Just Came Across this how true is it?? And if it is true why only foreign investors and not for Domestic Investors, ?
yeah to be expected. RBI did similar by offering high yield bonds only to foreigners.
Rupee Capital is kept repressed with not much way out, Dollar capital is given full welcome as we are always short of it.
Thats why bangaru laxman wanted dollars …
One more important aspect of this proposal is the tax friction involved in portfolio rebalancing.
Today, even if an investor wants to exit an underperforming mutual fund and move the money into another fund, the transaction can trigger capital gains tax. In other words, even though the investor is not actually withdrawing the money for personal use but simply trying to make a better investment decision, a portion of the wealth is lost to taxation.
This often discourages investors from making timely portfolio changes.
If SEBI’s proposal becomes a reality, investors could have greater flexibility to move between mutual funds without an immediate tax liability, allowing more of their accumulated wealth to remain invested.
It could encourage disciplined portfolio rebalancing, improve access to professional fund management, and help retail investors participate in equity markets without having to constantly pick and manage individual stocks.
Given how the current market is held together by retail and DIIs, govt should look at reducing or removing LTCG for domestic investors as well. FIIs have been on a sell spree for a while now, lowering it for them and domestic could help stabilize the market even more.
Also I do think US mid term election results might also give a push on whether they’d want to push forward with this or not