Kanpur Stock：Transcript： Is there a bubble watch to burst in india？

This is an Audio Transcript of the Behind The Money Podcast Episode: ‘is there a bubble watch to build in india?’

Prsndar Voice Cliphi, this is prsndar. Welcome to this special episode where I ’m going to talks?

Saffeya Ahmedwhat You ’Rely Hearing Right Now is a Clip of a YouTube Video Posted by Man Named Prsndar.

Prsndar Voice Clipwhen It Comes to Investing, I ’m A Very Conservative Investor Or I’ M NOT A Very Speculaatic Investor.

Saffeya ahmedSundar is sitting at his live. He ’s dressed in a colord Button-Down Shirt and Square-Rimmed Glasses. He looks like a planssor.

Chris Kayit ’s Quite School-Like. It’ s like, Imagine Sitting in a Classroom with Him.

Saffeya ahmedthis is the ft ’s mumbai correspondent, chris kay.

Chris Kayhe Puts Out VideoS. Some of the Pretty Basic, Short. Others are know of longer length, you know, like 40 minutes and the good of Just Running OUGH EITHER Market Trends or Sort of Technical Advice.

Saffeya Ahmedand What Sundar is Promiseing in this Video is something that sounds a little bit unbelievable.

Pr Sundar Voice Clipi’m Going to Teach You How to Make 100 Crore.

Saffeya Ahmeda Hundred Crore, which is about $ 12mn. And he claims that you can do that just by train stocks.

Prsndar Voice Clipmaking 100 Crore is not at all different. So it ’s very, very easy, and slaow and steway that. He I’ M Going to ...

Saffeya Ahmedsunar Makes A Lot of Bold Promises to Over 1MN Subscribers to his YouTube Channel. ns as long as they ’resheant and have the capital, just like he did.

Chris kayhe has this classic rags-to-riches story. So he was born in chennai, a fairly Major City in Southern India, and he's the so of an unskilled Rer. He Became a Teacher in India, Which Isn't Exactly a Well-PAID JOB, and He Started Investing in 2007 With About $ 30,000. And Since then, He has turned that into when he says is a now roughly $ 12Mn Fortune.

Saffeya Ahmedsundar ’s Story Resonates with Many You Young Indians Who Watch His VideoS.

Chris kaythere is a huar lack of jobs or well-paid work in india, more so if you are young and just enterated the labour force. And so the IDEA LOT OF Young Ing Dians, you know, the opportunity for they to get richAnd hopeful Quickly Really Appeals.

Saffeya Ahmedyoung Retail Investors Are Part of What ’s Driving a Recent Boom in Indian Equities.

Chris KayThere ’s Been This Real Surge of Interest Over The Last Few Years, Which Has Next Really Seen Before in India. And that’ s Really Push. Road Range of Equities Right to Skyrocketing Levels, Basically.

Saffeya ahmedBut as good as this all sounds, this frenzy from domestic investors all piling into stocks could be funding a bubble.

Chris Kayyou're Seeing a Lot of PeOPLE WONDERING WHETHER The Market Can ConTInue Going on this SkyWard Direction or Like All Other Markets, when they the good timeS GOING END? WHEN is there to be a correction? When is the bubble Going toBurst? Everyone't just constinue going up forest.

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Saffeya Ahmedi’m Saffeya Ahmed from the Financial Times, in for Michela Tindra. Could Send Them All Crashing down and What Does that Mean for Investors if that happy?

India ’s Equity Markets Might Be Thriving Right Now, but this is new territory for the country. For dec defapes, it’ s pretty ben seen asinvestable.

Chris Kayit was just quite inaccessible for both Global Fund Managers and Everyday People, These Retail Investors. India has alway buren Here's a Lot of Technical Hoops to Jump Through. And for a long time, there is no easy to acceptMarket. You know, there is no online trading. There was no centerised clearing, thinks like that.

Saffeya Ahmedthings Start Slowly Changing in The 1990s. India Loosens a Lot of Those Economic RestricTions, and that Makes Equity MoresSible to EV Lirone. But Retail Investors, Everyday People Like You or Me or Me, You Know, Families Trying to Save for Retirement, They're very cautious to jump in right away.

Chris Kayyou've Alream Been Seeing the Inline Trading, Central Clearing, Stuff that I Think Westors May Take for Granteed Now. E Kind of Been Recent IntroidUctions in India. And it's ben a kind of multi-decade endeavour.You Know, Public Trust in the Markets Were Pretty Low. UP Untilla Recently, there was just a lot of things, like stock market scams that happy in the '90s aND Early 2000s.Amount of corrumping in the markets as well.

Saffeya Ahmedit Isn n’t until the mid-20110s that access for everyday people really beComes tangible.

Chris kayThere's Been a real democratulation of finance over the last decade or soKanpur Stock. Phone. There's Cheap Data. You've Seen A Proliferation of Low-Cost BROKERAGES Coming Up. YouKNow, Apps Made Everything Much Easier to Invest. You Know, Everyone Can Bring Up their Phone and Can See in Real Time When, You Know, Their Money Is Invested H ERE. It's Being deposite. Rather than having to wait a long time toKnow where things have gone.

Saffeya AhmedPlus, Regulators have getn more teeth in the pass decade to protrly, ESE Advancers Have Made Trading in India Closer to What You Might Be used to in the us or the uk.In Recent Years, that's Brought Two Key Groups of Investors to the Market.

Chris kayone, you have been the kind of everything, households who have surplus savings, this kind of growing middle class putting theIR MONEY Into S TOCKS and Particully Via Mutual Funds in India.

Saffeya Ahmedthese Are the Families that for DeCades Had Only Investested in Things Like Gold or Real Estate, or Even Just Their EXTRA CASH UNDER The MATTRESS, AN d they're now buying into regula stocks. Pretty Safe Long-Term Investments, Mobile in MutualFunds. And a lot of it is for return. But they're not the only domestic inventors that are sentia stocks on a tear.

Chris Kaythe Second Group is Really This Kind of Young Cohort of Retail Traders. in Options, Futures, The Wide Derivatives Market, But Particularly Options Trading in India.

Saffeya Ahmedthese are the guys taking advice from people like prsndar, who we must from earlier. They're mostly in their 20s and they're specification Ving on zero-day options, which chris tells me are cheap trades to makeThen, then

Chris Kaya Lot of People I have spoken to about it really Characterise this as gambling in a country? E are quite frankly just, you know, Staving Office? You Know, The Cost of Making a Trade is Relacted Fractional in India. Andia Saw a Lot of UptAKE During the Pandemic WHEN PEON WEERED DORED DOWEN WITH NOT A LOT of Activities to do.

Saffeya AhmedChris Tells Me that the Excitement Among the Young Retail TRADERS is a bit Surreal. And PR Sundar, with his youTube channel and over 1mn Ibers, is part of a gerying group of so-called "FinFLUEENCERS", or Financial Influencers that enCourage theseYoung Traders. Christ withSESSED SOME of These FINFLUENCERS in their Element When He Visited the South Indian City Bengaluru A Couple of Months Ago.

Chris Kayso I Really WANTED to See what this lookd like in some sort of physical manifestation beCAUSE, you know, obviously there is a lot of numbers involv Ed and you do't about a feleness for that kind of message. And, you know, the itsort of emotional side of this and who are these people who are really piling into this market. So I came across this summit called the Bharat Option Traders Summit.

[Clip Playing]

I turned up at this hall in Central Bengaluru and It's about a Thousand Person Capacity. It was packed with partial younginian men. ESE FINFLUENCERS OR Business Leaders or Stock Market Traders who Wee Giving Out the MasterClasses. a Lot of Technicaljargon was flouring design the room.

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I DONTENK I've Eveer Been to a Conference where the cryd was pay attention to what was being said. OT of the Guys Were asking, WHO WANTS TO BeRich, They Would All be putting up their hands. It was quite fascinating to see it in public.

Saffeya AhmedBut These Finfloncers Aren n’t NECESSARILY The MOST Qualified People to Be Giving Out Trading Advice. Om Financial Backgrounds at all.

Chris kaythere are some, but the run in india are that you are allowed to give investment advice unless you are registered with the capital markets. , So the Securities and Exchange Board of India. Now, A Lot of the FINFLUENCERS Operate in AKind of Legal Grea WHERE It is Fine to Give Out Educational Services, But Not Investment Advice. And A Lot of theM Operaate in Social Media Platforms and Also in whhwh ATSAAAPP, APPS Like Telegram, Which are very hard to police. So yes, inTheory, Anyone Giving Out Investment Advice Is Regulard by the Capital Markets Watchdog. But in Practice, that's not the case.

Saffeya Ahmedwith their Trading Advice Coming from Not the Most Qualified Sources, some of the someng first-time, traders are playing a dangerous game.

Chris Kaywhat You're Really Seeing there is people is people. Know, day to day, you've get a high risk of losing.You Know, high reward if you do come about it, but it's, you know, as we've said before, it is a bit of a businesso. ANS to play the markets, right? ALOT of them Don't NecessArily have the money to do this over a long term or a long permit of time. And per capita GDP in india is rising, but it is only like $ 2,700 at T T T T T he moment. So you've get this, youKnow, a Lot of people are macking losses in the market.

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Saffeya Ahmedcoming up: Will India ’s Market Make or Break These First-Time Investors?

[FT News Briefing Trailer Playing]

Saffeya Ahmedso Retail TRADERS Are Helping Send Indian Equities Through the Roof. But as with Any Frenzy. ARM over a portential bubble forming.

Chris KayThere's A High Level of Losses in the Market. The Capital Markets Regulator Has Come Out and SAID, LOOK, Nine Out of 10 Retail Investors and Derivatives A Re Losing Money Right Now.Stock Market is Going and if this is actually reaching bubble proportions. And if so, when is there to be a correction?

Saffeya Ahmedthat Market Corrent COULD Spawn from A Few Different ThingsNagpur Investment. Given That India's Economy Isolated, It would have to be jolted by some ESTIC. So say's economy UnderPerforms or Corporate Earnings Drop, that cored sendemings spiralling. So, chris,In the event of a very severt market correction, how core that hurt the domstic Investors? Both, you know, these youngis that are taking risky betson Atives and then also just like everything that are, you know, piling into Mutual FundsThen, then

Chris Kayso It Could Potentially Stop This Financial Democratise that We've Seen In India. , That Has only COME Up Recently and Really Take Things Back a Few Steps in Terms of Acceptance of Financial Markets andAcceptance of Sort of ModernISED DIGITAL WAYS of Sort of Investing, Really. That Could Be Stopped Right in ITS Tracks if THE Download is Particularly Brital.

Saffeya Ahmedyah, Becaue A Lot of the FIRST-TIME Investors, Right? So they might just, the lose a lot of money.

Chris kayabsolutely. If you ’V Burnt and You ’ve Taken A Big Hit in your savings beCause of a Massive download in equities, then why ‘T You go back to What Culturally and is Known and Is Familia?

Saffeya Ahmedyeah, Yeah. So if that correction does happy, the bubble does burst, the core index equity society?

Chris kayso it's different to say. It's, you know, very much a large domstic market right now. A Lot of Foreign Investors are e they consider it quite extensive. And what may have been that actually an indialityNot Really Out Globally, Not Really Have a Major Impact Because the Country is Still Very DomStical Focused. I mean, there are also, who took that only 7 Per Center of Indian HouseHold Financial Assets are helpEQUITIES and Mutual Funds, which is way les than the us, which is about 50 per center, and China, which is about 40 per center as well. APS Be Relatively Limited.

Saffeya ahmednow, you might be wondering where the indecent is in all of this. With a portential bubble forming, The GoverNMENT HAS THEIR SIGHTS SETN TRY Ing to take some Air out of it.

Chris Kaythis year, They've Definitely Be Much More Proactive in Attempting to Warn People About the Dangers in PARTICularly THE DERIVATIETIET. At the sace time, though, they're treading a tight line becape actualsBit from Tax Revenue Here. So they're really trying to find a Balance BetWeen regulating the meaning withstifling it entirely. EEKS is actually they have come out with a feles and putial regulations totake the air out of it. So in the annual budget, the GoverNort Raised Taxes a Bit On Futures and Option Trading. So looking to raise the minimum contract size on derivatives trading, raise margins beFore Expiry,Basically Making it more extensive and countly in general.

Saffeya Ahmedand Those FinFLUEENCERS that are enCouraging the Risky Options Trades, they are n’t immune from the game are scrutiny.

Chris Kayso Sebi, The Capital Markets Regulator, has come down on a fem of them, a handful of them, and they've ben fairly watch on them. To regulating becape they operate in areas who are hard to put. So whatsApp groups, telegram groups, for instance. Sundar, who I know to speak to have sanctioned last year by sex, Telegram App withthout Being Registered with The Regulator. You know, he's not support toBe Technically Giving Out Financial Investment Advice, and He HAD to Pay a Fine of Over $ 700,000 for that.

Saffeya Ahmedchris, has sunar said anything about that $ 700,000 fine?

Chris Kayso Sundar and His Wife, Who Jointly Own Their Consultation, Agreed to A One-Year Trading BITHOUT Admitting or Denying They Had ANY LAWSOR But when I spoke to him, he did say that perhaps he had made a magnetake, But He Thought the Punishment that was found out to him by the markets regulator was out of proportion.

Saffeya Ahmedis He Still Making YouTube VideoS?

Chris Kayyeah, He ’s Still Active on YouTube. He Still Gives Out MasterClass Courses at, I think, Still in demand.

Saffeya Ahmedso Indian Equities May Be Surging. But this rush of dostic Investors is Illustration some of the major issues with the country ’s eConomy Right now Then, then

Chris kayso every though gdp is booming, the stock market is boxing, all the indicators are really on the up, there is really kind of a darker size, the Nextness and Growing Inequality Across India's Economy Right Now. I think we seeIt in this summer in derivatives trading. It's really Illustrated in some way of the design in a lot of corners in india. AR LAR LACK Decent Opportunities, Lack Dignific Jobs, Decent Employment Opportunities, and THEY Can See AllThis wealth around them. And they also want to get right and very quickly to. And that's perhaps part of the reason it was so led by the place. ting the way forward. They are showing they that they can too elevate they.Can too get this flashy life if they just have faith in their own tracking abilities and just figure a bit more moy in theRe.

Saffeya ahmedBut for now, chris says it ’ll just be a waiting game.

Chris Kayso Let's See What Happens with A Number of These Taxes and RULES that May Be Coming In the FROM Both the Government and The Capital Markets Or. Will we see this retail derivatives trading bubble burst, or will it know of carry on as it is? And Will be some more losses or some particular tragedy that prompts a wider wake-up call?

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Saffeya Ahmedtoday's Episode Was Hosted by Me, Saffeya Ahmed. It was left Produced by Me and Michela Tindra. to jonathan eley as well. sound design and mixing was done by sam giovinco.Producer and Cheryl Brumley Is the Global Head of Audio. THANKS for Listening.

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