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"Internet trading volumes may shoot up by 1000 times in one year"
Nitin Mathur
Notwithstanding the teething problems, Internet trading is likely to zoom by 1000 times from the existing levels, said Satish Gogia, managing director of Delhi-based brokerage firm, Gogia Capital, which also runs `gogiacaps.com', an online trading site. In an interview with the Financial Express, he said stock market may test the 4300-level by December and go up to 5000 points in January next year.Q. Internet has revolutionised the stock broking business, since price quotations and trading facilities are available online. What is the potential of this business in India?
Internet trading holds huge potential in India. expect that it will witness a 1000 times growth in one year. We have been able to achieve an annual turnover of Rs 10 crore on our website, gogiacaps.com, which currently caters only to a limited audience. Once the infrastructural problems are sorted out, it will make buying and selling in securities convenient and cost-effective.Q. How do you percieve the competition from banks like ICICI Bank, that are coming up with similar websites?
The banks may cater to small investors who trade seldom, but sites backed by brokers will catch the big investors due to their ability to take quick decisions and a calculated risks. This cannnot be replicated by banks since their interface with customers is through their employees, who do not have a personal interest attached to the transaction, and thus would not take risks. Brokers also have a edge due to their wide experience in the stock markets. However, for the financial part of the transaction, we have tied up with HDFC Bank, Citibank, Global Trust Bank and IndusInd Bank. Q. It was predicted earlier that the sensex may touch 6000-points by October-November, which looks far even by now. Where do you percieve the markets in December-January?
The stock markets are expected to come down further during the next few trading sessions due to uncertainities over the political situation in the US and the build-up of long positions on the Bombay stock exchange (BSE). expect the sensex to start looking up since the second half of the coming Thrusday. By December the markets should rally to 4300 or 4400 points till December. However, it should touch the 5000-mark in January 2001. It will take some more time before it can breach the 6000-mark.Q. Which sectors are expected to lead the rally? I am particularly bullish on Information Technology sector, since India has been able to emerge as a brand in this sector and enjoys a strong presence in the global markets.
Specifically, genuine companies like Infosys Technologies, Satyam Computers, Global Telesystems, Hughes Software, and Mastek should see marked appreciation. NIIT should also spurt, though, the company's education division is one limitation for the company. Q. The NSE is working towards introduction of ALBM system. Do you think it will be able to suceed?
The ALBM system is better as it combines the elements of rolling settlement and badla. Initially, it may lead to a fall in liquidity and lower interest since the markets have seen about 90 per cent drop in turnover of scrips that were put into the rolling settlement. But in the long run, the scheme should suceed. Badla is something which cannot be removed from the Indian stock markets without adversely affecting the markets. Q. What is the reason behind the failure of India's first derivative product - the futures market?
Futures trading has not been able to pick up because of the restrictions on the FII and NRI investments in this security and lack of proper awareness amongst the domestic investors about the benefits of this sector. Sebi should allow FII and NRI money to enter this market. If the Indian domestic investors are not supported by their foreign counterparts, this markets will never develop. Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.
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