India moves into mobile phone shares trading

Millions of Indian investors will be able to trade shares using their mobile phones after the South Asian nation approved the move and the Bombay Stock Exchange unveiled plans for the service.

Trading on mobile phones is catching on globally, especially in Asia, where mobile phone penetration is growing rapidly.

Interactive Brokers, one of the largest US-based brokers, launched trading on mobile devices in 2002, including in the US and Britain.

But the phenomenon’s arrival in India is a sign that Asia is taking the lead in opening up the capital markets to the masses.

Mobile phone trading has made inroads in Japan and South Korea, where the local stock exchange says it accounts for 3 per cent of trading volume.

Madhu Kannan, chief executive of the Bombay exchange, said on Friday it had received approval from the Securities and Exchange Board of India (Sebi), the market regulator, for internet-based trading via mobile handset.

“We’ll be launching very soon,” he told the Financial Times. “This is something very core to our technology focused strategy. We’re trying to bring more people close to the market.

“It has the ability to significantly advance the concept of financial inclusion and the penetration of capital markets throughout the entire country,” Mr Kannan said.

Vinay Agrawal, executive director at Angel Broking, said that Sebi’s approval of mobile trading would have a significant impact on his business “because mobile penetration around the country is very high.”

India is the world’s fastest growing large mobile market by user numbers and the upcoming introduction of third-generation cellular services could make it easier for investors to access the markets.

The country’s subscriber base was 652.4m users as of the end of July, with 17m users added that month alone, according to the Telecom Regulatory Authority of India.

The National Stock Exchange, India’s biggest exchange, is also expected to receive Sebi’s approval for mobile phone trading and has lined up about 800 brokerage houses to launch its wireless facility.

In South Korea mobile phone share trading is growing as more people use smartphones to trade stocks. But the portion is still small as smartphones were introduced in Korea relatively late with the adoption of the iPhone late last year.

Mobile phone trading amounted to Won5,619bn as of March, according to Korea Exchange. The industry predicts that the current 3 per cent share of all trading done by mobile phone could rise to around 10 per cent in a couple of years.

Most retail, or individual, investors still prefer trading at home on their personal computers.

Gerald Perez, London-based managing director at Interactive Brokers, said his company planned to offer mobile phone trading India shortly. In September last year it launched iPhone and Blackberry apps to allow customers to log into their account and non-customers to view free stock, option, futures and forex quotes around the world. “I think growth is pretty good especially in Asia, everyone has mobile phones and everyone is on the go,” he said.