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Retail participation in India Stock Market is at its lowest

Published on Saturday, November 23, 2013 by Team | Modified on Thursday, July 9, 2015


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The retail participation in Indian equity market is at its lowest in many years.

A recent analysis by NSE officials concluded that at this movement; out of approximate 50 lakh demat account holders; only 1.2 lakh investors (2.4%) are actively trading daily and around 3 lakh are trading once in a quarter. These numbers are worst then anyone can even guess.

On Oct 17th 2013; HSBC, a premier financial institution decided to take an exit from retail brokerage business in India. HSBC's decision to exit this business might also be because of the challenging conditions faced by brokerages in the country. The sector has been characterised by tough competition and low entry barriers that have culminated in yields taking a hit over the past few years.

The retail participation is poor for the last few years due to high volatility in the market. Market trends over the past few years have seen turnover in the cash segment (which is more profitable) showing a decline and options, where yields are low, accounting for a major share.

The total retail volumes declining over 20% compared to 2012. As per data from BSE and NSE stock exchanges, the retail volume in the cash market fell to Rs 6.03 lakh crore in the current calendar year on an annualised basis, compared to Rs 7.56 lakh crore in calendar year 2012. The average daily turnover last year was around Rs 3,000 crore on the BSE on the retail side, which has fallen to Rs 2,400 crore in the current calendar year.

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