Participation of retail investors in equity markets is going to increase as a significant chunk of household savings would be routed to stock markets, said billionaire investor Rakesh Jhunjhunwala on Wednesday.
He was speaking at the launch of a new trading platform by Geojit BNP Paribas.
Jhunjhunwala who is the director of RaRe Enterprises, however, noted that retail investors would shun direct participation in the markets.
“In my view, retail investors will take the systematic investment plan (SIP) route. This was already evident in the last one year or so when mutual funds received impressive inflows,” Jhunjhunwala said.
There are 3.37 crore active folios in the equity segment of mutual fund market, Sebi data showed. The mutual fund industry saw inflows of Rs 8,903 crore into equity funds during August, which include ELSS, Amfi data showed. In FY15 so far, MFs have received inflows of Rs 47,948 crore.
His views are in line with soaring confidence of retail investors in equities. The markets remained upbeat through out 2014 as the Sensex yielded 30% returns during CY14.
Domestic institutional investors (DIIs), led by mutual funds, have helped the markets sail through the intense FPI selloff during August.
Responding to a question about high frequency trading, Jhunjhunwala said: “There shouldn’t be any regulations on Algo trading unless it is found that traders are using the technology to manipulate volumes.”