But players see high potential for growth

Ask a room-full of investors how many do their stock market trades through their mobile phones, and chances are no hand will go up.

Less than half a per cent of equity transactions on the Bombay Stock Exchange and the National Stock Exchange are currently punched through mobile phone devices.

Share of mobile trading

The share of mobile trading in the cash market segment on the NSE was 0.32 per cent in June. Mobile trades in the NSE derivative segment were at 0.18 per cent.

The numbers are lower on the BSE with no mobile transactions in the derivative segment and only 0.03 per cent share in cash transactions.

Towards the end of 2010, both BSE and NSE launched trading through mobile phones with some fanfare. Investors could punch in trades from anywhere using their Internet access code which would, in turn, be routed by the broker to the exchange.

Hurdles to growth in mobile trading could stem from the reluctance of many to revealing financial details on the Net and low comfort levels in using technologically superior products.

And, then, many investors also prefer to hear a friendly voice at the other end while trading.

“Dialling in gives you a chance to speak to a dealer and possibly benefit from advice,” says B. Gopkumar Executive Vice-President and Head, Broking, Kotak Securities.

Another reason investors cite for not trading on their mobile phone, is that when they look to buy or sell stocks, they like to check out research or other financial information about the company before punching in the trade.

This is easier done offline or on a computer with Internet, rather than on the mobile phone.

Smartphones, which are required for easy Internet access and smooth trade execution, made up 6.2 per cent of Indian mobile phone shipments in 2011.

This share is expected to expand. Technology research firm IDC predicts that such phones could account for a quarter of the mobile telephone market by 2015.

Better interfaces

Says Gopkumar: “At present market sentiment is dull and this reflects in the trading volume via mobile as well. We have actually seen a considerable increase in the number of people opting for mobile trading thanks to the better user interface and quality app performance.

“We saw an increase from 500 to 30,000 successfully executed trades per month in the last year, which is a near 5900 per cent increase. And this is increasing month on month.”

The National Stock Exchange also seconds this view. While daily trading through mobile phones was just Rs 10-12 crore when it was started, in the last quarter of 2010, it has now crossed Rs 500 crore.

There is a sharp increase in daily mobile turnover over the past year, from Rs 74 crore in June 2011 to Rs 540 crore this June.

“As the industry matures there is enough space for co-existence of all platforms, be they call and trade, Internet or mobile. The mobile is currently the fastest growing segment and greater excitement is foretold with the increasing penetration of tablets and smartphones,” Gopkumar adds.

(This article was published on August 4, 2012)
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