Mumbai: The performance of the Indian capital market compares favourably with those of other major global economies, the chairman of the Securities and Exchange Board of India (Sebi), Ajay Tyagi, said on Friday.

Indian markets do better on parameters such as returns on equities, volatility and currency movements compared to global peers, he said at the Financial Markets Summit organized by the Confederation of Indian Industry (CII).

“The volatility in the Indian equity market at 12% is among the lowest compared to major developed and emerging markets like UK (12%), US (16%), China (19%), Japan (17%), South Korea (14%), Hong Kong (19%) and Brazil (21%)," said Tyagi.

Globally capital markets will continue to remain volatile in the coming times on account of various factors including uncertainty in oil prices, the move towards normalization of monetary policies by central banks across jurisdictions, especially the policy stance of US Federal Reserve and the US-China trade dispute and geo-political risks, he said. On the domestic front, non-banking financial companies and housing finance companies have been facing tight liquidity since September, though much has improved on account of various steps taken by the Reserve Bank of India (RBI) in providing systemic liquidity. “Of course, the biggest bonanza for the Indian economy has been the fall of about 30% in crude oil prices in the last one month. The macros of the economy have improved much since then," Tyagi said.

The development of alternative investment funds (AIFs), real estate investment trusts (REITs), infrastructure investment trusts (InvITs) and municipal bonds has also been gradually gaining prominence over time, he said. As of September, a total of 476 AIFs are registered with Sebi with a cumulative commitment raised of around 2 trillion since 2013. “Sebi is in touch with market participants and if any further changes are warranted in the regulations relating to REITs, InvITs, or municipal bonds, appropriate action would be taken accordingly," Tyagi said.

Evolving macroeconomic challenges because of rising interlinkages between global financial markets and domestic real economy are likely to catalyze development and deepen domestic financial markets, according to the CII-India Ratings and Research report, Evolving Macro and Micro Challenges to Deepen Capital Market Development’, released at that summit.

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