Women's participation in equity market grows during COVID-19
Women's participation in equity markets has surged during COVID-19 pandemic and experts believe the growing need to share household expenses with rampant pay cuts and lay-offs has brought them to trading, market participants said.
Additionally, women are looking for alternatives to the decreasing bank's fixed deposit (FD) rates, they added.
Interestingly, most of such women are first time investors and a large number of them are housewives.
"As retail participation has grown during the lockdown, this has been true for women as well. In line with the overall investors population, women are looking for alternatives to decreasing FD rates," said Shankar Vailaya, Director of Sharekhan by BNP Paribas.
"Lockdown has just been an accelerator allowing women to deepen their capital market knowledge via digital solutions," Vailaya added.
Online brokerage house Upstox said it has witnessed a growth of 32 percent in account opening by women from April to June 2020, compared to the preceding three months.
Of these, 70 percent of women are first time investors. Additionally, more than 35 percent of the brokerage house's women customers are housewives.
Ravi Kumar, co-founder and CEO, Upstox said, "the increased need for sharing household expenses with rampant pay cuts and lay-offs is what seems to have brought more women into trading".
"Also, factors like rising gold prices and low returns on bank's fixed deposits and real-estate investments have driven the growing trend of moving savings from physical to financial assets," he said.
He added that the attractive valuations since late March have also led to an increasing number of women investors participating in the equity markets.
According to Upstox, around 74 percent of female customers are from Tier 2 and Tier 3 cities like Visakhapatnam, Jaipur, Surat, Ranga Reddy, Nagpur, Nashik, Guntur, among others.
Out of the overall number of active female customers, 55 percent are traders, whereas 45 percent are investors (those that invest in equity delivery).
It has seen a jump in active female customers by 53 percent from April to June 2020, as compared to preceding three months.
Nikhil Kamath, who co-founded Zerodha and True Beacon, said they have added 11 lakh clients since March 1, 2020. Of these, women clients are 1.8 lakh.
He further said the average age of such women is 33 years.
Tejas Khoday, co-founder and CEO, of FYERS, said in the last four months the stock broking fintech startup acquired over 20,000 new customers, of which 10 percent were women traders.
But, the overall traffic online includes 15 20 percent women traders. Moreover, they are more inclined to invest than trade.
In terms of expectations, Khoday said women want high profits in a very short period of time without too many entry/exits. But this could also be because most of them are first-time investors.
Prakarsh Gagdani, CEO, 5paisa.com said women investors have started actively managing their money and are quite successful at it. Earlier, most of them would avoid stocks but now with simple technology and access to knowledge about markets, they are at the tipping point.
"I believe in a year or two their representation in the stock market would be significant," he added.