The Hindu Business Line : Market boom triggers rush for demat accounts

Even as the number of new demat accounts are rising, it is the duty of the Government to make sure that there is no irregularity. Apart from levying a fine, the shares obtained through malpractice should be deferred and transferred to a special account.

T.S. Sundareswaran,

New Delhi

The rise in the number of demat accounts this year is mainly because of the jump in number of IPOs. When our company came out with an IPO, four of our staff opened demat accounts only to apply for the employees’ quota.

Generally, employees also open demat accounts when they are offered ESOPs. When the demat accounts are opened by serious investors, it is a healthy sign.

S. Pachinathan, Nagercoil

With the disposable income on the rise, the stock market is attracting more retail investors.

The aggressive marketing of IPOs and NFOs are attracting even the pensioners, who prefer to invest their terminal benefits in the shares.

Though the PAN card has been made mandatory for opening a demat account, enough care must be taken to avoid any malpractices.

One cannot forget the IPO scam where a number of fictitious demat accounts were opened by adopting fraudulent means.

All the regulating bodies must ensure that demat accounts are opened only by genuine investors and there is no duplication.

The authorities concerned should not hesitate to take stringent action against those financial companies and share brokers who indulge in malpractices.

S. Nallasivan, Tirunelveli

The rise in the demat accounts indicate the fact that a large section of retail investors are flocking to the markets.

From our past experience we know that retail investors enter the market towards the end of a bull run, ending up as losers.

As the retail investors do not understand today’s market dynamics, unlike the high net-worth individuals and institutional investors, they can venture into the stock markets indirectly through mutual funds or portfolio management services, leaving the money management to professionals.

Krithivasan, e-mail*

The news can be considered as a positive factor.

The retail participation cannot be denied with more people jumping into the markets at district and taluk levels to make money out of the boom.

The fear of scam is still lingering in our minds and the rise in the applications for PAN should be correlated with the demant accounts to avoid any future scams.

G. Balakrishnan, Madurai

More Stories on : Stock Markets | Sticklish Issues

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Suggest ways by which airline companies can manage costs better

Various forms of audit confirmation

When a professional teaches part-time

Ticking time

Market boom triggers rush for demat accounts

A primer on sub-prime crisis

Just Do IT

Number Crunch

Am I a brand ambassador?

Pocket-sized dynamos

Adapt to changes in the work environment

Child as ‘learning capital’