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Real estate industry

Volatile Stock Market Dampens Investor Enthusiasm

Strategic Insights

— 1 min read

The Indian stock market, as depicted by Sensex and Nifty, showcased a healthy growth of around 18% to 20% in the last calendar year. However, this growth was not mirrored in the retail participation in Ahmedabad, where the total turnover of BSE and NSE witnessed a sharp decline of 21%. Experts attribute this decline to the shift of investor interest towards gold and real estate, while scrips that had ended up by over 80% in 2009 failed to generate enthusiasm among investors in 2010.

Key Takeaways:

  • The total turnover of BSE and NSE from Ahmedabad fell by 21% from Rs3,42,465 crore in 2009 to Rs2,69,024 crore in 2010.
  • Among the top cities, only Mumbai witnessed a marginal increase in volume, while Delhi, Ahmedabad, and Cochin experienced a downward trend, with Delhi witnessing a 25% fall in daily turnover.
  • The average daily turnover of Ahmedabad slipped to Rs1,063 crore in 2010 from Rs1,409 crore in 2009, a decrease of Rs346 crore.
  • Experts attribute the decline in retail participation to investment in gold and real estate, as well as a preference for small-cap and mid-cap scrips over frontline stocks.
  • Mahendra Prajapati, of India Infoline Ltd, believes that the rise in frontline stocks did not match the expectations of small-cap and mid-cap stocks, leading to a significant reduction in retail participation.
  • Partha Gupta, financial planner, Investment Idea Financial Services, attributes the decline to the diversification of investments in the country after the sub-prime crises.
  • Vijay Popat, regional director of Angel Broking Ltd, cites an investment shift to gold and real estate from the stock markets, as well as increased involvement in business ventures.

Statistics:

  • BSE benchmark Sensex registered a 17% jump to reach 20,509 in 2010 as compared to 17,464 in 2009.
  • Total turnover of BSE and NSE fell by 5% from Rs47,28,121 crore in 2009 to Rs44,66,221 crore in 2010.
  • Ahmedabad's turnover volume of BSE and NSE witnessed a steep fall of 21% from Rs3,42,465 crore in 2009 to Rs2,69,024 crore in 2010.
  • Daily turnover in Delhi fell by 25% to Rs1,898 crore against Rs2,537 crore in 2009.

Sources:

  • DNA (Daily News & Analysis) - Copyright 2010 Diligent Media Corporation Ltd. All Rights Reserved.
  • Mahendra Prajapati, of India Infoline Ltd.
  • Partha Gupta, financial planner, Investment Idea Financial Services.
  • Vijay Popat, regional director of Angel Broking Ltd.

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