INDIAN RETAIL equity investors can now own global blue chip stocks thanks to ICICIDirect.Com, the online broking arm of ICICI Securities Limited, that launched an overseas trading tie-up with Penson Financial Services, the fourth largest clearing and broker-dealer firm in the US, on Monday.
ICICIDirect, with 1.3 million customers, also became the first online trading portal in India to offer buying and selling of equities listed on the US stock market, following the Reserve Bank of India’s (RBI) guideline allowing individuals to remit up to $200,000 annually in current and capital account transactions including equities.
Launching the overseas trading facility, ICICI Securities’ Managing Director & CEO Subrata Mukherji said: “The trading portal would provide access to the US market, the largest in the world, and an opportunity to invest in global blue chips all over the world.”
Retail investors registered with ICICI direct.com will just have to fill a one-time account opening form, and a one-time fee of Rs 999 to avail of this facility. Brokerage on transactions would be .75 per cent, or $9, whichever is higher.
Anil Kaul, Director & CEO – Retail, ICICI Securities, said: “Investors can buy or sell stocks/ ADR’s listed on the NYSE, Nasdaq and the American Stock Exchange. Only delivery-based buying and selling is allowed and no margin trading is permitted.”
ICICI Securities Chairman and ICICI Bank MD & CEO K.V. Kamath said: “RBI’s liberalised norms along with our new initiative opens new vistas for Indian investors.”
Penson Financial Services’ V-P-Global Services Warren Bunting said: “This tie-up is exclusive between Penson Financials and ICICI Bank and we don’t see ourselves joining hands with anybody else here in India." Penson handles around a million settlements daily and has over $6.8 billion in assets.
After the RBI issued its guideline, mutual funds have been launching a slew of schemes to tap the investment appetite of Indians wanting to invest abroad. Now, retail investors will get a chance to buy equity and equity derivatives products directly. “It is a good opportunity. It will slowly develop the market,” said Nipun Mehta, CEO, Unitis Tower Wealth Advisors.
A surging rupee and the booming stock markets have made investments in US less attractive for domestic investors this year. The benchmark BSE Sensex has gained 26 per cent vis-à-vis 12.8 per cent surge in the Dow and 15 per cent on the Nasdaq. The rupee has gained 12.2 per cent this year.