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Mobile trading turnover shoots up on stock exchanges

LiveMint logoLiveMint 15-06-2014 Ashish Rukhaiyar

Mumbai: A large number of retail investors, especially those based in non-metro locations, are trading in shares using their smartphones.

The average daily mobile trading turnover on the National Stock Exchange (NSE) has seen a three-fold rise in just one year. In May, trades worth `363 crore were registered daily, on average, through mobile phones. The figure was `116 crore a year ago and `59 crore two year ago.

Mobile trading turnover on BSE crossed the `200 crore mark for the first time in the month of May, surging to `208 crore from `71 crore two years ago.

Brokerages and exchanges attribute the trend to the increasing penetration levels of smartphones and the rising comfort level of retail investors with these devices.

According to Ashishkumar Chauhan, managing director and chief executive of BSE, the exchange’s real-time mobile data dissemination system is available on Android, Apple, Windows and other platforms, and has more than 200,000 users who are able to access BSE data on their mobile phones in different languages.

“The numbers are increasing rapidly as more and more users adopt smartphones,” he said.

Angel Broking Ltd, too, sees 30% of its trades through mobile phone application, while HDFC Securities Ltd said more than 20,000 clients actively use mobile phones to trade in shares.

“Around 2% of our brokerage income is coming from trades done using mobile phones and it is currently the fastest growing channel for us,” said Aseem Dhru, managing director, HDFC Securities.

He added that while the absolute number may still look small, the potential is clearly visible. “We expect that going ahead, nearly 50% of our broking income will be from mobile trades and so plan multi-lingual applications.”

Data from Google Play Store, where all Android applications, or apps, are available for download, show that share trading apps have seen a sizeable number of downloads.

Apps such as Trade on Mobile by HDFC, Angel Swift and IIFL Mobile peg the number of downloads between 50,000 and 100,000.

The number of downloads of Mobile Trading by ICICIdirect.com has been stated in the range of 100,000-500,000.

“We have seen consistent growth in usage of mobile trading from the time we launched our mobile trading platform five years ago. About 12% of our active customers have used the ICICIdirect mobile application for trading and have placed orders,” said Yagnesh Parikh, chief technology officer, ICICI Securities Ltd.

Angel Swift for tablets and Edelweiss Mobile Trader have seen between 10,000 and 50,000 downloads.

Angel Broking, which has one of the largest retail client base in the country, saw mobile trades totalling `110 crore in May. The local brokerage said more than 102,000 users traded on its mobile platform in May, with a majority of the clients belonging to smaller cities.

“Currently the trend is higher in tier-ii and tier-iii cities for reasons largely related to the Internet infrastructure in those cities, but that influence is expected to diminish going forward,” said Amit Majumdar, executive director and chief strategy officer of Angel Broking, adding that next-generation technology platforms such as 4G (fourth generation) telecom services will only accelerate the trend further.

However, while market participants are unanimous in betting on the potential of mobile trading, the share in the total turnover remains minuscule.

It is nearly four years since the Securities and Exchange Board of India (Sebi) gave its go-ahead to mobile trading in August 2010 but the share in the total cash market turnover is less than 1%.

“We have seen very encouraging growth in mobile trading. With more people adapting to smartphones and tablets and higher Internet penetration, investors and members have started seeing the benefits of trading on the move,’’ said an NSE spokesperson.

Market intermediaries say that while an increasing number of investors are embracing mobile trading apps, security is a major concern among users, that is affecting the pace of growth.

While brokerages have incorporated built-in checks in the applications, some say the system is yet to match the security levels of Internet trading.

According to HDFC Securities’ Dhru, however, the entire transaction moves through Secure Socket Tunnelling Protocol (SSTP) layer with 64-bit encryption and a two-factor authentication, which makes it quite secure.

Majumdar agreed that Internet trading platforms “are end-to-end secured with at least a 128-bit security level as on date”, but added that “(this) level of security has not been attained on the popular Android or iOS platforms”.

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