Budget Reaction from Mr. N. K.
Prasad, President & CEO, CAMS for your kind perusal.
Union Budget 2017-18 Reaction:
Union budget’s focus on addressing growth with a tilt
towards rural and infrastructure spending while keeping fiscal prudence intact
is directionally positive for the Mutual Fund (MF) industry. Fund industry has been
witnessing secular growth cycle for last three years with industry AUM
doubling.
Industry is witnessing sustained interest of investors evidenced by
growth of investor accounts, systematic investments, and growth in B 15 cities.
Retail lead growth potential for MF industry is enormous and MF industry is
investing in investor education & awareness.
Union Budget has withdrawn RGESS targeted at growing retail
investor base, which was not popular with retail investors who found setting up
Demat accounts cumbersome.
Govt.’s intent to creating new ETFs with diversified
CPSE stocks and possible inclusion of railway units like IRCTC, IRFC, IRCON
proposed to be listed is favourable for MF industry. ETFs comprised of
diversified CPSE stocks would be popular with new retail investors if such
investors could be served by the Asset Management Companies instead of
insisting on Demat accounts.
Mutual Funds have been serving large number of
investors not holding MF units in Demat accounts but transacting via stock
exchange platforms used by trading members as well as limited purpose members.
Mutual Funds have established investor servicing infrastructure with extensive
linkages to Stock exchanges, Settlement Corporation and brokers operating on
stock exchange platforms over several years without necessity of investors
setting up Demat accounts. Such a model would make ETFs popular with small
retail investors.
Mr. N. K. Prasad
President & CEO
Computer Age Management Services Pvt Ltd
(Views are personal)
K
RAVI SHANKAR
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Account
Manager – Public Relations
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