Indian brokerage firm Zerodha is implementing a bold initiative aimed at fostering greater participation in government bonds (G-Secs), treasury bills (T-Bills), and state development loans (SDLs). Effective March 1, 2024, Zerodha will waive the 0.06% brokerage fee on these investment options.
Zerodha announced the initiative on X (formerly Twitter), stating, “To encourage greater participation in Government Bonds (G-Secs), Treasury Bills (T-Bills), and State Development Loans (SDLs), we are waiving the 0.06% brokerage fee beginning March 1, 2024.”
Analysts recommend that investors consider investing in debt securities to capitalise on high interest rates. When compared to developed economies, investment in debt securities in India remains relatively low compared to investments in stocks.
Institutional investors are some of the biggest buyers of Indian debt securities. Despite being the net seller in Indian stocks, FPIs have been pouring money into the debt market, as they infused ₹18,500 crore in the current month, following an investment of over ₹19,836 crore in January, making it the highest monthly inflow in more than six years.
This surge in debt investments has come on the back of two announcements, among other factors: (a) Confirmed inclusion of the Indian Government’s Fully Accessible Route^ (FAR) G-Sec bonds in the JP Morgan Government Bond Index (GBI)-EM Global Diversified (GD) Index and GBI-EM Global Index, starting June 28, 2024, and potential inclusion of the FAR G-Sec bonds in the Bloomberg Emerging Market (EM) Local Currency Index starting September 2024, according to the HDFC AMC.
Both of these inclusions bode well for FPI inflow in the Indian fixed-income markets and align well with the Indian government’s vision to establish the nation as a global economic powerhouse, said HDFC AMC.
As India continues to open its financial markets to the world, it is positioning itself as an attractive destination for global investors. Such efforts should have positive long-term effects on India’s economic growth and increase its influence on the global financial stage, as highlighted by the HDFC AMC.
Source – Mint
