NRIs into Stock Market- Boom for Brokers

Brokerage houses are taking full advantage of the Falling interest
rates on foreign currency deposits of non-resident Indians (NRIs). Escalating
their reach in the overseas markets, broking houses are tempting the
NRI community to invest in the flourishing domestic equity markets.

The reports from RBI shows that the annual inflow of NRI deposits in
the country for 2006-07 was $3,895 million in 2006-07, an increase from
$2,789 million in 2005-06, with NRIs major from US, UK, UAE

Brokerage houses are also looking to expand aggressively in overseas
markets to tap NRIs. The immense rise in the value of rupee, the strongest
since February 1998, banks have reduced the rates on FCNR deposits to
about 3.8 per cent for two-year, dollar-denominated deposits.

For NRI rupee-denominated deposits, rates were down by at least 15
basis points or about 4.45 per cent for two-year deposits as against
8.85 per cent for domestic depositors. According to Mr Kaushal Sampat,
chief operating officer, Dun & Bradstree, "NRI investments
would soar in the coming years as a consequence of the depreciating
dollar."

The benchmark stock indices have raised 45 per cent-plus annually over
the last three years and the returns are expected to continue as a result
of the India growth story.

Apart from massive investment in property, NRIs also taking keen interest
in company deposit schemes.

Photo: Manhattan Financial District from Brooklyn Bridge (7237204156) by Ken Lund from Reno, Nevada, USA, licensed under CC BY-SA 2.0, via Wikimedia Commons.