Broking firms see 400% leap in online trading value

The number of investors opting for online trading has gone up manifold, according to the recently published 'India’s Leading Equity Broking Houses, 2008' by Dun & Bradstreet (D&B). The publication says that less than 10% of the 191 broking firms surveyed reported huge growth in opening of e-broking accounts and some firms saw a surge in value of up to 400% in e-broking during 2007.

According to the report, number of e-broking accounts registered in 2007 have grown exponentionally. Indiabulls Securities Ltd added 4,51,611 accounts while a relatively new firm in the industry, Reliance Money added 2,15,678 accounts during the same time period. Motilal Oswal Securities Ltd managed to add 19,065 accounts while Unicon Financial Intermediates Pvt Ltd could increase their e-broking accounts by 13,787.

Manoj Vaish, president and CEO-India, D&B Information Services India, said, “A new class of tech-savvy investors is increasing in India and also the maturity level of these investors is reaching new heights. e-broking also makes a good business sense as the manpower cost gets reduced and also the reach is amazing. The broking firms can get away from expansion cost and the risk management system is quite robust when technology is used. I see the trend in the e-broking increasing in the years to come and as of now I don’t see any major roadblocks in the way."

According to market watchers, the rise in the value of on line transactions is also because of sustained bull run witnessed in 2007, when the 30-share Sensex of the Bombay Stock Exchange (BSE) gained from 13,842 points to 20,207 points, a gain of 6,365 points (up 47%).

e-broking is contributing a sizeable portion to the trading volumes and also to the revenue generated for leading stock broking firms. Some examples of the percentage contribution to trading volumes contributed by e-broking are 91% in case of Reliance Money, 62% for India Bulls, 20% each for ASL Capital and Shreyas Stock, 19% Angel Broking, and 15% Farsight Capital.

In respect of revenues generated from e-broking, India Bulls (63%), Reliance Money (54%), Unicon Financial (30%) and Shreyas Stock (20%) reported higher shares in 2007. Ashika reported 98% growth in e-broking business in the first 10 months of 2007.

Another significant trend is the growth in international business of broking firms. Firms that reported presence of offices outside India include Reliance Money, Motilal Oswal, Karvy Stock Broking, JRG securities, Vogue and Bonaza Portfolio.