Date:11/05/2006 URL: http://www.thehindu.com/2006/05/11/stories/2006051113120400.htm

Karnataka - Bangalore

Young professionals who love to take the bull by the horns

R. Chandrakanth

The stock market is attracting new investors — employees of information technology and call-centre units

With the IT and ITES boom, online trading has got a fillip
Most investors are 25 to 35 years and have easy access to Internet
They prefer infrastructure, pharmaceuticals and IT stocks

In view of the trend, broking companies are expanding business

Bangalore: With the Sensex soaring to phenomenal levels, employees of software and BPO (business process outsourcing) units here are laying bets on stocks. It is estimated that brokers have a daily turnover of Rs. 100 crore to Rs. 150 crore each, on average, and the information technology (IT) and ITES (IT enabled services) sectors account for a fair portion.

The trend of IT professionals investing in stocks is fast catching up, and broking houses are expanding business in Bangalore more than in any other city in south India. The professionals have brought a paradigm shift in the trading pattern by taking up online trading. One securities company does 60 per cent of its business online while another is moving into that realm, considering the market.

Channaraj, Branch Head of Sharekhan, Bangalore, says: "Given the city's burgeoning middle-class population, spurt in urban consumption and increased disposable income, we envisage tremendous growth in online share trading." With the IT and ITES boom in the city, online trading has got a fillip, and more software and call-centre professionals are turning first-time investors. It is the young brigade which is leading the investment charge, so to say. For Sharekhan, about 30 per cent of the client comprises first-time investors, most of them in the age group of 25 to 35 years, who have easy access to the Internet.

Sharekhan conducts 60 per cent of its trading online. Considering the growth opportunities, the company, which started with one branch in 2002 and online trading accounting for only 10 per cent, now has five branches and 22 franchisees. And it is not only Sharekhan which has seen such exponential growth (said to be 35 per cent to 40 per cent year on year in turnover).

Why are software professionals investing in stocks?

The reasons are not difficult to fathom. Real-estate prices are soaring, interest rates are low, and investments in movable assets have slow growth.

The stocks these young investors have shown a preference for include infrastructure, pharmaceuticals and IT. Though they are not making huge investments, they are certainly making prudent investments.

According to R. Madhu, Manager (Marketing), Motilal Oswal Securities, Bangalore is certainly is moving on a fast track with not just the IT and ITES sector professionals, but also other salaried classes putting monies in equities.

Considering the trend, the company is planning to increase its online trading capacity, which is now 30 per cent. Having started in 1999 with a client base of 10, Motilal Oswal now has over 6,000 clients.

Broking houses have been tapping this market through promotional events in the IT corridor and at shopping malls.. And it is a win-win situation for both the broker and the investor.