Indian Households: According to estimates done by Morgan Stanley, “In the last 10 years, by making investment of 3% of its balance sheet in equities, Indian households have made around $1 trillion from the stock market.”
The global investment banking firm estimates that these households have contributed $8 trillion in wealth in the last 10 years and around 11% of it is came from equities.
Morgan Stanley’s Ridham Desai said, “We believe Indian households are still under-invested in equities. Indeed, at cost, only 3% of the household balance sheet is in equities excluding equity holdings of founders. We think this number could rise to double digits in the coming years”.
He added, saying, “Households remain less exposed to equities relative to other asset classes, and we see the domestic bid on stocks being sustained for a long time, as it was in the US from 1980 – when 401(k) plans were allowed to invest in stocks – to 2000”.
Growth In 10 Years In Indian Households
As reported by Economic Times, in the last 10 years, the market capitalization of Indian companies has made an impressive growth from 1.2 trillion dollar in March 2014 to 5.4 trillion dollar. Making it the fifth largest market globally.
Desai mentioned that, “The low starting point of domestic equity ownership – only 3% of household balance sheets. A structural shift appears to be underway in household balance sheets and therefore the share of equities may rise over the coming years”.
Morgan Stanley said that, “Household wealth has gained significantly from an outsized position in gold. Gold and equities have been the best-performing asset classes in India over time. While property is still the largest portion of the balance sheet and has fared relatively poorly, we believe most property exposure is likely first homes and, hence, not really a discretionary asset”.
Gold has contributed significantly to wealth creation for Indian household, by doing contribution of 22%.
