Leveraging social media for stock market info

Do you think tapping social media to demystify stock markets for the common man will help in increasing domestic investment in the stock market?

Emerging markets like India are rapidly evolving into agents for future growth. Despite our fast-growing GDP and a relatively stable financial market, a very small fraction of the population invests its savings in the stock markets. Educating people about these opportunities via social media would increase awareness in people on safe investing and investor friendly products, and would go a long way in attracting more people to join the race. — Prakhar Bindal

Being the third largest internet-populated country in the world, the Indian population is very careful about what to accept from the Net. Any information on social media goes viral within no time and when it is used to make people aware of share markets it makes a huge difference for sure. But the ways to use it defines the clear boundaries of penetration into the common man’s mind. Every action of a person can be replicated from his/her social media involvement and hence tapping it to educate people about the stock markets would surely increase domestic investment if done in an effective way. — Kucharakanti Ramcharan

Out of more than one billion Indians, barely 18 million invest in equity markets. According to SEBI data, 10 cities contributed over 80 per cent of trading volume in 2010. Most of the people who have money to invest stay away from the market due to lack of knowledge which in a way cultivates awe. The stock market with all its jargon and perceived technicalities is often viewed to be the arena of the few.

India might have 91 million social media users by the end of year 2013. As such social media represents a powerful tool to demystify the stock markets. It can not only serve as a medium to educate the investors but can also be used to increase transparency.

And once the investor gains confidence due to this demystification, it would not only lead to increased capital flows but also more number of participants and hence a more inclusive and efficient stock market. — Pawan Jhawar

At a point when the share of retail investors in the daily turnover of the stock markets has dropped to 34 per cent from 89.5 per cent in 2001, such a move can be transformational. The markets have not been able to generate the trust that nationalized banks have been able to create. The investor is voting for safe investment avenues and is not impressed by the lucre promised by the Street.

Add to that, the financial conservatism in Indian society and its financial institutions. At this stage, financial literacy of an emerging middle-class with investible savings could not be of more importance. Social media, of which Indian users are set to cross 90 million by December 2013, provides access to an educated urban middle-class and the youth. Social media has the power to disseminate information, build discussions which erase the common man’s doubts and in the process educate him about the markets. — Jayant Kharote

(The writers are from the PGP class of 2014, IIM Calcutta)

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