Investment in equity markets by Indians has tremendously risen in recent times. The share of stocks in savings by Indians is now at an all-time high of 4.8 percent, up from 4.3 percent in March 2021, a report by Jefferies stated.
Barring 2021 and 2022, the highest it has been within the last 2 decades was in 2008 when it was at 4.2 percent, informed Jefferies.
“Our proprietary analysis of Indian household asset holdings (since fiscal 2006) suggests that equities as a percentage of households’ net worth have risen to an all-time high, though it is still below 5 percent,” the Jefferies' report said.
The most well-liked mode savings, however, continues to be real estate, which stands at 49 percent of the total household savings while the safe-haven investment gold, which is at a 15 percent share, it added.
Among monetary savings, bank deposits have a 15.1 percent share, the report identified and noted that over the past eight years, financial assets as a percentage of total assets have been up around 8 percentage points.
Financial savings are around 36 percent of the total $11 trillion stability sheet, it pointed out, adding that the most preferred mode of investments within financials remains bank deposits.
Physical assets - property and gold, nonetheless, continue to be dominant, even though it has decreased eight percentage points, which was added to the financial savings, highlighted the report.
The report also stated that though Indians don’t earn a lot, it has a legacy of a high savings rate.
“A look at national accounts data for FY21 and savings trends for FY22 show that total household savings are trending above ₹50 trillion/$700 billion for the past two years. While there were a three percentage points jump in savings versus trend, we estimate total household savings as a percentage of GDP in FY22 go back to the pre-Covid level of 23-24 percent,” Jefferies said.
It further added that Indians invest in stocks by a number of means, of which mutual funds are the first choice.
