The Indian Exchange-Traded Securities Market

September 19, 2007

Abstract

Bangalore, India 19 September 2007

Indian markets will continue to remain a global favourite in the near future, due in large part to the significant role of foreign institutional investors.

In just five years, India leapt from a state of primitive trading infrastructure to one of the most modern exchange-traded securities markets, comparable to the best in the world. Today, it is characterised by two main stock exchanges that rank third and seventh in the world in number of trades in equity shares, a strong trading and technology infrastructure, a wide array of market participants, a paper-free securities market, and T+2 settlement with straight-through processing.

In a new report, , Celent examines the growth of this market, looking at how technology has influenced its rise as a global top performer. The Indian market has garnered the attention of the global investing community due to its high returns and widespread international participation. Over the last four years, the Indian equity market has outperformed most of the global markets, with an annual return exceeding 30% each year. The market capitalization has reached US$1 trillion, and Celent expects it to reach US$1.4 trillion by the end of 2008.

The most significant investor group over the past few years has been the foreign institutional investors, over half of which are registered in the US and UK. 

"High growth and globalisation of the Indian economy and its corporate sector, coupled with investment-friendly regulations and an efficient electronic trading systems are a continuous source of attraction for foreign institutional investors," says Sandeep Hebbar, senior analyst and author of the report.

The 32-page report contains 26 figures and two tables. A table of contents is available online.

Members of Celent's Institutional Securities & Investments and Retail Securities & Investments research services can download the report electronically by clicking on the icon to the left.  Non-members should contact info@celent.com for more information.  

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
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Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
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Tel.: +81 3 3500 3023

Table of Contents

Bangalore, India 19 September 2007

Executive Summary 03
Introduction 05
Overview and Market Segments 07
  Equity Markets 07
  Debt Markets 09
  Derivatives Markets 10
  Market Composition 12
  Market Participants 13
  Trading Characteristics 17
Market Performance and the Role of FIIs 20
  Market Performance 20
  Role of FIIs 22
  Retail Investors 27
Market Infrastructure 29
  Trading Infrastructure 29
  Post-Trade Infrastructure 30
Conclusions 32

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