Saturday, April 30, 2011

Gujarat Household Invests in Equity at par with Developed Countries

Gujarati people are not only good businessmen, but are good investors as well. According to a A working paper by a faculty of IIMA, Prof Siddhartha Sinha says one out of every four Gujaratis invests in stocks which is six times the national average of India.

The paper says 24.1% Gujarati households invest directly in equity as against the all-India figure of 3.7% households investing in equity. In contrast the neighbouring state Maharastra where the business capital Mumbai comes falls in the bottom five states of the country with only 2.5% household investors participating directly in equity.

Participation of Gujarati households in equity investment is better than some of the developed countries as well like France (15), and Germany (9%). It is remarkable is that the equity participation by Gujarati households is comparable with that of US and Canada, where investor participation rates in the domestic stock markets are 26% and 25% respectively.

Not only direct equity but in bonds and mutual funds investments also the share of Gujarat is higher than most of other states of India. According to the paper, 26.2% Gujarati households invest in bonds, while 17.4% invest in mutual funds. With 34.9%, Gujarat heads the list of Indian states in total investors, followed by Chandigarh with 24.2%, Andhra Pradesh with 24%, Pondicherry with 16.2%, Haryana with 13.6% and Goa with 9.8%.

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