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Aditi Chandrasekhar

Chennai, Dec. 2 Investors are interested in shares of fewer companies than they were at the beginning of the current calendar year.

The number of companies whose shares is being traded in the Bombay Stock Exchange has till date tumbled by over 10 per cent since January.

This could probably be due to dwindling participants, as well as the rise in the number of terminals that has turned inactive over the year.

“The numbers go down primarily because people lose interest. The present market conditions have left traders bereft of much ability to take risks,” said Mr V.K. Sharma, Head of Research at Anagram Stock Broking.

The number of scrips active in January was around 2,800, from which it has fallen to an average of about 2,500 scrips currently.

“There is likely to be a further fall in numbers, by at least 5-7 per cent in months to come,” he said.

“This pertains to a bear market. There is a loss of confidence in market behaviour, and investors are waiting for a change in trends. Penny stocks would be the sector witnessing lowest levels activity,” said Mr Sharma.

The number of terminals at the National Stock Exchange in September was at 2,863, a fall from this year’s high of 2,956 active terminals in March. However, the number of companies whose shares traded on the NSE remained around the 1,200-1,250 levels since the beginning of the year.

“Though there wouldn’t have been a significant rise in the number of closures, there would definitely have been a few. This was because several traders were closing unviable branches and reducing number of locations there were present in, in an effort to cut costs,” Mr Sharma said.

According to Mr Arun Kejriwal , proprietor of Kejriwal Research, “Over the year, there has been a loss in volumes by over 60 per cent, this does not mean that 60 per cent of the terminals have closed down. However, the hit in volumes is taking its toll on broking firms.”

Broking houses witnessed a slew of pay cuts, as well as a drop in headcount, on account of brokerages struggling to cut their overhead costs in a flat equities market.

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