The drastic fall in the number of investors has not only led to the fall in the daily transactions but has also slowed down the expansion plans of the stock broking houses.
While some of the national broking houses have slowed their expansion others have revealed that although the uncertainty has led to the decrease in transactions this can not stop their physical expansion, as the market is expected to be volatile.
The region comprising Punjab, Haryana and Himachal Pradesh has approximately 6-7 lakh demat account holders, and the region is also also considered as one with immense potential. According to experts the northern market is no longer the same, there is a huge activity going on even in small districts.
Not only the brokers with national repute have strengthened their presence by opening new branches, but the regional brokers have also joined the bandwagon by setting up new branches in small towns. Further, the presence of a large number of NRIs, commodity traders, landlords, people with high disposable income along with individuals with high net worth makes it an immense opportunity market.
The situation is not the same for the brokers now. Speaking to Business Standard, V Kumar of Vikson Finance & Investments (P) ltd, said, "Due to uncertainty, the transaction has decreased drastically. The investors are staying away from the market due to the uncertainty in the market. The current situation has compelled us to rethink on our branch network expansion plans. We had a plan to open 5-6 branches in Punjab and Haryana but has put it on hold now.
Echoing similar sentiments, Gurmeet Chawla, director, Ludhiana-based Master Trust Ltd, one of the largest regional broking house said, "The business is down by almost 30-40 per cent. We are also expanding our branch network but we are moving slowly in a conservative way."
Master Trust has about 40 branches in the region. Similar are the views of officials of the Chandigarh-based Competent Finman (P) Ltd.
"We also have put our physical branch expansion on hold owing to market conditions and negative investor sentiments. We are planning to emphasise more on internet trading, as it leads to lesser operating cost as compared with physical branches," Bikramjeet Singh, director, Sterling Finman(P) Ltd, said.
Analysts feel that the smaller broking house has always under pressure to perform due to low capital base but on the hand sources in large broking house revealed that there is hardly any impact on their expansion plans and disclosed that this is the right time to train manpower.
