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Young investors bullish on blue chip shares

YOUNG UPWARDLY mobile Lucknowites have been on a buying spree for shares of blue-chip companies at bargain prices amidst the bloodbath in the Indian bourses.

india Updated: May 21, 2006 00:17 IST

YOUNG UPWARDLY mobile Lucknowites have been on a buying spree for shares of blue-chip companies at bargain prices amidst the bloodbath in the Indian bourses.

As the BSE Sensex went down 826 points on Thursday, the only investors rejoicing in the city were young corporate executives who found the right opportunity to enter a highly depressed market. The online usage data of  a premier broking house indicated that a flood of these young executives got online in the city during the past two days and seized the opportunity to pick up shares of blue-chip companies.

However, Sushil Kanodia, the President of UP Stock Brokers’ Association in Kanpur cautions: “The investors must adopt a ‘wait and watch’ policy. The Indian stock market would take another fortnight to bounce back”.

He said investors must also be wary about any financing proposals made by brokers to buy shares in a depressed market. “Those who got nearly 75 per cent of the financing done by brokers to buy shares are repenting their decisions after the sensex crashed,” he said.

Mradul Verma, Regional Head of  Sharekhan, the retail broking arm of  Mumbai-based company, in Lucknow disagrees that investors must not buy shares at all in the present scenario. “ Small investors should pick up shares of the blue-chip companies in a and hold them for three years. The markets would rebound soon and there would not be another opportunity to buy shares of blue-chip companies for a long time,” he said.

Verma said most small investors in Lucknow who have opened their online accounts with various broking houses in the city are in the age group of 30 to 40 years—an age when future financial planning becomes imperative for most youngsters. “Most youngsters, I believe, have seen this crisis as an opportunity and not as a disaster for fulfilling their financial dreams,” he said.

As an investor’s age advances from 40 to 50 years, the online usage for purchasing or selling shares witnessed by us is less compared to those in the 30 to 40 year age group. Those above the age of 50 years were found to be happy placing their orders on telephone or visiting a broking house to buy or sell shares, Verma said.

There are an estimated 20,000 online accounts of investors in the city with various online brokers in the city out of which a majority of the accounts are operated by youngsters with large disposable incomes, he said.

“The fact remains that the 30 to 40 year age group is extremely IT savvy and understand market dynamics perfectly well as witnessed from the daily data of buy and sell orders of  shares by  young investors from Lucknow”, Verma added.