Monday, July 6, 2020

Psychology of New Retail Robinhood Investors

Last Updated : Jun 18, 2020 10:20 AM IST | Source: Moneycontrol.com

Money flows into equities from tier-2,3 cities during lockdown, women not far behind

The majority of our clients' growth came from the metro and tier-1 cities but we have also registered handsome growth from tier-2 cities like Nagpur, Jaipur, Nasik

While the nation has been in a lockdown since March, many investors used the time to invest in equity markets, according to top brokerage firms. According to them, there has seen a rise in new accounts being opened during March-May period, especially from Tier-2 and Tier-3 cities.
Nifty50 made an intermediate bottom at 7,500 in March and since then the index has rallied over 30 percent. Money invested in the market in March has already reaped returns.
Ajay Menon, CEO, Broking & Distribution, Motilal Oswal Financial Services told Moneycontrol monthly acquisition is up 50 percent compared to last year’s average during the March to May period.
Another brokerage firm, 5paisa.com added over 60,000 accounts in March and the trend continues and we expect to add over 2 lakh accounts in the April-June quarter, Prakarsh Gagdani, CEO, 5paisa.com told Moneycontrol.
Angel Broking, which is India's largest independent full-service digital broking firm, witnessed average monthly new accounts of over 1 lakh since the lockdown started in March.
The lockdown might have had a negative impact on the economy, but investment via equities as well as through mutual funds has only increased. The reason behind this – financialisation of savings amid record-low saving rate in banks, say experts.
Tracking the trend, brokerage firm Phillip Capital initiated coverage on AMC companies. “Financialization” of savings is a big structural change in India’s economy. With the current COVID crisis expected to start a new NPA cycle, we find AMCs as an attractive play with limited balance‐sheet risks,” it said in a report.
Tier-2 and Tier-3 cities take the bigger chunk:
Well, the value unlocking is happening from the Tier-2 and Tier-3 cities, according the brokerages. Zerodha, a discount brokerage firm with over 2+ million clients, said that they opened over half a million new accounts since the lockdown started.
“Overall we have registered an increase of more than 27% in our client-base with a nearly 300% increase in the monthly account opening numbers. We have already opened more accounts in the first 5 months of 2020 compared to what we had acquired in 2019,” Nithin Kamath, Founder & CEO, Zerodha told Moneycontrol.
“The majority of our clients' growth came from the metro and tier-1 cities but we have also registered handsome growth from tier-2 cities like Nagpur, Jaipur, Nasik,” he said.
The trend is not limited to Zerodha, Angel Broking added more than 1 lakh new accounts in March 2020, and said that more than 80% of their acquisitions have been in Tier-2 and Tier-3 cities. Out of the overall figure, around 65% of our new clients are first-time investors.
“Angel Broking is also doing handholding with free of cost fundamental analysis and by conducting in-depth webinars on wide-ranging nuances of trading,” Vinay Agrawal, CEO, Angel Broking told Moneycontrol.
“Further, about half of them belong to the mid-age group of 25 to 35 years, while a quarter are between 18 and 25 years of age and balance are more than 35 years old,” he said.
5paisa.com also suggested that about 70 percent of the accounts they have opened are from Tier-2, Tier-3 cities and beyond. For five paisa this has always been the trend, however, there has been an increase in trading volume from the smaller locations since the lockdown.
Women investors on the rise?
The proportion of women investors have remained almost 10 percent of the new accounts being opened which is approximately the same compared to pre-COVID period – but it is still encouraging sign.
Since the implementation of lockdown, Angel Broking has introduced over 30,000 women investors to the D-Street. This is about 10.5% of the total account opened during this period.
“The women’s participation in stock markets is increasing directly in line with the retail participation. A factor behind it is the gradually decreasing gender disparity across workplaces,” Agrawal of Angel Broking told Moneycontrol.
“Since stock investments offer superior financial empowerment as well, we are surely going to tap and augment this burgeoning force,” he said.
Prakarsh Gagdani, CEO, 5paisa.com told Moneycontrol that women investors are around 10%, there is no significant change in their numbers.
However, data from Motilal Oswal sees rise in women investors during the lockdown period.
“The new accounts are coming from across locations as we are present in 500+ cities. Mostly accounts come from the metro and tier-2 cities only, and 20% accounts are getting opened by women investors,” Menon of Motilal Oswal Financial Services Ltd told Moneycontrol.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
    Last Updated : Jul 07, 2020 10:55 AM IST | Source: Moneycontrol.com

Story in a chart: Nifty on the verge of a breakout or a whipsaw? These patterns will explain

The RSI as well as MACD have formed bearish divergences. MACD is a relatively heavy indicator compared to RSI which means it doesn’t move as fast as RSI.

Moneycontrol Contributor @moneycontrolcom

Gaurav Bissa
The Nifty50 has a strong hurdle between 10,750-10,800 levels and can dip toward levels of 10,400-10,200 in the coming days with view negation above 11,000 closings.
The Nifty has seen a strong move since the last few weeks and is now at a crucial level of the rally. However, the overall trend remains positive for now.
The chart below shows Nifty exhibiting clear Dow Theory which includes the formation of Higher High and Higher Low denoted by HH and HL respectively.
This is a characteristic of an uptrend. However, there can be some whipsaws or retracements along the way which I have shown in other charts.
NIFTY DOW THEORY

On a 4 hours chart, the Nifty has now formed a bearish ‘Wolfe Wave’ pattern. The Nifty can see some upside till 10800 but there is a strong hurdle at that level which can push the Nifty to lower levels.
Also, the RSI, as well as MACD, have formed bearish divergences. MACD is a relatively heavy indicator compared to RSI which means it doesn’t move as fast as RSI.
The fact that it is witnessing a fall while Nifty is rising raises some questions about the strength of trend on an immediate basis.
NIFTY WW

Along with Wolfe Wave pattern, Nifty is also forming two bearish harmonic crab patterns on hourly charts with prz (trigger point) near 10800 level which is also where immediate resistance is placed.
NIFTY HOURLY HARMONICS (1)
(The author is AVP-Technicals and Derivatives at LKP Securities)
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Last Updated : Jul 07, 2020 10:44 AM IST | Source: PTI

Samsung projects 23% jump in 2Q profit on strong chip sales

The South Korean technology giant will release more detailed information when it announces its finalized earnings later this month. It projected its operating profit during the April-June period will be 8.1 trillion won ($6.8 billion). The company's revenue for the quarter is forecast to fall 7% to 52 trillion won ($43.6 billion).

Reuters
Samsung Electronics Co. said Tuesday its operating profit for the last quarter likely rose 23% from the same period last year, helped by robust demand for memory chips used in personal computers and servers as the coronavirus pandemic has more people working from home.
The South Korean technology giant will release more detailed information when it announces its finalized earnings later this month. It projected its operating profit during the April-June period will be 8.1 trillion won ($6.8 billion). The company's revenue for the quarter is forecast to fall 7% to 52 trillion won ($43.6 billion).
After reporting a 3.4% increase in operating profit in the first three months of the year, Samsung said in April it expected its second-quarter profit to decline with the pandemic pushing down sales of smartphones, TVs and other products.
Analysts say Samsung, which is the world's largest provider of semiconductors, is continuing to benefit from robust chip demand generated by PCs and servers. It's likely that the pandemic is also forcing the company to spend less on marketing due to traveling restrictions.
First Published on Jul 7, 2020 10:37 am
Last Updated : Jul 07, 2020 10:29 AM IST | Source: PTI

COVID-19 pandemic | Vistara will let passenger book adjacent seat at discount to keep it vacant

Kannan said the occupancy rate in Vistara flights has been on an average between 50 to 60 percent since the domestic passenger services resumed on May 25.

PTI
Representative Image
Representative Image
A passenger planning to travel on a Vistara flight will soon be able to book the adjacent seat as well at a discounted rate so as to keep it vacant, said its Chief Commercial Officer Vinod Kannan on July 6. This statement came after Vistara released a survey on Monday that stated 24 percent passengers were worried that fellow flyers would not adhere to coronavirus-related health protocols while flying.
Kannan told reporters the airline has sent out a note to travel agents informing that currently, passengers can book the adjacent seat, in order to keep it vacant, at the same price.
However, he added, "We are looking to provide this on the online scenario and also provide some kind of incentive by discounts. That is something that is in the works."
Kannan said the occupancy rate in Vistara flights has been on an average between 50 to 60 percent since the domestic passenger services resumed on May 25.
Scheduled international passenger flights continue to remain suspended in India.
A total of 65 percent of its customers are planning to take their next flight within the next six months, said the survey released by Vistara on July 6.
According to the survey, business travel emerged to be the biggest reason for them to travel, with 35 percent of the respondents indicating so, while 25 percent of the respondents expected to travel to visit friends and relatives.
The survey found Singapore, Dubai and the UK as the top three destinations for customers wanting to take their first international flight.
Around 6,000 Vistara customers participated in this survey.
When it comes to concerns related to flying, 31 percent of the customers expressed fear of exposure to coronavirus during the journey, 24 percent were worried that fellow passengers would not adhere to health protocols and 15 percent were concerned about high fares.
India resumed its domestic passenger flights from May 25 after a gap of two months due to the coronavirus-triggered lockdown. However, the Centre has permitted airlines to operate maximum 45 percent of their pre-COVID flights. Also, it has imposed upper and lower limits on airfares.
When asked by when would Vistara be able to operate 45 percent of its capacity, Kannan said, "It is a function of when we see cases tapering, when we see different state governments relaxing some of their constraints...I think it will take some time to reach the 45 percent (mark)."
He was talking about the restrictions various state governments have put on their airports on the number of flights they can handle per day.
For example, between May 25 and July 5, the Kolkata airport and the Bagdogra airport were permitted to operate 20 flights per day each.
However, with the West Bengal government seeing a steep rise in COVID-19 cases, the Kolkata airport announced last Saturday that no passenger flights will operate to Kolkata from Delhi, Mumbai, Chennai, Pune, Nagpur and Ahmedabad between July 6 and July 19.
First Published on Jul 7, 2020 10:25 am
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