Zerodha’s co-founder Nikhil Kamath attests to the fact that account opening activity has reduced in the stock market amid the economic slowdown. In a conversation with Udayan Mukherjee, Global Business Editor of Business Today, he said, “If account opening activity or traction in the market is a leading indicator, a lot of people have slowed down. Also, many people have incorrectly set expectations for themselves with respect to what has happened in the last couple of years.”
Kamath said that in the last couple of years, retail investors have seen obscene returns. The standard returns in the stock market are around 11 per cent per annum, he said. “I hope the retail investors adjust their goal post to this 11 per cent.”
He also said that retail investors should not expect the returns of the past to get replicated in the future.
Despite the trading activity slowing down, Kamath highlighted that the retail investors are not entirely disenchanted from the markets to the extent of “reducing equity exposure drastically.” He also weighed in on the Adani-Hindenburg controversy.
"Hindenburg is not doing this from the goodness of their heart to inform people better but because they have a short position on the stock," Kamath noted. He also said that whatever Hindenburg says, he would “take it with a certain amount of caution” because they are “bound to be biased.”
New York-based short seller Hindenburg Research released a report last week accusing Indian billionaire Gautam Adani of “pulling off the largest con in corporate history.” It accused Adani Group of stock manipulation, accounting fraud, among other things. This report led to a massive turmoil in the public markets.
The result was such that on Budget day, February 1, shares of Adani Enterprises crashed 34.72 per cent to hit a day low of Rs 1,942. The stock, moreover, is down over 49 per cent from its 52-week high of Rs 4,189.55.