MUMBAI, FEB 28: The Economic Survey is bullish about the capital market. The opening up of India's domestic insurance sector and other reformist measures taken by the government have boosted the prospects of the country's capital market, the 1999/2000 (April-March) Economic Survey said on Monday. ". Opening the insurance sector to private participation, should not only raise resource mobilisation but will also encourage foreign institutional investors (FIIs), who play a significant role in the Indian stock market," the Survey said. India's parliament in December 1999 approved the Insurance Regulatory and Development Authority Bill, which seeks to open up the domestic insurance business to foreign and Indian private firms. The cumulative net FII investment as of December 31, 1999,stood at $10.21 billion, the Survey said. The Survey said the passage of the Securities Laws (Amendment) bill facilitating introduction of derivatives trading based on stock index futures has further brightened the outlook for the stock market. The Survey is an annual report card of the economy ahead ofthe federal budget for the coming fiscal year. The 2000/2001 budget will be presented in parliament on Tuesday. It said market capitalisation as per Bombay Stock Exchange estimates increased about 65 per cent to Rs 803,353 crore ($184.25 billion) in December, 1999, from Rs 4,88,229 crore in April, 1999. PRIMARY MARKET, MUTUAL FUNDS IN FAVOUR: In April-December 1999, a sum of Rs 5,723 core was raised through public and rights issues from the primary market, which was 46 per cent more than the previous year. Equity constituted 61 percent of the total resource mobilisation from the primary market in the April-December, 1999, compared with 18 per cent in the same period of 1998 Debt issues accounted for the remaining 38.8 percent of total resource mobilisation in April-December, 1999, down from 82.1 per cent in the same period the previous financial year. "The higher proportion of resource mobilisation through equity issues in the current financial year reflects greater investor confidence in the capital market," the Survey said. Most of the resource mobilisation from the primary marketin 1999/2000 was by the private sector. In April-December, 1999, the private sector made 57 issues raising Rs 5,509 crore compared with 38 issues for Rs 3,825 crore in the year-ago period. Banks and financial institutions and information technology sectors, followed by cement and construction, were the most active in the primary market. During April-December 1999, net resource mobilisation by mutual funds was Rs 12,194 crore as against a net outflow of Rs 950 crore in 1998 Mutual funds raised Rs 35,915 crore in gross terms during April-December, 1999 compared with Rs 16,288 crore in the corresponding period of 1998.
