Trading shares via mobiles account for a fifth of trades led by new-generation investors: Report

A new generation of investors has taken to stock trading on mobile phones with a renewed zeal, with a fifth of trades accounted by this new mode of investing, a report by Business Standard stated.

As per the report, the proportion of the cash market turnover ascribed to mobile phones has jumped from 5.3 percent in June 2019 to 18.7 percent in June this year, reveals BSE data.

The share of mobile trading on the National Stock Exchange (NSE) for June this year stood at 19.5 percent, it added.

A report by NSE states that the trend in internet-based trading has gained momentum since March 2020 due to increased retail participation, particularly since the nationwide lockdown, noted the market daily.

“Retail investors and traders started utilising the online platform to trade equities directly from the comfort of their homes,” the exchange said.

Meanwhile, industry experts told BS that young investors are becoming active traders, while the higher smartphone penetration and lower data charges are powering this trend.

“About 70-75 percent of our customers are GenZ and millennials. From the day we started operations, mobile applications contribute 70 percent to our turnover,” said Prakarsh Gagdani, chief executive officer, 5Paisa Capital.

With investors adapting to the digital medium quicker, the broking community has invested more in technology (tech). The volumes that came through dealers shifted to mobile phones due to the limited availability of dealing room staff after the pandemic, experts further explained.

While industry spending on tech has gone up, it has been able to save on employee costs, they said, adding that earlier, clients used computer-to-computer link systems of brokers to place orders with the help of dealers.

The report also noted that mobile trading has helped bring down trading costs drastically since it has helped reduce dependence on personnel used to punch orders. As customers do their trades on mobile phones, the chances of them sticking to their broker is higher, even if the number of transactions they do is fewer, it added.

While the share of mobile trading has remained stagnant over the past year, it will only increase in the future, predict industry players.