It was yet another dismal financial year for retail participation as volatile equities and bearish sentiments spooked investors.

Retail participation, as gauged by the delivery volumes of retail participants, has declined more than 50% for the financial year 2012 over the previous fiscal. What?s more, it is the lowest since FY09, the year global markets worldwide tanked in the aftermath of the Lehman crisis.

Delivery volumes of retail participants dipped to R1,472 crore in FY12 from R3,267 crore in FY11. Volumes had previously dipped to an abysmal low of R1,066 crore in FY09, the year the world found itself in the throes of the global financial recession. The monthly volume of R962 crore for March was the lowest in FY12 as retail investors chose to invest in tax-saving instruments instead of equities. Average daily cash volumes on both the exchanges for the financial year 2012 stood at R13,918, the lowest in the last four fiscals. However, volumes revived somewhat in February (R19,887 crore) and March (R15,236 crore) this fiscal on the back of robust inflows from overseas investors. Even mutual fund houses have been witnessing redemption pressure. Equity funds saw outflows of R455 crore in April, the fourth consecutive month of outflows, latest data from mutual fund industry body Amfi shows. The Sensex has retreated 10.5% for FY12. ?The markets have stayed rangebound in the last three years or so. Also, retail investors have invested in high beta stocks and sectors such as infrastructure, realty, capital goods and PSU banks, which have not given good returns during this period. That has dented their confidence,? said AK Prabhakar, senior VP – equity research, Anand Rathi. He added that retail investors are unlikely to return unless they see a steep correction of about 10-15% from the current levels and valuations become attractive. India is not the only country where cash volumes are declining. According to a table compiled by the Credit Suisse Trading Strategy team that appeared on the Financial Times website, average daily trading volumes in the US are at their lowest level since December 2007 at 6.49 billion shares a day.