Social networking more popular with online Indians than Market trading

Social networking more popular with online Indians than Market trading

According to a study by SMC Capitals, there are about 3.1 crore active users on social networking sites such as Facebook, Orkut and Twitter across the country, whereas the number of Demat account holders is just 1.7 crore.

In other words, the number of total social networking site users is twice that of the total Demat account holders, SMC Capitals equity head Jagannadham Thunuguntla said.

Demat accounts are mandatory for investors to trade in stocks in the country. "It is incredible, considering the fact that the social networking concept became popular only in the last three years," he said. Interestingly, a large number of Demat account holders are non-active investors and retail investors with flagging interest in public offers and mutual funds.

"The average Indian is still shying away from investing in the market and their shaking confidence needs to be stabilized," he further said. The study also points out that two crore new mobile connections are taken by Indians every month. However, the monthly increase in the number of Demat account holders is only two lakh, a hundred times lower.

This trend indicates the low level of penetration of the investing habit in India, Thunuguntla said. The lukewarm response to Demat accounts "shows that while the story of the India as a consumer has opened up, India's story as an investor is still under wraps," he added.

As much as 60 per cent of the country's population is below 30 years age, and this favourable demographic dynamism is being witnessed in the practice of social networking and new mobile additions, the study said. However, it should be noted that while opening an account on social networking sites is free of cost, an investor has to pay up to open a Demat account.