Af­ter Cor­rec­tion, Mar­kets Wit­ness an In­vestor Rush

SHIFT TO­WARDS EQ­UITY Value-pick­ing in stocks and ac­tiv­ity in the pri­mary mar­ket re­sult in an in­crease in new de­mat ac­counts

The Economic Times - - Sports - Sanam.Mir­chan­dani@ times­

Mum­bai: Eq­ui­ties may have fallen sharply from life­time highs in March last year, but this hasn’t de­terred in­vestors from get­ting into the stock mar­ket if the steady in­crease in new de­mat ac­counts is any in­di­ca­tion.

This in­ter­est is likely to in­crease as new in­vestors take ad­van­tage of rea­son­able val­u­a­tions to in­vest from a long-term per­spec­tive, ex­perts said.

Na­tional Se­cu­ri­ties De­pos­i­tory Ltd (NSDL) data showed that 1.8 lakh de­mat ac­counts were added in the first two months of the cur­rent year, up 1.2% from the num­ber at the end of last year. March proved to be even bet­ter in that re­spect as the mar­ket re­bound saw an­other 1.8 lakh de­mat ac­counts opened in just one month, bring­ing the rise in the quar­ter to 2.5% from the pre­ced­ing three-month pe­riod. That’s faster than the two pre­ced­ing quar­ters. The Septem­ber and De­cem­ber quar­ters saw the open­ing of 2.1 lakh and 1.8 lakh de­mat ac­counts, re­spec­tively, up 1.5% and1.3% on quar­ter.

Ac­cord­ing to mar­ket ex­perts, the rise can be at­trib­uted to value pick­ing in stocks by in­vestors and sug­gests a grow­ing shift to­ward eq­uity as an as­set class as other av­enues such as gold and real estate have not done too well of late. “The mar­ket has fallen to the lev­els that are pro­vid­ing a good en­try point for a lot of peo­ple who could not get into the mar­ket,” said Kam­lesh Rao, CEO, Ko­tak Se­cu­ri­ties. “It is bet­ter to en­ter when Nifty is at 7,500 lev­els than at 9,000 lev­els,” he said, adding how­ever that the de­mat ac­count base was still low.

Ac­tiv­ity in the pri­mary mar­ket has also aided the steady in­crease in de­mat ac­counts with ini­tial pub­lic of­fers spark­ing in­ter­est, said Arun Thukral, manag­ing di­rec­tor, Axis Se­cu­ri­ties. These in­clude IPOs from com­pa­nies such as IndiGo Air­lines par­ent In­ter­globe Avi­a­tion, Dr Lal Path­lab, Narayana Hru­day­alaya, Team­Lease Ser­vices, etc.

While ac­count ac­tiv­ity and ticket size are vari­able, the pat­tern of in­vest­ing shows that most new en­trants are tech savvy, opt­ing for on­line trad­ing. “For Ko­tak, about 60% par­tic­i­pa­tion from de­mat ac­count hold­ers is through on­line trad­ing,” Rao said.

The ticket size of new ac­counts ranges from those putting in as lit­tle as Rs 25,000 to high net worth in­di­vid­u­als who in­vest crores of ru­pees, said Pras­anth Prab­hakaran, pres­i­dent, re­tail broking, IIFL.

NSDL data shows that 1.8 lakh de­mat ac­counts were added in the first two months of the cur­rent year

String of IPOs also help­ing in­crease de­mat ac­counts

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