Online trading at a new high

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• Shopping Festival

New Delhi, Nov 22: Buoyed by a host of mega public offers, the share of internet-based trading in total turnover on the National Stock Exchange (NSE) surged to an all-time high in October. Interestingly, the turnover of the derivatives segment has surpassed that of the cash segment even on the internet, a trading platform dominated by retail investors.

The share of internet trading in total turnover on NSE touched a new high of 8.3% (up from 4.5% in January 2004) in the cash segment and 5.1% (2.9% in January ’04) in the derivatives segment.

The number of customers registered with the 70 broking firms providing internet trading facility touched 7.13 lakh on October 29. The figure was at 6.33 lakh as on July 30, 2004. This indicates that there has also been a significant increase in per customer trading volumes.

The monthly turnover in the derivatives segment has grown faster and the figure has crossed the monthly turnover in the cash segment in August 2004. This shows that retail interest is shifting to the derivatives segment.

According to ICICI Direct’s chief operating officer Anup Bagchi, “The large number of mega public offers during the year has attracted a large number of retail investors to open internet trading accounts. Retail investors get initiated into internet trading when they invest in these IPOs and later learn how to sell the shares purchased.”

Mr Bagchi adds that the number of clients of ICICI Direct has increased to about 5 lakh currently from 3.3 lakh at the start of the calender year.

The year has seen mega public offers from companies like Tata Consultancy Services, NTPC, ONGC, ICICI Bank and Gail.

Indiabull’s head of online trading division Gagan Banga attributes the growth in internet trading volumes to “bullish trends in the stock markets and improving systems of internet broking firms.”