The Nifty reclaimed 12,000 mark in trade on Monday after nearly eight months. The last time it traded around these levels was in February 2020, ahead of the Covid-19 induced nationwide lockdown. The rally since then, experts say, has been partly fueled by retail investors who took to investing in equities in the hope of better return over time as compared to the other asset classes.
Sample this. A million new dematerialised (demat) accounts were opened for a third straight month in August, taking the total retail accounts tally to 44.46 million. Since the start of the year, over 6 million demat accounts have been opened, a record for any calendar year. The registered investor base as on October 12, 2020, according to BSE, has hit over 55 crore – up over 37 per cent year-on-year (YoY).
While Mumbai maybe called as the financial capital of India and the city that hosts the BSE and the National Stock Exchange (NSE), the registered users who trade in equities has grown at a rapid pace in lesser known cities. According to BSE data, Manipur saw the steepest rise in client base in the past one year. At 33,901 registered clients as on October 12, 2020, the registered client base grew a massive 183 per cent YoY. Telangana (152 per cent), Arunachal Pradesh (90 per cent), Mizoram (86 per cent) and Lakshadweep (up 73 per cent) are the other cities that saw the sharpest rise in the registered client base over the past year, BSE data show.
“New equity investors seem to be driving up the overall market valuations. Traditionally states like Gujarat and Maharashtra used to have large equity investor base. However, the YoY jump in the investor base in the non-traditional states is quite surprising,” says G Chokkalingam, founder and chief investment officer at Equinomics Research.
Gujarat and Maharashtra, on the other hand, have seen YoY rise of around 25 per cent and 35 per cent respectively, data show.
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