Lockdown sees more retail investors join the queue

Mumbai: Local savers are buying into stocks big time. Here’s the proof: The number of new demat accounts surged despite the lockdown, NSE internet trading volumes jumped 53 per cent in April, and the indices climbed a third since the March 23 low.Institutional investors were net sellers during this period, however.About 1.2 million new investors opened demat accounts with the Central Depository Services (CDSL) alone in March and April. About 6.18 lakh new demat accounts were opened in CDSL in March and another 6 lakh in April. Although the National Securities Depository (NSDL) did not disclose data since the end of February, market participants expect a few lakhs of new accounts in these two months.This is a record jump in new accounts compared with 4.2 million new demat accounts opened in 11 months between April 2019 and February 2020.A sharp fall in the prices of several quality stocks since mid-February may have tempted retail investors to make direct purchases rather than go through mutual funds, said brokers.“We have added a record 3 lakh new customers in the last two months and 65 per cent of them are first-time investors” said Nithin Kamath, CEO, Zerodha. “The prime reasons for such an interest in the equity market are attractive valuations, free time due to the lockdown and ease of transactions because of the work-from-home routine.”The Sensex fell 37 per cent between February 19 and March 23 and recovered 30 per cent since then. During this period, institutional investors sold shares over ₹6,000 crore. Foreign investors sold stocks worth ₹16,000 crore, and domestic institutions bought ₹10,000 crore.NSE data show that the internet trading volumes jumped 53 per cent in April to an average daily volume of ₹12,602 crore, compared to a daily average turnover of ₹ 8,261 crore.“New clients came with good funds to buy only quality stocks,” said Vinay Agrawal, CEO, Angel Broking.

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