OVERSEAS STOCKS WITHIN REACH

There is growing interest in American and European stocks and bonds. A few investors have made their first trade.

- SAMAR SRIVASTAVA

For Anand Shankar, investing in the US markets was a natural choice. His day job at a private equity firm meant he had the skills to analyse companies and take a call on their growth potential. “Earlier, I would have diversified my investments by investing in gold or real estate. Now that I have a choice, I believe the US markets are a better bet,” says Shankar, 35, who had been a regular investor in Indian markets.

Shankar made his first investment in US stocks last year by allocating a fourth of his 2019 savings. News of audit shenanigans and promoter-pledged holdings that reduced shares in several Indian companies to penny stocks spooked him. He sees the aggressive enforcement by the Securities and Exchange Commission or SEC (the US equivalent of the Securities and Exchange Board of India or Sebi) as key to safeguarding his interests. “That said, scams like Enron have happened there as well,” he points out.

Shankar is among the pioneers of a trend that, while still in its infancy, is expected to grow rapidly over the next few years. In the past, rich Indian investors (defined as those with a net worth of over ₹100 crore) would diversify their holdings either by investing in overseas real estate, equities or debt. Money was routed through Mauritius or other jurisdictions that offered favourable tax treatment before being sent on to Dubai, the UK or the US.