Direct retail inflows are seen waning in 2022 as weakness in the market weighs on sentiment, a report by Business Standard stated.
As per the report, in the calendar year 2021, individual investors poured a net ₹1.4 lakh crore into the cash market segment of the National Stock Exchange (NSE), however in the first quarter of 2022, the net retail flows came in at ₹49,700 crore, data provided by the exchange shows.
The net flows for the recently-concluded June 2022 quarter aren’t available yet, noted the BS report.
"However, there are tell-tale signs that individual investor flows have slowed. The average daily turnover for the cash market segment slipped below ₹40,000 crore for the first time since February 2020. Further, the share of individual investors in the cash market turnover, which had shot up to 45 percent in FY21, has fallen to 40.7 percent in FY22," added the report.
Meanwhile, before record retail flows in 2021, in the calendar year 2022, the retail flows stood at ₹51,200 crore, however, it was in the red for the 3 years before 2020. In 2019, the figure was -24,500 crore, in 2018, it was -81 crore while in 2017, it was -30,500 crore, data in the BS report showed.
Also, the face of new Demat account openings, too, has moderated. “Retail investors are by nature bullish. So unless markets are on an upward trajectory, retail participation reduces. This year will be a tough year as volatility will be at its peak,” E Prasanth Prabhakaran, MD & CEO, Yes Securities told BS.
