Demat Accounts Growth Slows in October 2024
In October 2024, the growth of demat accounts in India saw a decline, according to a report by ICICI Securities. After four months of adding over 4 million accounts monthly, October’s additions fell to 3.45 million from 4.36 million in September. This suggests a shift in investor sentiment or market conditions.
CDSL’s Market Share
The Central Depository Services Limited (CDSL) maintained a strong market share, with 79% of total and 90% of incremental demat accounts in October 2024.
Investor Activity Trends
In September 2024, individual investor activity showed mixed trends. The number of investors trading in the National Stock Exchange (NSE)’s cash market increased slightly to 15.8 million, a 1.9% rise from August. However, participation in the equity derivatives segment decreased by 3.6%, with 4.46 million investors trading in September compared to 4.66 million in August.
For the first half of FY24, 29.4 million individuals participated in the cash market, while 8.7 million engaged in the derivatives market, indicating a reduced interest in derivatives trading.
Market Outlook
The decline in new demat accounts and derivatives participation suggests a cautious outlook among retail investors, as global economic conditions remain uncertain and domestic markets face volatility due to foreign investor selling.
Doubts Revealed
Demat Accounts -: A demat account is like a bank account for holding shares and securities in electronic form. It makes buying, selling, and holding shares easy and safe.
Market Volatility -: Market volatility refers to the rapid and unpredictable changes in the prices of stocks and other financial assets. It can make investing risky because prices can go up or down quickly.
CDSL -: CDSL stands for Central Depository Services Limited. It is an organization in India that helps manage and store electronic records of shares and securities.
Equity Derivatives -: Equity derivatives are financial products whose value is based on the price of stocks. They are used by investors to hedge risks or speculate on stock price movements.
Retail Investors -: Retail investors are individual people who buy and sell stocks or other securities for their personal accounts, not for a company or organization.
Global Economic Uncertainties -: Global economic uncertainties refer to unpredictable changes in the world economy, like changes in trade policies, currency values, or economic growth rates, which can affect markets everywhere.
