After hitting a 10-year high of 68% in June, retail participation has risen to 72% of the total cash market turnover so far in July. These levels were last seen in 2005, the mid-point of the 2003-07 bull market. Institutional participation from foreign portfolio investors, domestic mutual funds and insurance companies has contributed to just 28% of the total turnover so far this month.
“All three types of retail investors — day traders, measured investors, fence-sitters — have been aggressively participating in the stock markets since March, an activity which was seen during the bull run in 2003-2007,” said Vijay Chandok, MD, ICICI Securities. “While day traders are vigorously participating due to high volatility, measured investors have jumped into action to rebalance their portfolios. Fear of an uncertain future is driving fence-sitters to the equity market for savings,” he added.
So far in July, the average daily turnover of retail investors in the cash market is ₹39,500 crore compared with ₹7,500 crore for FPIs and ₹7,800 crore for domestic institutional investors. Equity inflows into mutual funds plunged 95% in June and SIPs dipped a bit but investors say that the shift did not happen so much from mutual funds as from banks and corporate FDs. All banks have not benefited from deposit growth, which is about 2.2% since April to June 19 compared with a 0.6% fall last year. The fortnightly year-on-year change till June 19 was 11% compared with 10% a year ago. The stronger private sector banks have benefited from the rise, but the weaker ones have lost out. Many bank deposit rates have also become unattractive, forcing investors to opt for market investments.
Sandip Ginodia , CEO
ALTIUS INVESTECH PVT LTD
We deal in over 60 unlisted companies with 15 years of experience .
Email : ginodiasandip1@gmail.com
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