[sbinews] Numbers give the complete picture

  • From: sbistcbangalore@xxxxxxxx
  • To: sbinews@xxxxxxxxxxxxx
  • Date: Mon, 22 Dec 2003 20:37:18 +0500

Numbers give the complete picture

For a reality check on the euphoria over the retail retail segment, take a look 
at some actual numbers from the country’s depositories. At NSDL, new accounts 
opened between May and November ’03 were 9,83,950 — a 121% rise over the figure 
of 4,45,220 over the same period in ’02. “New demat accounts that are being 
opened now can only be from the retail retail level, since the bigger players 
have all been dematted way back in 1999,” said CB Bhave, MD, NSDL. More 
interestingly, the spate of new accounts opened at the NSDL has increased by 
205.98% from 52,126 accounts in May ’03 to 1,59,488 accounts in November ’03. 
Demat requests are an indication of the extent of physical stocks that are 
being transferred to the electronic mode. Such requests in May-November ’03 at 
36.09 lakh were 58.6% higher than the 22.75 lakh requests received in 
May-November ’02. 

There’s more. Debit instructions on the NSDL in the May-November ’03 period, at 
457.44 lakh is a 83.83% rise over 248.83 lakh debit instructions at the NSDL in 
the May-November ’02 period. Debit instructions relate directly to the number 
of trades. An over 83% rise in the number of transactions can mean only one 
thing for certain: small investors are back. “In transaction terms, numbers are 
always due to retail participation, while value is due to institutional 
players,” said Mr Bhave. 

The volume of trades has been steadily rising at the NSDL. From 41.38 lakh in 
May ’03, debit instructions have gone up to 71.12 lakh in November — a rise of 
71.87%. That is the measure of interest shown by small retail investors in the 
secondary market system since the start of the bull run this year. 

Evidence at the country’s other depository, the CDSL, is equally convincing. 
The depository charges 0.01% of the transaction value as fees subject to a 
minimum of Rs 5 and a maximum of Rs 12 per transaction. Top officials at CDSL 
acknowledge that “74% of the trades in October and November, for example, are 
below the Rs 5 limit, which in other words means that in case of 74% of the 
transactions, the value of the transactions are below Rs 50,000.” 

“These are basically small trades, being done by the hundreds and thousands of 
absolute retail level investors,” say top CDSL sources. They also said that 
“post-March, the average daily number of client accounts that are being added 
has gone up a mind-boggling 500%, while the average daily number of demat 
requests has risen 700%”. 

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