Foreign investment options for Indians increased Monday. ICICI Bank’s online trading arm launched its overseas trading service, which will allow investments across 13 U.S. stock exchanges, including Nasdaq and the New York Stock Exchange.
ICICIdirect.com has teamed up with Dallas, Texas-based Penson Financial Services for the initiative. Investors will be able to trade in U.S. stocks, including ADRs, exchange traded funds, stock options and index options. Mumbai-based ICICI (nyse: IBN - news - people ) is exploring similar tie-ups in other markets, such as in Europe.
“We believe that Indian investors are looking at diversifying their portfolio and overseas trading service enables them to do so,” said Subrata Mukherji, chief executive of ICICI Securities Limited.
“The U.S. equity markets are most liquid and deepest in the world and allow investors to spread country and sectoral risk more effectively,” he said, adding that customers could invest in sectors like biotechnology, semiconductors and Internet companies that are underrepresented here.
ICICIdirect.com has about 1.3 million customers. Those wanting to invest overseas will have to pay a one-time fee of 999 rupees ($25) to register and will remit money to the United States through one of the bank’s branches.
Penson is in an exclusive partnership with ICICI in India and does not plan linkups with other brokerages here, said Warren Bunting, vice president, Global Penson Services.
Earlier this year, Reliance Money launched an overseas trading facility aimed at the derivatives market in partnership with the U.K.-based online trading services provider CMC Markets.
ICICI Bank’s initiative comes in the aftermath of the Reserve Bank of India’s doubling of the annual ceiling for remittances for individual investors to $200,000 (See: “ Reserve Bank of India Liberalizes Overseas Investing”). The central bank opened up investments to ease pressure on the rupee, which has appreciated more than 11% against the dollar since January because of significant foreign inflows and global dollar weakness.
It’s uncertain how well overseas investment services will fare, given the significant gains India’s own Bombay Stock Exchange and National Stock Exchange have seen over the past year, making the country one of the most attractive investment destinations worldwide. Market analysts say Indian investors’ lack of knowledge of overseas markets will also serve as a speed bump to placing their money in overseas equities and funds.
