Not a Good Sign

I think retail is a very big participant in these markets. Whenever retail participation is very high, it is not a good sign. In stock markets, the majority is seldom right over long periods.

If you look at the retail flow of savings into equities, roughly $40 billion a year is coming to mutual funds. Maybe, $15 billion net flows into the insurance industry and another $10-15 billion is coming through the EPFO and the NPS. If you assume direct participation in stocks to be another $10-15 billion, it adds up to $80- 100 billion per year.

India’s pool of household financial savings is about $300-350 billion; 10% of the GDP. This suggests that almost 30% of household financial savings is now getting into equities

said Prashant Jain, CIO, HDFC AMC

One reply on “Not a Good Sign”

all these numbers are wrong…please see the jefferies report. it says total hh savings at usd 700 billion – about 23%. Of this only 5% coming to equity – about usd 35 billion. I wonder where PJ is getting his numbers from.

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