Make gradual entry in mkts, understand risks: Sebi chief to small investors

Make gradual entry in mkts, understand risks: Sebi chief to small investors

Lured by the sharp rally in stock prices, small investors are entering the markets in droves. The stock market watchdog, however, has a word of caution for them— make a gradual entry, understand the risks and take well-informed decisions.
Speaking at the industry body FICCI’s annual capital market conference Capam, Ajay Tyagi, chairman, Securities and Exchange Board of India (Sebi) said, “Increased retail participation isn't a cause of concern.” He was alluding to the sharp increase in new account openings and increase in share of retail investors in overall market volumes.
“It has to be a more gradual entry. They should start by investing in government securities (gsecs) and later move on to other products. They should take well-informed decisions,” he said.

Tyagi said increased retail participation is a sign that investors are putting a trust in corporates and they should ensure that the trust is not broken. He called India Inc to remain transparent and share as much information as possible in the public domain so that the investing community remains updated.

This was one of the reasons, Tyagi said, why Sebi didn’t accede to the demand of allowing companies to club their June and September quarter result announcement. “Retail investors showing trust is a great opportunity,” he said.
He said currently the ball is in the government’s court when it comes to allowing use of dematerialized accounts (dmat) for investing in g-secs.