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Mr Gul Teckchandani

Jayanta Mallick

Kolkata, Oct. 22 Responses to SEBI clarifications on the issue of access to the Indian market through participatory notes on Monday appear to have cleared the air of confusion to a great extent.

According to Mr Gul Teckchandani, former CIO of Sun F&C and now an independent equity strategist, the confusion has lessened since the last week’s discussion paper was issued. “Everybody is looking forward to an evolved form of norms after SEBI board revisits the whole gamut of issues related to PNs and their uses on October 25,” he added.

The migration of investors, who have so far been using PNs to access Indian equities, to direct investment through registrations, he hoped, would be seamless. The future path, clearly outlined by the SEBI Chairman, Mr M. Damodaran, with a view to calibrate the inflow from overseas would hopefully manage rupee appreciation.

Mr Ashith N. Kampani, Managing Director of JM Financial, told Business Line that Mr Damodaran has been able to generate a positive feeling and obviously the clarity has emerged. “Undoubtedly the confusion has significantly been reduced”. He also felt that on October 25, the market regulator’s mind could be read better in terms of fine-prints.

Majority of the respondents to Business Line query after the event suggested that in the medium-to-long-term the dollar inflow is not going to come down because of the proposed restriction, the quality of the money flow could be recognisable through establishment of transparency.

“SEBI has opened the front door. The massage is loud and clear – backdoor should be avoided”, said an official from overseas brokerage.

Though official comment from Merrill Lynch, one of the top five PN issuers in India, was not available, the latest report (October 15) from Merrill Lynch Asisa Pacific Equity Strategy Group raised weight for Indian equities to 7 per cent, a level described as “market weight”.

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