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Online trading `slow' on the uptake

Our Bureau

COIMBATORE, Oct. 27

ONLINE trading in shares, despite the hype surrounding it, will take some time to pick up in India despite the growing penetration of the PCs, according to Mr Hemang Raja, Managing Director, Investsmart India Ltd (IIL), Mumbai.

There were also several issues such as security of trading online, which had to be settled before online trading could become a serious competitor to brick and mortar trading, he added.

Mr Raja, who was here in connection with the opening of IIL's Retail Investment Centre (RIC), said as per SEBI's recent statistics, the weekly trading on the BSE and NSE was to the tune of Rs 50,000 crore. Of this, online trading accounted for just about Rs 85 crore.

While conceding that this figure was much higher than the Rs 10-crore per settlement registered by online transactions two months ago, he said online trading in stocks was still in a nascent stage in the country.

He was hopeful of the online trading percentage moving up to around 20 per cent of the total volume of trading when there was a wider awareness about it.

He, however, added that online trading would be one of the trading platforms available for investors and it would not replace the conventional mode of conducting share transactions through intermediaries such as stock brokers.

He said that a lot of investment decisions were made based on advice given by market intermediaries. Though such advice was available to some extent online too, the latter did not have the personal touch. Moreover, investors were also concerned about the safety aspects of trading online.

He said online trading, as a concept, was yet to pick up. But in two or three years as awareness grew, its share in total volume of trading would go up.

Referring to Investsmart's activities, he said the RICs were being opened with a view to providing professional advice and offering a slew of financial products. The RIC would have a cyber cafe, which would help the investors in accessing the Internet fo r latest financial news and updates.

Orix Corporation, Japan and the K. Raheja group have a stake in Investsmart, which is promoted by IL and FS. The company has plans to open RICs in Salem and Madurai, Tamil Nadu, during the current year, apart from adding one more centre in Chennai (possi bly at Tidel Park, Taramani), which at present has two RICs.

IIL has RICs in 12 cities across the country now and the idea was to extend it to 10 more cities. The Coimbatore RIC was inaugurated by Dr Jayram Varadaraj, Managing Director, Elgi Equipments Ltd.