Easy-to-use technology coupled with low charges are attracting small investors to the stock markets
The ease with which one can now trade directly in stocks and, the low costs associated with it, have encouraged hordes of youngsters to punt on the markets. Brokerages have not just put in place state-of the art technology they are offering a range of value-add services—research and trading courses—which is drawing youngsters to their platforms in large numbers.
Greater internet penetration has allowed even those in smaller towns to try their luck. Indeed, technology plays such a big role today that it’s the new-age discount brokerages that seem to be walking away with larger market shares.
The fact that e-KYC is so easily done has helped brokers grow their customer base. In FY21, investors opened a record 14.2 million new demat accounts, a three-fold increase over the previous year. The NSE Market Pulse report highlights the growing appetite for trading amongst individuals; the share of individual investors’ in the cash segment grew to 45% in FY21 from 38.8% in FY20 and only 33% in FY16.
In terms of the average daily turnover in the cash segment, trading by individuals grew a whopping 97%, to Rs 27,810 crore in FY21 from Rs 14,123 crore the previous year. Indeed, internet trading is growing by leaps and bounds, and should grow further as more affordable devices flood the market.
On average, daily turnover through internet-based trading in the cash segment rose by 70%, to Rs 15,400 crore in FY21 from Rs 9,100 crore in FY20. One doesn’t know whether direct trading has hit mutual funds which have seen large outflows over the past year; inflows into SIPs also declined to `96,080 crore in FY21 from Rs 1,00,084 crore in FY20. It is possible youngsters want to savour the thrill of trading on their own.