res

pond

ents

who t

hink i

nves

tors

will b

enefi

t fro

m ne

w ex

chan

ges)

Bette

r Ser

vices

Lowe

r cos

t of t

rading

More

brok

ers p

rovid

ing se

rvice

sGr

eate

r nat

ional

pene

tratio

nBe

tter t

echn

ology

Innov

ative

prod

ucts

478 % 68 57 37 36 27 6

Ove

rall

151 % 73 63 26 42 25 1

Nor

th

89 % 65 44 40 22 30 13East

146 % 70 61 46 42 27 3

Wes

t

92 % 60 53 40 30 25 12

Sout

h

215 % 67 69 38 37 25 7

Tier

1

151 % 71 47 38 42 32 2

Tier

2

112 % 67 46 36 27 22 9

Tier

3

124 % 71 58 35 35 24 6

Busi

ness

man

56 % 84 48 32 48 25 5

Def

ence

Pers

onne

l

49 % 51 63 35 39 27 4

Hou

sew

ife

117 % 63 59 40 38 30 4

Sala

ried

68 % 74 56 35 24 31 4

Self

empl

oyed

64 % 64 55 45 38 22 13

Stud

ent

Introduction2010

INDIAN EQUITY


2010

INDIAN EQUITY

INVESTORSSURVEY

www.m x-sx.comc3

To add to the above observations on market penetration and financial inclusion, comparing direct participation in India’s equity markets could be greater, not only when benchmarked against developed countries, but even in comparison to other BRICs and Asian countries.

1.4%of India's population trades directly in equity market

Continuing the comparison, the equity segment globally contributes about 20 per cent of the total activity in the exchange traded financial markets while in India the corresponding figure is around 70 per cent.

Sources: World Federation of Exchanges and Exchange Websites

Table 5 below provides the comparison.

India and the World: Trading Across Asset Classes (in US $ Trillion), 2009.Table 5:

Asset Groups USA Europe Brazil 16India

Sources: India: NSDL & CDSL, 2009, China: SIPF China, 2010, Russia: MCD, South Korea: KSD, UK: UK Shareholders' Association Press Release, 2007, USA: ICI & SIFMA Report, 2008, Population

Statistics: CIA World Fact Book

Table 4 below highlights this fact.Table 4: India and the World: Direct Participation in Equity Markets

On a broader scale, among nations, India is positioned as a nation with a strong savingsrate, with a large penetration of mobile telephones. These and certain other salient macroeconomic facts are presented in Table 6 below.

Table 6: India and the World: Macro Economic Facts, 2009.

4.3

1.3

2,705 (SSE)

28%

NA

650

300

China1.2

1.12

1306 (BSE)

32%

32

550

80

IndiaGDP ($ trn) (2009 Est.)

Population (in bn) (2009)

Market Cap. ($ bn) (Dec 2009)

Gross household savings rate as

percentage of disposable income (2008)

No. of tax payers (in mn) (2007)

No. of mobile phones (in mn) (2009)

No of internet users (in mn) (2009)

Parameter US14.4

0.3

11,838 (NYSE)

4.4%

134

270

230

Sources: www.CIA.gov, www.world-exchanges.org and Others

UK2.2

0.06

2,796 (LSE)

2.5%

32

75

50

7India8China

9Russia10South Korea

11Uk12USA

13Population in Million1,173

1,330

139

48

61

310

Demat/Population (in %)1.4

9.4

2.2

7.4

16.41517.7

Demat Accounts in Million16.8

125

3

3.55

101454.8

4759

7242150

901

5.2%6.5%

80.4%2.3%5.5%

100%

12.428.8

620.90.07.2

669.3

EquityEquity DerivativesInterest RateFX DerivativesCommodity

Total

1.8%4.3%

92.8%0.0%1.1%

100%

0.61.57.93.4

0.02

13.4

4.7%11.2%58.8%25.1%0.2%

100%

1.23.70.00.81.6

7.3

16%51%0%

11%22%

100%

www.m x-sx.comc 20

10. SME Investors: Scope for Improvement in Indian Equity Market

Transperancy

Innovations

Bureaucracy among exchangepersonnel

Technology

Accounting standard

Exchange as facilitator

14 46 2610

9 7 9 41 30

3 7 35 33 16

3 9 14 41 29

6 4 23 36 25

3 10 29 33 16

0% 20% 40% 60% 80%


Refer Table 27 of Indian Equity Investors Survey 2010% of SME investing

79Insurance

53Equity/MF

50Fixed deposits

27Real Estate

15Government Securities

10Commodities

7Debt of companies

0 50 7525

8. SME Investors: Investment in Different Instruments

SME INVESTORS

9. SME Investors: Barriers to Investing in Stock Market

69Investing in capital markets is very risky


56No guaranteed returns

42Lack of information about investing in capital markets


31Friend/relatives had bad experience investing in capital markets


21Too many products that confuse me

21MFs offer low rate of return

19No loan available on investment in capital markets

19Bad experience with capital markets in the past

19No trust in brokers

17Money would get tied up for long time

12No knowledge of where to buy Equity/MF

0 5025


75

Survey Report2010

INDIAN EQUITY


2010

INDIAN EQUITY

INVESTORSSURVEY

Hyderabad

Rajkot

Cochin

Baroda

Bangalore

Jaipur

Indore

Coimbatore

Mangalore

Ludhiana

Kanpur

Patna

Pune

Gauhati

Bhubaneshwar

Others

Sub-total

City

2.85

0.29

0.79

0.62

2.79

1.16

1.08

0.6

0.12

0.53

0.95

0.11

1.03

0.12

0.07

12.51

25.62

2001-022.25

0.32

0.64

0.71

1.67

1.17

0.98

0.46

0.08

0.43

0.4

0.1

0.75

0.02

0.02

9.44

19.44

2004-051.73

1.28

0.76

0.7

0.62

0.56

0.49

0.33

0.22

0.17

0.07

0.03

0.03

0.01

0

5.7

12.7

2008-09Kolkata

Pune

Indore

Bangalore

Chennai

Kanpur

Cochin

Hyderabad

Baroda

Ludhiana

Gauhati

Patna

Mangalore

Coimbatore

Bhubaneshwar

Others

Sub-total

City

0.84

0.6

0.18

0.3

0.16

0.26

0.27

0.13

0.54

0.01

–

–

–

0.04

–

9.83

13.16

2001-020.96

0.63

0.46

0.74

0.4

0.44

0.12

0.2

0.02

0.34

0.06

0.07

0.07

0.06

0.02

11.44

16.03

2004-050.79

0.68

0.6

0.5

0.39

0.33

0.29

0.29

0.28

0.07

0.06

0.06

0.03

0.02

0.01

10.96

15.36

2008-09

NSEBSE

BSE

Mumbai

Ahmedabad

Rajkot

Delhi

Jaipur

Sub-total

City

84.01

0.97

0.32

1.31

0.23

86.84

2001-0275.33

3.14

1.71

3.05

0.74

83.97

2004-0572.4

4.76

3.76

2.85

0.86

84.63

2008-09Mumbai

Delhi

Kolkata

Ahmedabad

Chennai

Sub-total

40.2

19.4

9.15

2.49

3.56

74.8

47.39

14.92

12.46

2.91

2.88

80.56

55.85

14.97

9.24

5.27

1.97

87.3

City 2001-02 2004-05 2008-09

Table 2: Monthly Turnover Velocity across the World’s Stock Exchanges, January through August 2010

23.5%

70.1%

205.5%

395.6%

180.8%

239.1%

384.0%

117.1%

India

China

Taiwan

Korea

USA

Bombay SE

National SE India

Shanghai SE

Shenzhen SE

Taiwan SE Corp.

Korea Exchange

NASDAQ OMX

NYSE Euronext (US)

16.6%

51.0%

97.9%

194.4%

81.1%

152.7%

356.5%

125.4%

19.2%

57.0%

168.6%

345.1%

135.4%

171.7%

337.9%

124.7%

17.9%

54.1%

207.5%

447.2%

147.9%

188.6%

350.9%

132.1%

17.0%

57.4%

148.9%

285.2%

124.4%

190.3%

510.1%

183.3%

17.3%

54.9%

111.6%

263.8%

105.5%

162.8%

407.5%

160.8%

17.1%

53.9%

129.9%

281.1%

132.7%

173.5%

348.9%

137.2%

20.1%

58.4%

181.5%

377.6%

164.0%

161.9%

332.5%

125.8%

January2010

Country Exchange February2010

March2010

April2010

May2010

June2010

July2010

August2010

Source: World Federation of Exchanges

NSE

Table 3: Market Penetration: 2001 to 2009 City-wise Distribution of Turnover (Cash Segment) (in %)

www.m x-sx.comc 2

Furthermore, we note that over 80% of the turnover in India continues to come from the top 5 cities, a further indication of concentration, as Table 3 below demonstrates.

Source: SEBI Handbook 2009, Table 24

Above 80%Equity Turnover

in India continues to come from Top

5 cities

www.m x-sx.comc21

11. SME Investors: Drivers to Increase Investments in Equity Market


0 5025

67Improve the regulatory regime

46Improve trading and settlement operations

41Promote competition in exchange sector that leads to better service

39Greater use of technology


12Permission for OTC products

1Easy operating system


Improve disclosure standard 52




Transaction cost

Financial intermediaries

Risk management

Market penetration

Clearing services

Banking services

0% 20% 40% 60% 80% 100%

3 10 22 38 23

4 4 26 39 20

1 9 14 45 23

1 3 23 39 26

3 1 22 43 20

1 3 19 29 42


12. Corporate Investors: Investment in Different Instruments

0 50 7525

67Net Capital Market

Insurance 67

Equity/shares 57

Mutual Funds 52

Bank FDs 50

Debentures 20

Government Securities 15

Commodities 15

Real Estate 13

Refer Table 40 of Indian Equity Investors Survey 2010% of Corporate investing

CORPORATE INVESTORS

Introduction2010

INDIAN EQUITY

INVESTORSSURVEY Survey Report

2010

INDIAN EQUITY

INVESTORSSURVEY

www.m x-sx.comc1

Growth over last decade

GDP

314%

Market Capital788%

Population117%

Exchange turnover

1488%

INTRODUCTION TO INDIAN EQUITY INVESTORS SURVEY 20101 2India's GDP in 2001 was US$ 414 Billion with a population of 1 Billion . Over this decade, as at 3 42010, the GDP stands at US$ 1.3 Trillion and India's estimated population is 1.173 Billion . This

dramatic growth has reflected itself in the Indian equity market, whose market capitalization 5 6stood at about US$ 165 billion in 2001 and has increased to over US$ 1.3 Trillion in 2010.

Note that in 2001-02, there were 21 regional stock exchanges across India in addition to 2 national exchanges. Of these 23 exchanges, 16 exchanges conducted active transactions. In 2008-09, the active exchanges had been reduced to 4.

Turnover Velocity as a measure of market liquidity shows turnover as a percentage to market capitalization. The following table highlights the comparative lack of liquidity in the Indian equity market.

Table 1: Total Turnover (Cash & Derivatives Segments) across stock exchanges: 2001-09

Stock Exchange

Ahmedabad Bangalore Bhubaneshwar Calcutta Cochin Coimbatore Delhi Gauhati Hyderabad ISE Jaipur Ludhiana Madhya Pradesh Madras Magadh (Patna) Mangalore Mumbai NSE OTCEI Pune SKSE Uttar Pradesh Vadodara

2001-02

14,844 70 -

27,075 27 -

5,828 -

41 55 -

857 16 24 - -

309,314 615,092

4 1,171

- 25,237

10

2004-05

- - -

2,715 - - - -

14 - - - -

27 - -

534,8293,687,125

---

5,343 -

2008-09

- - -

393 - - - - - - - - - - - -

1,112,343 13,762,505

- - -

89 -

1.48 0.007

- 2.71

0.0027 -

0.58-

0.004 0.01

- 0.09

0.0016 0.0024

- -

30.94 61.53 0.0004

0.12 -

2.52 0.001

` Crores % Share ` Crores % Share ` Crores % Share- - -

0.064 - - - -

0.0003 - - - -

0.0006 - -

12.6487.16

- - -

0.13 -

- - -

0.0026 - - - -- - - - - - - -

7.4892.52

- - -

0.0006 -

This dramatic increase in market value ought to have been consistent with increase in market development and penetration. However, we observe that this is not the case.

If we examine the distribution of turnover from 2001 to the present, we in fact see evidence of concentration across regions and cities with turnover being consolidated across two exchanges in Mumbai.

The following tables provide evidence.

Source: SEBI Handbook 2009, Table 18 & 26

www.m x-sx.comc 22

13. Corporate Investors: Barriers to Investing in Stock Market



32Lack of information about investment in equity

26Investing in equity (shares) is very risky

26It does not give guaranteed returns

21I would not get loan against a equity (shares) investment

16I have had a bad experience in equity (shares) in the past

11There are too many products that confuse me

11I don't know where to buy equity (shares) from



0 5025

14. Corporate Investors: Scope for Improvement in Indian Equity Market


Innovations 2 2 20 41 34

Bureaucracy among exchange personnel 5 20 61 15

Technology 5 12 51 32

Accounting standard 2 27 39 32

Exchange as facilitator 32 46 22

Transperancy 5 24 41 29

5 2 22 44 27Transaction cost

2 5 20 41 29Financial intermediaries

2 2 32 41 22Risk management

7 17 49 27Market penetration

5 27 41 27Clearing services

24 51 24Banking services

0% 20% 40% 60% 80% 100%


Survey Report2010

INDIAN EQUITY


2010

INDIAN EQUITY

INVESTORSSURVEY

About MCX Stock Exchange

MCX Stock Exchange (MCX-SX), India’s new stock exchange, commenced operations in

the Currency Derivatives Segment on October 7, 2008 under the regulatory framework

of Securities & Exchange Board of India (SEBI) and Reserve Bank of India (RBI).

A new generation stock exchange, MCX-SX offers a world-class electronic platform for

trading in currency futures contracts and is currently the market leader in this segment.

Clearing and settlement is conducted through the MCX-SX Clearing Corporation Ltd.

(MCX-SX CCL).

Since inception, MCX-SX has been spearheading financial literacy and financial

inclusion in India, as is envisaged by the Govt of India. The Exchange has been the first

in India to unveil various revolutionary practices for currency price dissemination and in

spreading financial literacy in India. MCX-SX, till now, has conducted more than 400

investor education programmes across the country, averaging at least one per working

day, and has roped in a wide array of partners like the media, educational institutions,

trade bodies and international organisations to jointly promote financial literacy and

introduce global best practices in India.

True to its philosophy of ‘Systematic Development of Markets through ‘Information,

Innovation, Education and Research’, MCX-SX endeavours to ensure continuous

innovation and to introduce various new products under the extant regulatory

framework. The Exchange is poised to commence Equity segment and Equity Futures &

Options segment on receiving regulatory approvals. Besides, it is also committed to

expand its product offerings to include other asset classes such as Debt, Interest Rate

Futures, Index Funds and Exchange Traded Funds and SME segment securities, on

receiving regulatory approvals.

www.m x-sx.comc23

15. Corporate Investors: Drivers to Increase Investments in Equity Market

Notes


0 50 7525

Improve the aspect of regulatory regime 59

Improve the trading and settlement operations 51


Promote competition in exchange sector that leads to better service 44

41Improve disclosure standard 41


Greater use of technology 39


Permission for OTC products 7


Survey Report2010

INDIAN EQUITY

INVESTORSSURVEY

Project Leader: Dr. Ranjan R Chakravarty, Head, Research & Product Development, MCX Stock Exchange

Project Team:Project Coordinator: Arbind Kumar, FRM, Research & Product Development, MCX Stock ExchangeProject Associate: Sooraj Rao, Research & Product Development, MCX Stock Exchange

Research Team:Research Coordinator: DG Praveen, Research & Product Development, MCX Stock ExchangeResearch Associates: Kaveri Deshmukh and Chaitanya Wangikar, Research & Product Development, MCX Stock Exchange

Communications Team: Amrita Nanavaty, Rini Mukherjee and Mohmad Shaikh, Communications, MCX Stock Exchange

Survey Team:The Nielsen Company

Acknowledgements:We are grateful for the support of Mr. Joseph Massey, Managing Director & CEO, MCX Stock Exchange, for the entirety of this project. We also gratefully acknowledge the contribution of Dr. Bandi Ram Prasad, President, FT Knowledge Management Company, Mr. U. Venkataraman, Executive Director, MCX Stock Exchange, Mr. Sanjit Prasad, Director, Business Development, MCX Stock Exchange, Mr. G. Sankaranarayanan, Sr. Vice President, Marketing and Business Development, MCX Stock Exchange, Mr. Saji Cherian, Head, Corporate Services and Market Development, MCX Stock Exchange, Ms. Latika Kundu, Head – Market Operations, MCX Stock Exchange, Mr. Setu Shah, Sr. Vice President, Communications, MCX Stock Exchange, and Ms. Jyoti Rai, former Vice President, Marketing and Business Development, MCX Stock Exchange. We thank each one of them for their suggestions and support, which have been critical for this project.

Indian Equity Investors Survey 2010

www.m x-sx.comc 24

Board Of Directors & Advisory Board

! Mr. Ashok Jha, IAS (Retd.) Chairman, Former Finance Secretary

! Mr. Jignesh Shah, Vice Chairman, Chairman & CEO, Financial Technologies (India) Ltd.

! Mr. Joseph Massey - MD & CEO

! Mr. V Hariharan - Director

! Dr. Nitish Sengupta, IAS, (Retd.) - Director, Former Revenue Secretary and Member Secretary, Planning Commission

! Mr. Atul Rai - Director, CEO & Managing Director, IFCI Limited

! Mr. Vepa Kamesam - Director, MD, Institute of Insurance & Risk Management, Hyderabad and Former Dy. Governor, RBI

! Mr. S S Thakur - Public Interest Director, Former Chairman, Central Depository Services (India) Ltd. and Founder Chairman, HDFC Bank Ltd

! Mr. C M Maniar - Public Interest Director, Senior Partner, Crawford Bayley & Co

! Mr. B D Sumitra - Director, Former Managing Director, CCIL and Former Deputy Managing Director, SBI

! Mr. C VR Rajendran - Director, General Manager - Corporation Bank

! Mr. V K Khanna - Director, General Manager - Union Bank of India

! Mr. P K Chhokra - Director, General Manager - Punjab National Bank

! Mr. A A Badshah - Director, General Manager – Bank of India

! Mr. U Venkataraman - Executive Director

! Mr. G N Bajpai, Chairman of Advisory Board, Former Chairman, SEBI & LIC

! Mr. Venkat Chary, IAS (Retd.), Former Chairman, Forwards Markets Commission (FMC), Former Secretary to the Chief Minister of Maharashtra

! Mr. A V Rajwade, Risk Management Consultant- Forex, IRD, Derivatives; Formerly with SBI

! Mr. Ganesh Rao, CEO, IBS Forex LtdFormer Chief Trader, FX, Bank of America

! Dr. L. C. Gupta, Director, SCMRD Former Member, SEBI

! Mr. Jamal Mecklai, CEO, Mecklai Financial

! Mr. Naresh Deshpande Former Principal Legal Advisor, RBI

! Mr. Paul Joseph, IES (Retd.), Principal Advisor, Former Principal Advisor, Planning Commission

2010

INDIAN EQUITY

INVESTORSSURVEY

BOARD OF DIRECTORS

ADVISORY BOARD

INDIAN EQUITY INVESTORS SURVEY 2010

Information Innovation Education Research

- Dr. Ranjan R. Chakravarty Head, Research & Product Development, MCX Stock Exchange

Highlights:

Huge potential for market penetration, development and financial inclusion

Financial education for better awareness and Competition for greater benefits

Mobile phones are the preferred channel for equity investing

Concise Report

- Survey conducted by The Nielsen Company

MCX Stock Exchange Ltd.Exchange Square, Suren Road, Andheri (East), Mumbai 400 093, India. Tel: +91-22-6731 9000, Fax: +91-22-6731 9004.

Email: [email protected] Website: www.mcx-sx.com MCX

-SX/

Oct

ober

201

0IE

IS-C

R/In alphabetical order

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