INSUBCONTINENT EXCLUSIVE:
The coronavirus crisis and the national lockdown announced by Prime Minister Narendra Modi on March 24 have brought to the fore the digital
have faced the brunt of the lockdown, have asked for equity and commodity markets to be closed, new-age brokerages that have a fully online
business model and a young clientele have seen business grow by leaps and bounds.
Apart from essential services like food, vegetables
healthcare and media, the banks and the equity, commodities and bond markets in India are also operational during the lockdown, while most
other commercial and manufacturing activities have been shut for 21-day period.
The first problem for brokers have been getting to work, as
the policemen on the streets have not been given clear instructions on allowing them to travel
Vijay Bhushan, president of the Association of National Stock Exchange Members of India, said in an interview with The TheIndianSubcontinent
that many members of ANMI have complained of harassment by the police in Delhi, and his own staff members have been slapped on the way to
essential service is better understood by policemen than financial markets
But even that did not cut ice with some policemen on Wednesday, Bhushan said
25, asking it to close down the markets during the lockdown
Apart from brokers, stock exchange officials in Kolkata too faced commuting problems with the policemen, an official of Calcutta Stock
Exchange said.
Commodity traders face a different kind of problem, apart from the harassment
While the spot markets for agri-commodities are closed, the futures markets for commodities are open on commodity bourses
Narinder Wadhwa, the president of the Commodity Participants Association of India, explained how prices of chaana (gram) have shot up on the
futures markets, while there is no spot trade happening
discount brokerages like Zerodha or Upstox that seem to have made the most of the predicament of the smaller mom and pop brokerages
Upstox is set to report a 35% jump in new demat accounts opening for the Jan-March 2020 quarter, compared to October-December 2019
December 2019 was its best month ever when it had opened one lakh new demat accounts
Also number of orders in March has been 55% higher than February, said Ravi Kumar, co-founder of Upstox.
Kumar explained that as people
found it difficult to operate through their usual brokers due to the lockdown and yet wanted to pick up cheap stocks as the indices plunged,
enrolment of pure-play digital platforms like Upstox jumped
brokerage houses that do both physical as well as digital, batted for keeping markets open
Lav Chaturvedi, CEO of Reliance Securities said that India has the best technology stack when it comes to digital markets consumers and the
markets should continue as usual.
While access is one part of the problem, the lockdown has created other issues too
Quant and Algo-based trader Subhadip Nandy says the absence of volumes in the market is fairly notable
Something similar happened with Piramal
indicate something is broken in the markets
He further shared how while trading on ATM options he saw rapidly moving prices flashing on his screen
This anomalies indicates the algos have been switched off as brokers are sitting at home, unable or unwilling to go to work
bonds market is seeing a different problem as its participants are not as sophisticated as the equities market or the participants in terms
of having backup strategies ready
Add to that aggressive selling of G-secs by foreign institutional investors, liquidity has dried up and corporate bonds are trading at weird
markets can be an option only if New York Stock Exchange and London Stock Exchange both close
