No spurt in investors
Mumbai: The sharp surge in the domestic equity markets has failed to attract a large number of individuals into equities in 2014 as the new client addition during the year has remained largely in line with the trend witnessed during the past few years. According to industry experts, the new client addition during the first half of this calendar year remained tepid and it picked up momentum only during the second half of this year after equity markets soared to their record highs on hopes that the new government would be able to pull out the domestic economy from one of its worst slowdowns.
“The new client acquisition during the first half of this year was just 3-4 per cent, one of the worst during the past several years. However, it picked up pace during the second half of this year. The new client addition almost doubled and we saw a growth of around 8-9 per cent during this period. If the current momentum in the equity markets continues, the number of new investors entering the market would further gain traction,” said Amit Majumdar, executive director and CSO at Angel Broking.
While the National Securities Depository Ltd (NSDL) has seen an addition of 4.92 lakh fresh demat accounts, the number of new accounts added with the Central Depository Services Ltd (CDSL) stood at 5.79 lakh. During 2012 and 2013, NSDL had added about 6.88 lakh and 5.20 lakh investor accounts respectively.
The lack of large IPO from quality companies has been cited as another reason for the lower retail foray into equity markets. “New investors enter the market in large numbers when the primary market is active with a large number of IPO’s. Unfortunately, we didn’t see much activity in the primary market during 2014,” said Sudip Bandyopadhyay, MD and CEO of Destimoney Securities. According to him, the retail entry has been little slow during this year and it is largely institutional investors and high net-worth individuals who are driving the markets.