![Broking firm in Bengaluru sees surge in new accounts amid market crash Broking firm in Bengaluru sees surge in new accounts amid market crash](https://thefederal.com/file/2020/03/businesswoman-analyzing-stock-market-kpi-with-bi-computer-smartphone-picture-id834792042.jpg)
Broking firm in Bengaluru sees surge in new accounts amid market crash
Stock markets across the globe are crashing due to the impact of the coronavirus pandemic and the situation is no different in India. However, a Bengaluru-based stock-broking firm said it observed a disruptive trend of new account openings on their platform since the crisis began.
Stock markets across the globe are crashing due to the impact of the coronavirus pandemic and the situation is no different in India. However, a Bengaluru-based stock-broking firm said it observed a disruptive trend of new account openings on their platform since the crisis began.
Zerodha founder and CEO Nithin Kamath said the new customers are saying that it is a good time to start buying for the long term.
Seeing this happen for the first time in my 15 years of broking. Account openings going through the roof after a crash in the markets, new customers being smart, not panicking and telling that it is a good time to start buying for the long term. It is unreal! pic.twitter.com/yLcn2Jl2y2
— Nithin Kamath (@Nithin0dha) March 17, 2020
“Seeing this happen for the first time in my 15 years of broking. Account openings going through the roof after a crash in the markets, new customers being smart, not panicking and telling that it is a good time to start buying for the long term. It is unreal!” said Kamath in a tweet.
The firm reported the doubling of new accounts in April, 2019 as compared to the previous month. A similar trend was seen in the next six months.
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However, after December, opening of new accounts witnessed a sharp increase of around 144 per cent as compared to the previous month. In February and March, the firm saw 155 and 247 per cent hikes respectively. This came even as the markets were plummeting almost regularly for two consecutive months.
“We are unsure of the reason behind the sudden surge in account openings. The case might be that the investors are looking at an opportunity where they are ready to buy stocks and think the markets will rebound after this. But we are very unsure why people are opening accounts at this time,” said Mohammed Shoaib, head (on-boarding), Zerodha.
Shoaib said this is the first time he is seeing this in his eight-year-long career. “The average age group of new investors is around 31-32 years,” he said. “People should wait and watch and not invest in a hurry. We really don’t know where this market is headed to.”
For new investors, Kamat told The Federal it is a good time to start investing in mutual funds, but in small chunks at a time. “Start a SIP if you don’t have one; this is a good entry point,” he said.
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Ashutosh Joshi, another stock-broker based in Pune, echoed similar views as that of Kamath, and said long-term investments can be planned at this point of time.
“Many well-performing stocks have come down by 30 to 40 per cent of their average prices, which is the rate they had around three-four years ago. So it could turn out as one of the best times to invest,” said Joshi.
He too advised one should invest in small amounts over the period of the next few days instead of just putting up a big chunk in one go.