Online trading goes up on NSE
Investors on the Indian bourses, particularly retail and HNIs, have been gradually mastering the skill of trading on the internet, thanks to the bullish market conditions and aggressive marketing of online trading facilities offered by stock broki...
By Vijay Gurav, TNN |
MUMBAI: Investors on the Indian bourses, particularly retail and HNIs, have been gradually mastering the skill of trading on the internet, thanks to the bullish market conditions and aggressive marketing of online trading facilities offered by stock broking firms.
An increasing number of investors are turning net-savvy and taking comfort in trading on their own by logging on to their computers at home or work place, rather than taking the conventional route of placing orders on telephone or giving instructions in person. This trend is also reflected in growing net-based turnover on the Indian bourses.
Turnover from net-based trading amounted to Rs 32,000 crore, or nearly 17%, of the NSE’s total turnover in the cash segment in November 2006, much higher than Rs 14,400 crore, or 13%, in November 2005, and Rs 7,500 crore, or 9%, in November 2004. The turnover, in fact, touched its peak of Rs 3,088 crore on November 24, 2006.
Mumbai-based broking house Motilal Oswal Securities recently tied up with the State Bank of India for offering online trading facility, with the help of which, the former plans to reach out to a large number of the latter’s existing customers.
“There are a number of advantages of trading on the internet, which has prompted many HNIs opt for online trading. Even educated housewives are increasingly participating in net-based trading,” said Motilal Oswal Securities director (retail business) Hitungshu Debnath.
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Highlighting advantages of net-based trading, Mr Debnath said comfort level is high among investors who can have immediate access to necessary published information, which is useful in making investment decisions. In offline trading, there is generally a time gap between placing an order and getting it executed, which is not so when a transaction is routed directly through the internet, he said. Motilal Oswal offers the service to about 50,000-60,000 customers and records a turnover of Rs 125-150 crore per day.
Sharekhan, one of the retail brokerages in the industry, has seen the share of its online business improve substantially from 30% to 45% of its total turnover in the past 15 months. It is among the top internet facility providers in the country, with two lakh online accounts.
“A lot of advertising and branding efforts are going into promoting net trading in the country. Many initiatives like educating customers through seminars and workshops are also helping in spreading awareness among prospective investors,” said Sharekhan director Jaideep Arora.
The firm has tied up with HDFC Bank, Yes Bank, UTI Bank and Citibank for the move so that the bank customers can use its facility, said Mr Arora. India Infoline, which owns the portal 5paisa.com, saw a 25-30% rise in online accounts in November.
“Stock market awareness has increased amid generally bullish market conditions. Online players are putting in a lot of marketing efforts to reach out to prospective investors like housewives and retired people who, of late, have started showing good interest in the market,” said India Infoline VP (equity) Ketan Malkan.
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