How to protect India’s shareholder capitalism from itself
A surge in equity investment is threatened by risky derivatives trading
Over the past five years India’s financial markets have undergone an extraordinary transformation. Rapid economic growth has been accompanied by a booming stockmarket, which has risen by around 80% in dollar terms. Tens of millions of Indians have become investors for the first time. The world’s most populous country is becoming a nation of shareholders. This revolution is welcome, but financial regulators are worried about sky-high retail use of speculative equity derivatives as markets have taken off. They are right.
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This article appeared in the Leaders section of the print edition under the headline “Bombay bulls”
From the November 9th 2024 edition
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