Highest market PE ratio is due to ‘informed decisions’ by investors

“If ?22 lakh crore of investments has come into mutual funds through institutional investors, then one can say all that is the result of good amount of financial information made available to them,” said G Mahalingam, Whole Time Member, SEBI.

He was addressing a session at the ninth edition of The India Finance Forum 2018 meet titled, ‘Driving performance, business value in digital world’, organised by the Confederation of Indian Industry, here on Friday.

Lauding the role of accountants in helping make informed investment decisions, Mahalingam in his speech, ‘Regulatory changes and its implementation — GST and Ind-AS’ said, the Indian stock market recording one of the highest PE ratios in the world at 24.5 per cent can be attributed to the informed decisions of investors based on the financial information provided by companies. “But do the institutional investors really absorb the accounting information and exercise their voting rights in crucial investment decisions vis-a-vis retail investors still remains a big question,” Mahalingam added.

Speaking at the event, former Chairman, Central Board of Excise and Customs (CBEC), Sumit Dutt Majumder, said, “For the first time, India has shown the power of co-operative federalism to the world by adapting to GST.”

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