Tag: retail investor

In what was supposed to be the country’s breakout year the shocking two-day plunge by India’s Paytm after its initial public offering casts a shadow over the prospects for technology firms preparing to go public. Retail investors, who bought an unprecedented amount of shares in Paytm’s parent One 97 Communications Ltd., have seen more than 35% of their value wiped out in just two trading sessions. Further losses may be in store if the stock slumps from its Monday closing price of Rs 1,359.6 to the Rs 1,200 predicted by Macquarie Group Ltd. “The event in a way will nudge people to be cautious and not take the market for granted by blindly placing bets,” said an investment expert. “It is important that a company’s story and prospects are well understood by investors”, he said. Read more

Presently the relentless rally in small- and mid-cap stocks continues as large-caps show signs of fatigue. In July, the Nifty Smallcap 100 rose 8.1 percent, extending its year-to-date (YTD) gains to 48.5 percent, while the Nifty Midcap 100 added 3.1 percent, taking its YTD rise to 33.5 percent. On the other hand, the Nifty50 remained unchanged for the month, with YTD gains of 12.7 percent. Not only are the small- and mid-cap indices off to their best start to a calendar year since 2014 but their outperformance over large-caps is at record levels. The Nifty Midcap 100 index has gained for 14 straight months, while the Smallcap 100 index has given positive returns for 13 of the past 14 months. Read more

Many retail investors have now begun to participate in algo trading, which was available only to institutional investors till a few years ago. The quant (the person who creates the algorithm or algo) studies historical data to come up with certain trading rules that he believes will make money. He then builds the algo, software that has those rules coded in, which then scans the market. Whe­n­e­ver the conditions that ha­ve been coded are met, it ge­nerates buy and sell signals. To access this, traders have to enroll on platforms that offer algo trading strategies, like Rain Technologies, Tradetron, Squareoff, AlgoBulls. The trader also needs to enroll with a broking firm that offers API (application programming interface) integration. An API gathers the signals generated by the trading platform and executes them in the trader’s broking account. Zerodha, Fyers, Upstox, Samco, 5paisa, among others offer API integration. Read more

The V-shaped economic recovery in 2020 won’t be repeated after this year’s Covid-19 carnage according to some analysts. Government statistics released 0n 31st May showed 1.6% growth in GDP from a year earlier in the March quarter, before a deadly second wave of infections. But this expansion, an improvement over the 0.5% rate in the previous three months, is a statistical artifact. A better metric is seasonally adjusted quarter-on-quarter growth, which Capital Economics calculates at 0.7%, a sharp slowdown from 9.5% in the December quarter. During the current surge in cases, there have been only local restrictions on physical activity. That’s making some analysts optimistic about the resumption of growth that will inevitably occur when the coronavirus fully recedes. Yet there are several crucial differences from last year that could make it harder for India to bounce back. Read more

SEBI is considering the concept of institutional investor-only initial public offerings (IPOs) to shield small investors from presumably risky issues by new-age technology and e-commerce firms. Regulatory and investment banking sources said the regulator is deliberating whether more steps are required to safeguard investors before it allows loss-making companies, such as food delivery company Zomato, to tap the public market. Banning direct retail participation and mandatory “safety net” are some of the concepts being discussed, according to the sources. Domestic IPOs, typically, have two broad equal quotas for institutional and non-institutional investors. The non-institutional portion is further split 70:30 between retail (those investing up to Rs 2 lakh) and high net-worth individuals (those investing more than Rs 2 lakh). Read more

Two hundred and sixty-three stocks or more than half of stocks that comprise the BSE 500 are trading at least 10 percent below their all-time high levels, despite the index hitting a record high 20,515 points on the BSE in intra-day trade today(19th May 2021), surpassing its previous high of 20,390 touched on March 12, 2021. The index, which accounts for 93 percent market capitalisation of BSE listed companies, has gained 8 percent from its recent low of 18,983 touched on April 19. In comparison, the benchmark S&P BSE Sensex gained 6 percent during the same period but is still nearly 4.5 percent away from its all-time high level of 52,517 hits on February 16. Analysts ascribe the underperformance of bulk of BSE 500 stocks to a classic case of polarisation, where investors are lapping up stocks of sectors that are likely to do well going ahead. Read more

Foreign investor flows have taken a backseat over the past couple of years with retail investors now being in the driver’s seat, suggests a recent report from foreign brokerage firm UBS. “Overall, when we combine household equity savings through mutual funds and direct share purchase, we see that households are a material force to be reckoned with: overall 25 percent higher than foreign portfolio investment (FPI) net inflows over the last two years,” a January 20 UBS note said. the key trigger for the increased retail participation in equities has been the lockdown triggered by Covid-19 that saw investors channelizing their savings to capital markets in search of a better return on their investments and the need to increase their disposable income. The share of client participation in capital markets at the NSE for individuals rose to 46 percent in fiscal 2020-21 (FY21) on a YTD basis, as compared to 39 percent in FY20, UBS said.

Trying to chase market momentum many a time, end up burning your fingers. That is exactly what has just happened to small investors in at least nine BSE500 stocks. Retail investors, defined as those investing up to Rs 2 lakh in the shares in a company, bought so much into those nine companies during the September quarter that their combined stake in them rose by 200-700 basis points in three months. A 28-115 percent rally on such of these stocks in the June quarter seems to have drawn the investors to these counters. None of the stocks has delivered positive returns since June 30. Data showed small retail investors hiked stakes in Indiabulls Housing Finance by 432 basis points to 16.02 percent in September quarter from 11.7 percent in June quarter, following a 115 percent rally on the stock in June quarter. But the stock is down 27 percent since then. Read more

The initial public offer of Angel Broking has been subscribed 3.9 times on September 24, the final day of bidding, backed by retail investors. The Rs 600-crore initial public offering of Angel Broking was subscribed nearly 2 times on the National Stock Exchange (NSE) and BSE on Wednesday, the last day for bidding. The IPO has received bids for 2.43 crore equity shares against an offer size of 1.37 crore equity shares, the data available on exchanges showed. The offer received a bumper response from retail investors who have subscribed the issue 3.4 times so far on Day 3 of the issue. However, the IPO failed to get any subscription from Qualified Institutional Buyers (QIB). The IPO consists of a fresh issue of Rs 300 crore and an offer for sale of Rs 300 crore by promoters and investors. Angel Broking is one of the largest independent full-service retail broking house in India which was incorporated in 1996 in terms of active clients. Read more