Skip to main content

Online Trading and Brokerage Stocks

onlinetrading
With Indian economy moving on an up cycle during FY10, FIIs infused $20bn in Indian capital markets, and retail participation has also improved through direct investments through stock brokers,  insurance and mutual fund route. There is a significant jump in number of online trading by retail traders and this trend is likely to continue its upward journey. So let us throw some light on this brokerage sector, albeit cyclical in nature.

Corporate fund raising activity (through QIPs, IPO, and debt syndication) has gained momentum during FY10, along with the secondary capital market volumes which has clocked a growth of 60% yoy.  This has aided capital market intermediaries’ fee-income substantially. Operating cost of capital market intermediaries is largely variable in nature but still cost effective distribution model - franchisee and online trading through portals helps in keeping a check on operating cost. And, thus operating and net profit margins are likely to remain stable.

India InfolineEdelweiss Capital and Motilal Oswal  are the prominent listed stocks in this sector. Post correction, these stocks are trading at discount to the benchmark index valuations. The valuations are reasonable, which make them stocks to watch on any declines.

Popular posts from this blog

NSE Trading Holidays 2024

 Trading holidays for the calendar year 2024. The National Stock Exchange of India (NSE) has notified trading holidays for the calendar year 2024 as below: Muhurat Trading:  Timings of Muhurat Trading shall be notified subsequently. 

What are Inverse ETFs?

We all know Mutual Funds, but what are inverse ETFs or Inverse Mutual Funds all about?  They are a special type of funds in which the value goes up when the stock market comes down. They are nothing but "short funds" or ETFs - funds having short positions of the index or stocks. By investing in this fund investors/traders can take advantage of fall in the markets. The main objective of the such products is to provide investors with an alternative during market-decline and in the case where they cannot short sell the index. This type of fund is generally linked to the market index such as the  Nifty 50 Total Returns Inverse Index.  The value of such funds change similar to the traditional funds, on a daily basis, say if the index declines by 1 percent in a day, the fund value increases by 1 percent for that day. How does these funds benefit retail investors or traders? Many investors,rather traders, can make use of this type of fund as a hedge against market conditions.Hedg