Demystifying Stocks

Investment Opportunities for NRIs-By B Gopkumar, Executive Vice President and

Head (Broking), Kotak Securities

Current Scenario

Investment Opportunities for NRIs

Regulations Involved

Choosing Service Providers

Useful Tools

Opening an A/C

Investing

Monitoring & Review

Investment Opportunities

NRIs

Current Scenario

Bank deposits seem like the most convenient option for NRIs considering the recent doubling up of duty on Gold.

The opening up of interest rates by RBI coupled with an all-time high dollar rate gave them a unique opportunity to stay invested in NRE Funds which were offering rates as high as 9.60% tax free.

Duty on Gold has doubled up Therefore bank deposits are a convenient option

The biggest chunks of NRI monies are parked as Bank Deposits in India

Investments in Mutual Funds are very low

1.5% to 2% of stock market volume

5% to 6%Of total deposits

Current Scenario

Regulations The regulators permit NRIs to invest in most listed scripts (except for some

restricted list by RBI).

Investments need to be through the Portfolio Investment Scheme route.

This means that the only additional requirement for an NRI investor is to open a designated PINS bank account for investing in Equity markets.

A PAN card is mandatory to open an account.

NRIs aren’t allowed to do intra-day trading or trade on leverage.

Choosing a service provider• Important points to consider while choosing your service providers: • It is mandatory to have a designated bank account. • Investor needs to carefully choose the stock broker and the bank.• Opting for an online account is one of the best options as it not only gives

one the flexibility to transact at their own time (mitigating the time zone barriers), but also lets one have complete control over fund transfers and transactions.

• Some other points to consider should be:– branch service network– facility to place after-market orders– option to call and trade or speak to a dedicated equity dealer if required– access to equity research and – Dedicated customer service for NRI clients.

Useful Tools Diversification is a good investment strategy and your trading account should be

equipped to let trade not only in equity markets but also Mutual funds, IPOs, listed bonds and debentures.

One should also make judicious use of specialized tools and applications to track and analyze the markets. These tools are provided by reputed brokers as an additional benefit along with normal web based platforms.

These tools offer a wide range of information covering technical charts and details of specific stocks.

Also with recent emergence of smart phones and tablets, your trading platform should be available when you are on the move. This will ensure that you are updated with markets and don’t miss out on any trading opportunity.

Opening an A/C

• 7-10 Days required to open an account

A/C Opening

• Brokers have tie up with banks who help opening

PINS A/C

PINS A/C • Attested documents required by designated

authorities• NRI’s physical presence

not mandatory

Documentation

• Regulators have reduced the no. of signatures

needed

Signatures

Investing

Start investing in blue-chip companies

Seek consultation and make informed decisions

Consider investing in ETFs – An efficient investment option

Refer research reports and basis your risk appetite, invest in different companies

Grow your investments

Monitoring and Review

Invest

Track your Portfolio

Monitor Returns

Periodic Analysis

Determine Strategy

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• Disclaimer: Investments in securities are subject to market risks, please read the SEBI prescribed Combined RDD prior to investing.

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