Mr. Varun Malhotra, Director of EIFS Pvt. Ltd discussed that all assets are functions of policy, economy, earnings and other fundamental factors. Especially for stock markets tracking industrial outputs, economy and use of sector rotation to keep up with profits of various sectors in the economy is essential. He said that in an economy, there are two ways for businesses to raise capital viz. Equity and Debt. In India, the retail participation in equity markets is less than 3% because of which the primary source of cash for businesses becomes debt. Banks prefer to supply money in the least risky projects because of which most of the money supply is directed to big corporations and little is left for growing other businesses, which is why the cost of capital shoots up for small businesses and entrepreneurs. Because of this, the entrepreneurship takes a setback in our country and the country’s growth is also hindered. So investing intelligently can help the country grow at the same time by directing savings into investments which will generate earnings. |
