Indian millennials, riding on the digitisation of the equity market herded by traditional and new discount brokerages offering user-friendly features and products in play, have rushed in droves to invest in stocks. Brokerages said 70% of the 30 lakh who opened demat accounts in the last five months are millennials.
Broker level innovations now provide products such as customised semi-automated trading strategies without much of coding, robot-based advisory and stock picks, customised basket portfolios managed by professionals at much lower cost than portfolio management services (PMS), spread based option strategies to trade on any platform and automated rule-based trading engine for the high frequency players at much lower cost.
Impressed by these innovations, the tech-savvy generation that pioneered social media, sees the sudden end to one of one of the longest bull markets as a perfect opportunity to park their disposable income in stock markets at a time when interest rates are really low and asset classes like real estate and fixed deposit having nothing much to offer, market participants said.
Unlike the experience in the past, this time retail investors have not been driven away by the crisis-driven market volatility. Instead, Indian broking industry saw an astronomical rise with more than 30 lakh new customers opening demat accounts in Central Depository Services since 1 February, when retail participation peaked to a 15-year high in July.
“We have launched simple yet effective products like Smallcase, SmartEdge, SmartOptima and introduced model profiles like ‘Value and Growth in Stocks’ based on the risk profiles of the customers, especially for the first-time investors, and the Gen Y, popularly known as millennials” said B Gopkumar, MD & CEO, Axis Securities.
India’s largest brokerage in terms of number of clients, Zerodha, has introduced a product called ‘Streak,’ a platform that allows people to create and deploy semi-automated trading strategies without any coding.
Angel Broking has a flagship offering for retail investors called ARQ that recommends stocks based on a set of rules – free from human intervention or human bias. Its FNO dashboard is a customised algorithm that filters stocks on change in price and change in open interest.
With a sharp focus on young retail customers and their requirements, most brokers have built an ecosystem of tech-enabled advisory products across all value segments.
“We have increased our offering of algo trading, advanced charting, historical and real time market data along with various order types like bracket order, cover order, a product like FP360, which is specially crafted for long term investors looking for overall wealth management” said R Venkataraman, MD & CEO, IIFL Securities.
Motilal Oswal introduced robot underlined products for curated portfolio review in real time and one click execution. It also has Intelligent Advisory Portfolios – a ready to invest range of customised equity portfolios managed by professionals at fractional cost of a PMS. Motilal Oswal’s trade guide signal – an automated rule based trading engine for the high frequency players which constantly gives our trading signals across equities, currency and commodity segments.
5Paisa Capital offers three products for new investors, namely small case, which is a basket portfolio, swing trader for short term calls and smart investor for long term calls.
Sharekhan provides a basket of investment products, both advisory and portfolio management, where quantitative models are used, whereas ICICI Securities offers ‘Margin 365,’ where clients can buy with low amounts and pay the remaining within 365 days.
Some young engineers have developed an interesting platform called Sensibull, which has a host of tools for F&O traders such as customised strategies builder, screener and a virtual trading platform. Another group of IIT graduates have created a platform called smallcase which provides a basket of stocks weighted intelligently to reflect an idea. Clients of several leading brokerages can trade on these platforms.
Because of these variety of products, the retail participation in equities has risen to 72% of total cash market turnover in July, the levels which were seen last in 2005.