• 15/08/2022 9:34 pm

#Trend in retail participation is here to stay! 7 sectors which Robinhood investors should bet on

In 2020, there has been significant growth in the Demat accounts across the country. There is a huge demand for a simple and safe investment platform for stocks that a novice investor can invest through.

Calendar 2020 has been a difficult year for investors on D-Street but that did not stop retail investors to participate in the rally. Work from home culture, seamless technology platforms across brokers, and willingness to add an extra source of income amid COVID-19 pandemic fuelled retail participation on D-Street — popularly known as Robinhood investors.

Both Sensex and Nifty50 have rallied by about 50 percent from the March lows which suggests that the momentum is intact. Much of the participation on the Street has come from retail investors, and experts are of the view that the trend is here to stay.

Almost 5 million new DEMAT accounts were added at the end of FY20. This came when both Sensex and Nifty50 lost more than 20 percent in March. Total Demat accounts by the end of FY2020 stood at 40.8 million, up from 35.9 million as of March 2019, as retail investors took to equities.

“The number of new Demat accounts (dematerialised accounts) opened during the financial year 2020 was the most in at least a decade at 4.9 million. A 22.5 percent increase has been observed i.e. 4 million Demat accounts opened in the previous year, showed data from the Securities and Exchange Board of India,” Jashan Arora, Director Master Capital Services told Moneycontrol.

“While people working from home, have time to explore trading in equities. Low prices of stocks have given the investor an opportunity to enter markets. Low bank deposit rates likewise brought new investors searching for higher returns compared to other asset classes,” he said.

Data suggests that there is tremendous growth in the interest of young investors in stock markets as they consider trading a profitable investment option. Investors who are willing to take part in the journey are mostly millennials, and the composition of female investors stood at 20 percent.

“When we look at the customers acquired since May, they are some clear indicators which to an extent is similar to the trend we have noticed over the past year as well. Looking at our new customer acquisitions of May, June 2020 in terms of demography: Over 60 percent of our new acquisitions are millennials (aged 24 to 40 years),” Shankar Vailaya, Director, Sharekhan by BNP Paribas told Moneycontrol.

“The percentage of females is a little below 20 percent. In terms of occupation, the percentage of salaried is just below 50 percent. And, 30 percent new clients come from tier I cities – Mumbai, Delhi, Bangalore,” he said.

Vailaya further added that even if the WFH is lifted, the trend of increased capital market participation should continue unless the market gets unpredictable. COVID has given a lot of time to investors to read, surf on the web, chat and discover the advantages of capital markets.

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