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NISM

The May 2025 newsletter discusses the investment performance of gold versus NIFTY 50 for Indian households over the past 20 years, highlighting that consistent gold purchases yielded a higher return compared to equity investments. It also covers recent financial market developments, including RBI's rate cuts, flat revenue growth for Indian companies, and the growth of India's venture debt market. Additionally, the newsletter emphasizes the importance of financial literacy and behavioral training for better investment outcomes.

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11 views19 pages

NISM

The May 2025 newsletter discusses the investment performance of gold versus NIFTY 50 for Indian households over the past 20 years, highlighting that consistent gold purchases yielded a higher return compared to equity investments. It also covers recent financial market developments, including RBI's rate cuts, flat revenue growth for Indian companies, and the growth of India's venture debt market. Additionally, the newsletter emphasizes the importance of financial literacy and behavioral training for better investment outcomes.

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guptajyoti1020304050
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We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF or read online on Scribd
May 2025, Volume 41 NEWSLETTER A Capacity Building Initiative of SEBI From Director's Desk Indian households have always had a deep rooted affinity for gold. Indians purchase gold not only for cultural and emotional reasons, but also as a long term investment. Now, with gold prices scaling the Rs. 100,000 mark per 10 grams, this has turned out to be one of the best investments that indian households have made. Many indian households buy a small amount of gold every year, especially on Akshaya Tritiya. Let us examine how they would have fared if they had consistently bought 10 grams of gold each year, on 1” April of the year, from 2005 to 2024, and sold the entire holding on 1* April, 2025. Would they have been better off compared to investing the same amount, annually, in the NIFTY 50? On 1" April, 2005 gold was at Rs.6180 per 10 grams. By 2012, gold prices had surged past Rs 28,000 per 10 grams. Gold continued its relentless upward move, crossing Rs. 50,000 per 10 grams in 2022, Rs. 60,000 per 10 grams in 2023, Rs. 70,000 per 10 grams in 2024 and Rs. 90,000 per 10 grams in 2025. Summing up 20 years of investments in gold, the total outflow for the purchase of 10 grams of gold every year, amounting to a total of 200 grams, would have been Rs. 6,00,000. Selling the entire 200 grams at the 1* April, 2025 price of Rs.92,830 per 10 grams would have yielded Rs.18.57 lakhs ~ an extended internal rate of return (XIRR) of 13.19%. In contrast, let's suppose that the household, instead of buying gold, invested the same amount each year into a NIFTY 50 index fund. The index stood at a level of 2067 on 1st April, 2005 and steadily rose to a level of 22,462 by 1 April, 2024. The annual contributions of the household would have helped them accumulate about 70.72 units of the index fund, over the 20 years. If the household sold these units on 1* April, 2025, at an index level of 23,165, it would have yielded them Rs.16.38 lakhs ~ an XIRR of 11.90%. Very clearly, the recent spurt in the price of gold has benefited Indian household significantly, as Indian households have traditionally been investors in gold rather than being equity investors. The returns from golds have, over the last 20-year period, outpaced the returns from equity. While past performance is not an indicator of future returns, gold as an asset class has helped Indian household create wealth for themselves while at the same time offering them psychological comfort and downside protection. In uncertain times, gold most definitely retains its place as a stabilizing asset in a diversified portfolio, Sashi Krishnan Director, NISM In Maer ance Data May 2025, Volume 41 ea See nak nan me tty 24334.2 22604.85 17102.55 76 42.28 semen s02s2.24 7448278 «5706087 77 408 mine 208 204 208 secre n6 207 ne ratte) 6 6s 4 -sobps 200 bps (towresee(eans 6.36 718 714 -082bps bps mu 84.4 83.4 76.4 1.2 10.5 =) 136 168 12186638 02% Ea na 110 23.02 a “2 40s 266 aa sos ‘Source: Bloomberg & AMF! ong eget ¢ Lucky wine's i, 2025 ee. & « Tejas Shrivastava YS “Ody: « Vinod Kumar : 4 + Ishita Shrivastava Win attractive ere] answering simple Quiz. ee Mira () pages.... May 2025, Volume 41 FINANCIAL MARKETS DEVELOPMENTS: Banks cut lending rates post RBI rate cut a Leading Barks have cut their lending rates after RBI reduced the key repo rate by 25bps to 6.00% at its Monetary Policy Review on April 9th, April 2025 RBI MPC minutes paints a dovish monetary picture RBI MPC members say elevated uncertainty, moderate inflation and lower growth warrants policy easing —<7 India to take modest hit from tariffs: Moody's a Moody's sees limited impact of US tariffs on India, but global trade tensions may slow 2025 GDP growth to 5.5-6.5% amid weaker exports IMD forecasts “above normal” monsoon in 2025 <7 India is expected to receive 5% above-normal monsoon rainfall, aiding crops and reservoirs but possibly causing intense rain and floods, says IMD 10 yr bond yields at 3 yr low 6.32 —] 1O-year bond yields fell to 6.32%, driven by RBI liquidity infusion and rate cut hopes. Traders expect 6.25% Sindoor and Financial Operation impact on markets Short term volatility to be balanced against long ‘term fundamentals. = India Inc revenue growth flat in Q4, but margins to widen: Crisil once] India ne’ revenue growth will stay fat at 56% in Q4, but profitability will improve, driven by consumer sectors and better operating margins, says Crisil Ratings RBI to buy 1.25 lakh crores of gsecs through OMOs —7 RBI decides to inject liquidity into banking system in 4 tranches by buying govt securities Geopolitical tensions and trade war fears weigh on Indian markets: Ajay Bagga = In this Interview market expert Ajay Bagga talks about impact of geopolitical events and trade wars on Indian markets Gold Prices hit 31 Em e) Pe co Rn oa ue Ce) Pea REGULATORY DEVELOPMENTS BSE : SEBI’s stance - Optimum Regulation & Investor education ‘Address by Shri Tuhin Kanta Pandey, Chairman,SEBI @BSE 150 Event, Mumbai, April 2025 = One state-one RRB' to be effective from May 1 et] Finance Ministry announces merger of 15 Regional Rural Banks actos 1! states, creating 28 entitles under the ‘one state-one RRB’ initiative, effective May 1 Indian Financial Markets - Navigating through shifting tides <7 ‘Address by Shri Ashwani Bhatia, Whole-time Member, Securities and Exchange Board of India, at the 24th FIMMDA-PDAI annual conference in Bali, on april 18, 2025. New “1600” Phone number series to combat fraud and — enhance investor protection in the Securities Market SEBI mandates use of ‘1600’ phone series for service calls by registered entities to protect investors and curb fraud, following TRA''s latest guidelines May 2025, Volume 41 RBI's new LCR norms = RBI's new LCR norms, effective April 2026, ease liquidity requirements, potentially freeing $35 billion for banks, enhancing credit growth and aligning with global standards SEBI has revised the cut- off timings with respect to repurchase of units in liquid fund and overnight fund schemes = Change in cutoff timings to determine applicable NAV with respect to repurchase/ redemption of units in overnight schemes of Mutual Funds Timelines for collection of Margins other than Upfront’ Margins —- Alignment to settlement cycle = SEBI circular addresses the timelines for the collection of margins other than upfront margins for trading members (TMs) and clearing members (CMs) from their clients in the cash segment Relaxation of provision of advance fee restrictions in case of Investment Advisers and Research Analysts ssa SEBI issued a circular, relaxing restriction on advance fees charged by Registered Investment Advisers (IAs) and Research Analysts (RAs). RBI's PRAVAAH Portal goes live on 1st May sag To streamline and digitize _—_ regulatory communication, the RBI has introduced the PRAVAAH portal, which will become mandatory for all financial institutions regulated by the RBI to apply for licenses and approvals. SECTORAL DEVELOPMENTS India's Venture Debt Market Grows at 58% CAGR = India’s venture debt_market reached USD 1.23 billion in 2024, growing from USD 80 million in 2018, according to a Stride Ventures report Indian Banks Surge Ahead Globally in Digital Transformation, Deloitte Report Finds my Indian banks advanced in digital banking with stronger customer relationships, improved card management, better UX, and growing ecosystem services, but gaps in integration and scalability remain Empowering Bharat’s farmers: Assessing the impact and future of the PM Kisan Samman Nidhi Yojana.. — Is the PMKSNY able to serve genuine and eligible farmers?Read on to find out Impact Investing: Balancing Returns with Purpose ‘The new generation of investors alms to achieve a positive risk-adjusted market while keeping in mind social purpose. May 2025, Volume 41 ICRA Report on Aviation Industry The outlook for the Indian aviation industry remains stable, driven by expectations of moderate growth in domestic air passenger traffic and arelatively stable cost environment in FY26. NBFCs are experiencing a moderation in credit expansion at present: says ICRA = NBFCs’ adequate capital position and healthy earnings performance help absorb headwinds on loan quality and regulatory developments INISIN Barter hoo Financial Literacy: .. Building a Strong Foundation oe Me. Amit Tvest aes ‘dint ath We invite you to an engaging and insightful session on ‘Financial Literacy: Building a Strong Foundation’ This session will also provide insights into career opportunities, industry trends, and expert strategies to excel in this growing sector. Plus, participants will receive a certificate of participation to register, click here: May 2025, Volume 41 GLOBAL FINANCIAL DEVELOPMENTS WTO Forecasts Shrinking Global Trade in 2025 == WTO warns global trade may contract 0.2% in 2025, with risks of deeper declines if trade tensions, especially US-China disputes, escalate further Hong Kong _ listings show market active as tariff turmoil slows other regions = ‘Two companies launching stock listings in Hong Kong are aiming to raise up to $270 milion, underscoring the resilience of the region's equity markets ECONOMY RELATED UPDATES India’s FY25 Direct Tax Revenue Grows 13.6% to 22.3 Lakh Crore

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