Forbes -The proposal by securities regulators to phase out offshore participatory notes as a means of investing in Indian equities got a vote of support Tuesday from investment guru Mark Mobius. Hesaid such a move wouldn’t stop the record flow of foreign funds into India.
However, Mobius, managing director at Templeton Asset Management, said the Securities and Exchange Board of India should improve direct access to the capital markets for foreign investors. “The flow will continue, depending on how liberal the new registration is,†he said at an industry conference here.
The benchmark Sensex index of the Bombay Stock Exchange rose a record 878.85 points, or 5%, closing at 18,492.84 on Tuesday. The National Stock Exchange’s Nifty rose 289.70 points, or 5.6%, to 5473.70. The highs came after the market regulator scaled back a proposed ban on brokerages using offshore derivatives for trading (See: “ India Assures Market Foreign Money Won’t Be Cut Offâ€Â).
When news of the proposed ban emerged last week, the Sensex initially dove almost 10%, triggering a one-hour trading halt, before recovering most of its losses. Analysts say market volatility is likely to continue over the short term, but foreign investors will remain interested in India’s growth story over the long term.
