Chandigarh turns to markets

Falling interest rates in bank FDs has caused the shift towards mutual funds

Chandigarh, better known as 'City Beautiful', is fast coming up as the centre for trading in financial markets in the north.

The city ranks sixth in terms of the volume of transactions in the stock markets in India. All prominent brokers like India Bulls, Karvy, fivepaisa.com, Parsuram Puria, Kotak, Master Capital and Consortium have opened shop in the city.

A business of about Rs 800 crore is done every day in Chandigarh-Mohali-Panchkula, with the help of about 300 terminals. About 80 per cent of the business is transacted on a speculative basis and 20 per cent on a delivery basis.

A leading stock broker told Business Standard that Chandigarh was ahead even of Ludhiana in terms of trading in the stock exchange because the city had more white-collar workers. There are advocates, doctors, teachers, bureaucrats, and other professionally qualified persons participating regularly in the share market.

Moreover, falling interest rates in fixed deposits in banks had prompted people to move to mutual funds, he added. He said there was no demand for a stock exchange in the city as most of the trade was done online.

The city witnessed a boom in 1992 and 2000 during the bull runs led by Harshad Mehta and Ketan Parekh. But that was short-lived.

For the past year and a half, the city has seen the longest phase of favourable market conditions and that was likely to sustain, said a broker. Investors in the city say the market is more transparent and driven more by fundamentals now. So there is no fear of a scam, they feel.

However, brokers say there is less awareness of GDRs (global depository receipts) and foreign multinationals among the people here. And, there is a great rush for bank public offers and a lot of enquiries are coming for the foreign mutual funds that are likely to hit the market very shortly.

Young professionals from the corporate sector and students are the latest entrants in the stock market in Chandigarh.

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Playing the markets

• The city ranks sixth in terms of the volume of transactions in the stock markets in India
• Prominent brokers like India Bulls, Kotak and Master Capital have opened shop here
• Business of about Rs 800 crore is done every day in Chandigarh-Mohali-Panchkulae
• About 80 per cent of the business is done on a speculative basis and 20 per cent on a delivery basis