The market went up sharply last week.

There were some negatives for the Indian market namely the oil has moved up sharply and the Indian Rupee is depreciating against the dollar. Both are not good for the Indian economy.

The moment oil moved up, Government increased the petrol and diesel prices. When international oil prices went down there was no meaningful change in the prices & diesel price in India but when the international oil moved up the government increased the diesel and petrol prices sharply. We do not understand why the middle class should be taxed so heavily when the rest of the world is enjoying the reduction in the oil price.

Last week, the interest rate was cut from 8.7 percent to 8.1 percent on PPF.  National Savings Certificate interest was also reworked from 8.5 percent to 8.1 percent on National Savings Certificate, Kisan Vikas Patra from 8.7 percent to 7.8 percent.  Interest on five-year recurring deposit was cut from 8.4 percent to 7.4 percent. Even the girl child scheme Sukanya Samridhhi Account (SSA) was not spared, with a cut from 9.2 percent to 8.6 percent. With their huge bad loans and provisioning for the same affecting their profitability, India's banks may not reduce their lending rates in the near future following the slashing of interest rates on the small savings schemes.

Having cut the interest rate can we expect the Indian investors to opt for equity in the coming years? I am sure that investors will not opt equity as the stock exchanges have failed miserably in educating the Indian investors. The only aim of the exchange is to increase the trading models and increase the daily trading volime in both the cash and F&O segments.  Effectively the exchange has created new breed of traders who trade relentlessly on the Indian bourses to lose their hard earned money in trading. The daily trading volume in cash market has been increased from a mere Rs. 17 crore in 1994 to Rs 16,454 crore in the year 2016 a whooping 1000  times in the last two decades. During the same time the market capitalization of the cash market has gone from Rs 3,63,350 crore to Rs 96,54,114 crore a 30 fold increase. In the future and option the daily trading volume has increase from Rs 11 crore in the year 2000 to Rs 2,57,967 crore now a mind boggling 23000 times in the last 15 years.

Indian public do not participate in the market which is evident from the several inactive demat accounts. In a survey it has been found that in the age group of 18-59 years, a negligible 1.81% of the population hold a demat account. What should raise a red flag for regulators and policymakers is the low penetration level of the demat system—67% of these account holders live in big metros and tier-1 towns. Those from rural areas account for just 21% of this pie.

This is the penetration level of the demat account. If you further dig the data to find how many have invested more than 25 lakhs then we would be for a rude shock. Yes less than 5-6% holds equity worth 25 lakhs which clearly should know how investors view the market despite a 1000 fold increase in the daily trading volume in cash market in the last 2 decades. Technical analysts and media have created a wrong image on equity and hence the Indian investors have not made money in the market as they see the stock market as a speculative tool. Investors have missed several wealth creating ideas in the last 20 years. It is high time we have to use the market to create wealth and find ways to our financial freedom.

In order to help the small  investors, this week end we have a face to face session to inform how to benefit from the stock exchange and create financial freedom. This is not for investors who would like to make money in short term. But this is for the people who want to make wealth using the market. We would not be giving any stock recommendation but we would discuss more about how to use the system to make wealth. If you want to know how to make use of the system please leave your personal data and we would get back to you soon:

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