The sharp downturn in the global equity market, which prompted global fund managers and hedge fund industry to keep away from equity trading for most part of the financial year 2008-09, has not deterred investors from Ahmedabad from trying their luck in the domestic equity market. This is corroborated by the fact that while the total annual turnover of the country?s two premier stock exchanges?Bombay Stock and Exchange and National Stock Exchange?dropped drastically and the share of major cities across India towards the exchange?s turnover showed a declining trend, Ahmedabad actually recorded an increase in its turnover.
According to the data provided by market regulator Securities and Exchange Board of India (Sebi), Ahmedabad?s share to the total turnover in the BSE went up to nearly 5.5% compared with 3% during 2007-08 while that of NSE went up to nearly 7% from 3.38% recorded during the previous year.
Market experts attribute this to the prosperity of the state compared to other parts of the country and the high risk-taking ability of Gujaratis in general.
?The GDP growth of Gujarat is higher than the average national growth and hence people have more money at their disposal to trade in equities. Also, the business mindset of the Gujaratis and their risk-taking ability is probably what is driving them to the equity,? says Deven Choksy, MD, KR Choksy Securities.
While the BSE, India?s oldest stock exchange, witnessed a fall of 33.76% in its annual turnover in the cash segment, from 15,78,857 crore in 2007-08 to Rs 10,45,710.57 crore in 2008-09, following the meltdown in the global financial market, its archrival National Stock Exchange (NSE) witnessed a 26.72% fall in its annual turnover during the same period. The annual turnover in cash segment for the NSE during 2008-09 stood at 26, 02165.52 crore compared to 35, 51038 crore during 2007-08, loss of Rs 9,48,872.48 crore.
During this period, BSE?s 30-share Sensex dipped 37.87%, or 5918.12 points, while the broader S&P CNX Nifty of the NSE witnessed a decline of 36.26%, or 1718.60 points. This was the time when foreign institutional investors (FII) sold equity worth Rs 48,248.5 crore in the Indian market.
Interestingly, the biggest dent in turnover for both BSE and NSE came from Mumbai, considered India?s financial capital. Mumbai?s share to the total turnover of BSE during the last financial year declined to around 71% from its earlier share of 76% registered during its previous year. Similarly for the NSE, Mumbai?s share to its total annual turnover declined to around 52.50% from over 57% during the same period.
However, Delhi, another emerging equity trading city, showed a different trading pattern. While Delhi?s share in the BSE?s total turnover almost remained at just over 3%, its share in NSE increased to over 15.50% from 14.50% recorded earlier.