Strong economic recovery will keep markets buoyant for quite some time to come and data-savvy new investors will ensure equity market participation is high, Dinesh Thakkar MD and Chairman, Angel Broking tells ET Wealth.With markets at record highs, what are your expectations for the next few years?Markets have shown tremendous recovery in the span of just 10 months. From the record lows of Nifty’s 7,500 points to 15,400 points now on the back of high liquidity flows, we are looking forward to a strong economic recovery to take this momentum forward. In addition, we have seen a lot of retail participation, especially among millennials and first-time investors, which shows their confidence in equity markets. We expect this trend to continue.What is the best way for investors to approach a runway market like this?Markets reflect growth in the economy. India has enough growth drivers to keep markets in a bullish mode for the long term. It is difficult to time the markets. The best approach for an investor is to regularly invest in 15 to 20 stocks reflecting the sectors contributing growth to our economy. It may appear overwhelming, but in this digital era there are easy-to-follow investor education programs and investment advisories available. We provide such help through Smart Money and ARQ Prime.Retail investors have taken to direct equities in a big way in the past year. How prepared are new investors to deal with market uncertainties?In the past 10 months, the industry opened more than one crore demat accounts compared to about 50 lakh in 2019-20 and about 40 lakh in 2018-19. At Angel Broking, we acquired approximately 16.5 lakh clients during this period, the majority being first-timers. They are mostly digital natives, reflecting a new India. This generation is characterised as fast adopters who are data savvy and have access through smartphones to a huge information base. They are also well networked through community platforms on the web. In March and April 2020, when markets corrected, we saw increased participation by retail investors who were otherwise waiting on the sidelines for a correction. They seem to understand the uncertainties of the market and are well educated to take calculated risks. They are young and ready to understand the vagaries of the * equity markets.What is your assessment of the cryptocurrency fascination among investors?Bitcoin and other digital currencies are gaining a lot of traction globally among the retail population. However, it all depends on the measures undertaken by the central institutions and their vision to make something of these currencies.Are surveillance measures in India robust to prevent/tackle systemic issues from episodes similar to Gamestop in US?Our regulators have been implementing many surveillance-related measures as well as monitoring limits based on free floats of every scrip listed on exchanges. They keep a close watch on the key parameters, like client concentration in a particular scrip, percentage of client turnover compared to market turnover, the curbing of excessive volatility, and scrip-wise circuit filters. Regulators have time and again updated regulations, keeping investor safety at the core. With all these measures in place and the continuous monitoring of live trading sessions, I am very confident that the regulators would be able to prevent a similar episode.2020 saw highest instances of broker defaults. How can investors be protected better?It is unfortunate these instances happened. However, the regulators are regularly monitoring the movement of funds and securities from client bank accounts and demat accounts maintained by the brokers. In addition, the steps taken by Sebi, such as daily reporting of clients’ ledgers and shares and direct integration with banks to obtain broker transaction data, are aimed to bring more transparency and boost investor confidence. I believe these measures will generate lots of confidence for retail investors.How is the competition from discount brokers redefining the industry? In the wake of this, what is Angel Broking’s strategy?Over the last couple of years discount brokers have experienced expanding market share, not only in client acquisition or NSE active client base but also in daily turnover on exchanges. This was primarily driven by simplified and uncomplicated pricing structure offered by flat fee players like Angel Broking. Now since majority of the players are moving to a similar product offering, we believe customer engagement and experience will be the key differentiator in future.At Angel Broking, it has been our constant endeavour to simplify the process thereby ensuring higher customer satisfaction. Technology is expected to play a pivotal role in taking the financial sector to the next level by helping overcome the challenges stemming from India’s vast geography and the fact that physical footprints in smaller locations are commercially unviable.Our superior digital properties, client engagement, and seamless customer experience have created a large pool of approximately 35 lakh customers. Despite nearly doubling our client base in the current financial year and expanding turnover based market shares, we believe there is tremendous scope for deepening the market and enhancing customer engagement by augmenting investment in technology and extensively using artificial intelligence and machine learning capabilities. A digital first focused company like ours will play a critical role in this development. Using this tech-intensive and customer-centric approach, we envision ourselves in the pole position over the next few years.
from Economic Times https://ift.tt/37RJH27
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