The rise of "Retail Investor"
A multitude of data highlights that the participation of non institutional investors (and/or traders) in the Indian equity market has increased significantly in past few months. Many market observers have commented that it may in fact be a global phenomenon. Since, I do not have access to adequate authentic information about the global equity markets; I would restrict myself to Indian markets here. As per the data available till last week, the share of non institutional volume on NSE has increased from 44.75% in February to 74.56% in July. In this period, the average daily market volume has increased from Rs51227cr to Rs59844; whereas the non institutional daily average volumes has almost doubled from Rs229bn to Rs446bn. This is unprecedented and surpasses both bubble markets (1999-2000 and 2007-2008). Unlike the previous two episodes of bubble formation in markets, this rise in non institutional participation has coincided with sharp fall in the flows to mut...