Srinagar, Feb 16: While the crossing of 10,000-mark by the benchmark stock index for the first time has brought smile to the faces of countless share traders across India, investors in Kashmir too have a pie in the cake. The derivative market in Kashmir has zoomed large over past some years, with 10k magic figure at BSE bringing a renewed vigor in them.
Business associations at many BSE/NSE online outlets here told Greater Kashmir about massive client rush they have been receiving. “More and more prospective investors are showing keen interest in seeking information about equity markets,” says a sub-broker at a local on-line NSE terminal.
However, given the general lack of information among investors about equity markets, many of them fell prey to sub-brokers that are not registered with the Security Exchange Board of India (SEBI). These franchisees make them to invest without educating them properly about various nuances of the trade.
“People should approach registered and professional sub-brokers whose terminals are certified by the NCFM or National Certification in Financial Markets,” says Chander Bhan Bhasin, business association with Aarbee Securities.
Bhasin whose online NSE/BSE terminal he claims was the fist to foray into Srinagar says that many unregistered sub-brokers have opened their outlets without having the professional training or any certificate from the NCFM. Bhasin says one of the advantages of doing trade through a registered and certified sub-broker is that the clients remain affiliated with the SEBI.
Muhammad Tehsin a young entrepreneur who has earlier suffered some losses in day trading due to unawareness of the share markets says that most of the sub-brokers in Kashmir are more concerned about their own commission than the benefit of their client. “They lure the clients to make investments beyond their capacity which most often leads them to financial losses,” Tehsin says.
Bilal Ahmad, a MFC student cautions about investing beyond one’s capacity. “Once you invest more than you have in your kitty, you have no option but to square off of sell your shares on the same day even at lower prices,” Bilal says.
Zubair Iqbal, branch manager, HDFC Bank feels that for an ordinary investor in Kashmir it is better to invest in mutual funds. “Since your portfolio is professionally managed in MFI, it is safer to invest there,” says Zubair adding that HDFC Srinagar is the first financial institution to start mutual funds in Srinagar some nine months ago. During this period the bank has received rupees ten crore from investors. Zubair claims that everybody who has invested in the MFI through HDFC has earned.
Saying about the advantages of the MFIs, Zubair says returns in MFI are better than any other traditional investment options. “You normally get six per cent annual interest on fixed deposits but if you invest in mutual funds you can earn anywhere between 20 to 25 per cent. At times the returns go even higher.
He says investors should not be swayed by the magic figure of 10k. “I have received a good number of investors intending to invest in mutual funds following the prime minister’s advise to investors to be prudent enough in making investments in the backdrop of BSE crossing 10k magic figure.”
He said the returns from MFI are exempted from tax. Besides, there are some MFIs like Tata Tax Advantage, HDFC Tax Saver which are eligible for investment deduction in income tax. Zubair says another advantage of in MFI is that no unprofessional person can plunge into it. “MFI can only be sold by those who are associated with the AMFI (Association of Mutual Funds of India),” he says.
Commodity market is of late also growing in the country with Kashmir being no exception. Bhasin says that all over the world the commodity market has witnessed a turnover of seven times in comparison to equity/share market. In a year’s span commodity market has come parallel to equity market,” he says.
He says his firm has presently 20 clients investing in commodity market and it hopes the clientele will multiply by 10 times in next some months. “Though it is a new thing for Kashmiris and in fact for the Indians too but soon the market would grow as more and more people are showing their interest to invest in it,” he says.

Lastupdate on : Thu, 16 Feb 2006 21:30:00 Mecca time
Lastupdate on : Thu, 16 Feb 2006 18:30:00 GMT
Lastupdate on : Fri, 17 Feb 2006 00:00:00 IST