‘MARKETS CAN GO DOWN AND YOU SHOULD BE WILLING TO TAKE ON THE RISK'

BSE MD & CEO Ashishkumar Chauhan says markets do not promise guaranteed returns and investors should go by their risk appetite

- ASHISH RUKHAIYAR

ASHISHKUMAR CHAUHAN values wealth creation over liquidity. The BSE MD and CEO explains that this is because more wealth leads to job creation. The BSE is Asia’s oldest stock exchange, whose benchmark, the S&P BSE Sensex, is looked upon as the barometer of the Indian stock market. In an interaction, Chauhan—who has been at the helm of the exchange since 2012— talks about the current rally, the safety of the markets and what investors should do to stay safe . He also speaks on the pitfalls of encouraging a trading culture instead of an investment culture. Edited excerpts from an interview with BT:

The Indian equity markets have registered a one-way rally, touching record highs almost on a monthly or weekly basis. That has attracted a record number of new investors to the market who are investing actively whether directly or through mutual funds. Do you think there is a risk as they seem to be chasing past returns?

In any asset class, retail investors typically chase past returns. It means they look at the past one year and assume the future would be similar even though it is a wellknown fact that the past is not a good guide to predict the future. But this does not get registered in an intuitive manner. The fact that investors are chasing past returns is not an India-specific trend and is happening globally. And that is how the cycles occur in the stock markets. Today there is complete automation with KYC also being done through video. So, the past 18 months have seen new clients coming from practically every pin code. This is a larger spread of investors and, in some ways, they have not seen the down cycle. So, everyone will have to be cautious and be aware of what can go wrong.