How m.Stock is Disrupting Stock Market

INTRODUCTION

Hey everyone, post Covid we saw huge bull run in Indian stock market. However, the stock market has been very volatile in the last few months. Now, I'm sure a lot of new investors have started their investment journey post covid, and this market is really testing the patient's level of retail investors, especially now that the US economy is expecting mild recession.

There's a lot of uncertainty in the Indian stock market as well. So, what can we expect from Indian stock market in both short term and long? Well, I got a chance to interact personally and ask this question to Director and Chief Business Officer of Mira Asset Capital Market, Mr. Arun Chaudhry. Mr. Arun has over 14 years of experience in broking industry, so I utilized this opportunity to understand his viewpoint on Indian stock market for both short term and long term.

In fact, he even discussed two specific sectors that are looking interesting for wealth creation and there is a lot more interesting conversation around this viewpoint on broking industry in India than newly launched m.Stock platform by Mariah and some of the common mistakes that retail investors should avoid.

So let me share some of the snippets of my interaction with Mr. Arun Chaudhry. So, thank you Mr. Arun for joining us today. My first question is that since the covid, lockdown happened, there's a huge bull runs we have seen in the market but off late in last one year. It has been a very bumpy ride. Now, a lot of new investors have started their investment journey, so, um, and the fact that, uh, the US economy is looking is not looking in great shape.

Maybe they're expecting some sort of recession. So, considering all this, where do you see Indian market in the short term as well as in the long term? So, Sahil I totally agree with you that last about four to six months have been a little bumpy, but if you look at the period a little larger that means covid and beyond.

I think the markets went through a very unprecedented kind of a bull run. So, we saw a return, which was an excess of almost about 140%. We saw it running from close to about 7,500, touching the highs of 18,600 plus. So, I think from the level stand point itself I think what has happened over the last three to four months specifically, in addition to the other factors that I believe this is more of a relief, which is important for the market to have, having seen such a huge bull run. Now, if you look at the larger market perspective, also there are a couple of things which have been bothering the market off late, whether it is the Russia, Ukraine War, which has got its own impact on the supply side, specifically on oil or we saw the inflation again going through a very uncomfortable kind off a number or even the high interest rates.

Now what has happened is if you look at all these factors put together, the money itself has become expensive. That's one. Second is the supply side issues, which is happened from China, which was due to Omicron, or you, you saw the same thing in Indonesia or from Russia, has actually piled on to ensure that the input costs of a lot of companies have risen.

Although when you look at the other side of the corporate story, the way we had, we had seen the companies giving the commentaries post their results. I think the large part of the worries behind us, but if I have to comment on the short term period, I would suggest that there is still some amount of caution to be had over the next one quarter before we can say that the larger of these elements that I just spoke of is completely behind us.

Because what we are also seeing is the government, the central banks reacting, and of course it's a very necessary reaction. But that is giving jitters to the economy and to the audience who are investing. So, on a macro level, I think on a longer term perspective, the equity market stories completely intact, we believe that people who started their investment journeys during the Covid period have actually seen the kind of returns that I think I have not seen in my 15, 18 years of journey being in the markets.

So, the message for the new listers has started, their journey is to stay there and the long term prospects are really bright - Absolutely, now if we go sector specific, what according to you are a few sectors that are looking very promising for wealth creation. So, there are a couple of sectors that we are very bullish on. Of course, as the economy turns towards the positive side. Although the market is looking very bullish even today. But if you look at banking as a space, we believe that banking as a space is got a lot of potential. IT, again, the, the story of it is completely. And I feel these two sectors, since they also hold a very a big weightage in the index itself are going to be two very important sectors to watch out for.

And in a longer term, I'm sure if the investors are selecting the right kind of businesses to invest in, they're going to be making a lot of money in the long term. Right. So especially in the IT sector, if you see a lot of investors are getting worried because of what has happened in last few months. So, if we take your opinion, it should create an opportunity to identify those quality coming IT sector and utilize this opportunity to invest in those companies, right? Absolutely correct, in fact we've seen unprecedented kind of a fall, if you notice, over the last four to six months, which is what we are classifying as the bumpy period in the stock market.

But as you very rightly said, this is actually creating excellent investment opportunities. The only word of caution that I would want to leave to the listeners and the viewers is that please be very selective in the kind of businesses you choose, because as we know that being in the best of sectors, but in bad businesses will give you bad results.

And same way being in good companies, even at the rough times is going to ensure that you sail through it very comfortably. Right. So, the takeaways, the two sectors that you are looking very are, that according to you are looking very promising, are banking and IT sector. Exactly right!

Now, the next question is regarding the brokerage industry in India. So over the last few years, we have seen a transformation in brokerage industry. I remember a few years ago this brokerage industry was all about perfect legged model. But then we saw a change in business models, there we saw flat cost per transaction, and now you have introduced m.Stock by Mirae Asset which is literally zero brokerage could you throw some light on the business model of in stock? And are you expecting another transformation? Literally a revolution with this new a new brokerage company that we have introduced. So, we would love to believe, and I think the numbers that we've been able to do over the last now just two days over five months of our existence are telling us that we are trying to look at a disruption sorts.

But, I totally agree that the broken industry as such, has gone through a lot of change. In fact, that change was very clearly evident over the two years of Covid, and I think this was one of the big exceptions in terms of the industry, which enjoyed a very different bull run during the Covid period.

Now, having said that, let me draw an analogy to the telecom sector. I remember just going back about 15, 16 years when my father bought the first phone, the outgoing calls used to be about 60 rupees, and the incoming used to be 32 rupees. Then the time came very soon after that, that the incoming, became free and only outgoing was.

Today, if you look at the largest of the telecom companies in India, the, the revenue model has completely shifted from the calls to data. And I think this is a similar kind of trend that you notice in the broken industry today as well See the, the orientation that used to happen at a time when my father used to trade was that the information sufficiency was not there. The lot of reliance used to be on the brokers and hence the services of the brokers were that much more critical. Now, with technology ensuring that the landscape of broken itself is changing. We saw how discount brokers merged from the 11th of April we tried to enter the market and the basis of the thought that we had in our mind that we want to give complete financial freedom to the investors. We launched this completely new segment, to the market, which is what you rightly refer to as zero broking. And I think as I was talking to you, the numbers over the last five months, we've done 7 million trades. We've been able to execute 12,000+ Cr. Turnover, and 70% of the clients that we've acquired are active, speaks in the direction that we are looking at a very positive influence on the investor community.

So certainly, there's a lot of buzz around, this new platform. And, one question that a lot of people are asking me around m.Stock’s demat account charges pricing. So, honestly, it is really difficult for people to digest the fact that all the transactions are literally free. So, it could just clarify, is it a sort of one-time introductory offer or the price will increase in the future? could it just clarify that? So, Sahil, let me thank you first for asking this and giving me this platform to clarify the pricing. See, I believe any disruption starts with first disbelief, and we are taking it very, very positively that people are in disbelief that a company can approach the stock market and state that their pricing will be completely zero. Right. So now let me answer the question that the pricing that we offer, although I'll explain it very quickly, also in brief so that users have an understanding of what we charge.

Pricing that we offer is not an introductory offer of any sorts. That's the pricing that we will carry on till the time the platform is alive. And I, and I wish hundreds of years of success to Mirae asset and in m.Stock. Second is that the pricing comes without any hidden charges. Now we've got almost about 30,000+ customers on our platform who have been using our platform for the last five months, and we time in here, hear it from them saying that we are now in firm belief that Mirae is going to stand with the brand it carries, which is across 15 countries.

And the pricing will remain as is. And I want to use this platform to state that there will be no hidden charges. The charges which are given to the customers, which are actually available in black and white on our website called m stock.com. So, I would encourage the users to view it on the pricing page also is absolutely the only charge that we have.

It's not that after 3 months we will get back to the pricing that we are thought of if is an introductory offer or it's only the front end visibility that people are getting in terms of the charges. But at the back end we are charging anything extra. We've also, we are also going ahead and publishing live contract notes of the users who've been with us, of course, with their permission so that people can actually have that visibility from the contract mode, which is a published paper through the exchanges, which we do on behalf of the exchanges, and people are able to understand that practically. It is absolutely zero.

Now, also, very quickly, I want to highlight the prices. We, we offer two price points to the customers to enjoy through m.Stock. One, of course is a flagship offering, which is the Rs. 999 brokerage free account. What happens is you pay Rs. 999 + the payment partner fees, which is addition to Rs 999, which is about 2.5%, and of course the GST, which is about 18%, and you make your account completely free from any brokerage across all products.

So, whether it's intraday, futures, options, currencies, it's completely free. Second is the Rs. 149 option where there are a lot of people who came to a saying that I want to try it out and then I want to upgrade. So people open their account with Rs. 149 in this account also, your delivery, your IPOs, your mutual fund, which we are launching very soon, will continue to be free for life, and all of the products are charged at least 20 per executed order.

But let me also tell you, at this point in time that almost about 70% of our customers who opened an account with Rs. 149 have already upgraded to the Rs. 999 which again is a testimony to the fact that they believe in our services and they believe that m.Stock will be able to create a difference in the line.

The second part of our pricing, which again surprised a lot of users, is the annual maintenance pack that we offer. So, for example, if a customer has chosen either Rs. 149 or Rs. 999 and wants to have his Demat, which is what we control on behalf of the customer, made free for life, all he needs to do is give one more 999.

Along with the taxes that I told you and make this account completely free. So now practically a 999 for broking plus a 999 for Demat account is going to give you that super powerful platform, which is absolutely free for any charges that we will charge from the customer for our services. There's nothing beyond that.

All of the charges that I mentioned to you, I'm just repeating, that's available on m.Stock. So, anyone who wants to have any clarity, we've tried to ensure everything is mentioned in black and white in terms of what we charge. So, from pricing point of view, I think this is really a disruptive model and with that, I think, uh, there is going to be a really bright future prospect for m.Stock.

Now, our next question is regarding the technology. So again, when it comes to brokerage platform, one very important factor and parameter is the tech technology. Everyone want a very stable platform. So, could you throw some light on the technology print? How stable is the platform and what are the kind of target audience you are looking?

So I, again, agree with you and I couldn't agree more on this side, that technology, is a very, very important factor. In fact, that is something which, we value the most in addition to the customer service that we offer to our clients. In fact, there is a disproportionate amount of focus, whether it is in terms of the funds that we spend on technology or the resources that we have in technology goes from m.Stock towards creating a unbelievable experience for our clients. What also benefits us is the experience that Mirae asset gathers from 15 countries. That is where we are present now for more than 25 years. We are able to ensure that the expertise from these 15 countries to create a platform which is very seamless.

To create a platform which is available through the latest technology. I would also like to mention about the fact that not only in India, but also in other countries where we have our branches, where we have our offices, is where we start. We have started using our technology expertise from, so it's not only the Indian engineers that work with us to develop our technology, but a lot of people in terms of strategy, in terms of an understanding of better technology to be used.

Is the kind of knowledge sharing that we get, available to us, which is what we are trying to bring into our platforms. Now, end of the day, we are talking about, an animal which is untamed. It's not that I would want to say on this platform that I am a hundred percent, issue free. We've had our challenges in the past. But what I wanted to ensure, and comment through your platform is that we've taken N-number of steps and N-number of monitoring mechanisms to ensure that it's only that we're growing from step to step. We've had a couple of bad days, but it's been far and few. It's only been the teething time that, we had launched this in and now I'm very happy to comment we are able to offer, unmatched technology experience to our customers. And I think, as I told you earlier, the numbers that we have, which is 7 million trades and the turnover that we've been able to execute on our platform states that people are also appreciating the kind of orientation that we are getting towards technology.

That's one second important thing that I also want to highlight is that it's not that we are trying to create a technology which is inside. It's, we don't decide what to be made sitting in fancy boardrooms. I'm proud to tell you that we've connected with thousands of customers. I have myself through my email or calls connected with more than thousand customers itself to understand what is it that the customers require from us.

And in fact, in the last two months, there have been more than 15 feature leases that we've tried to do, which have been very focused in terms of what our customers require. We don't have a defined wishlist basis which we develop, we speak to our customers. There are multiple chances of communications that's open.

Customers have access to me directly when they want to write to me and they openly write to me. And I want to through a platform. Again, thank a lot of customers who've written to me, given us the guidance of what they feel is important. And we've tried to only follow this path that our customers will ensure.

They guide us and we are here to ensure that we build the products which are required by the customers to best of technologies. And that's how we've tried to grow over the last, five months now.

Right. So, Mr. Arun I have one final question before we close this session. Since, the last couple of years, I think a lot of new investors have started their journey, but then, they make a lot of mistakes. So based out of your experience, I want to understand what are those common two, three mistakes, that you think retail investors make and they should avoid in stock market? So this is a difficult one, actually Sahil so I won't call the stakes that the investors make but typically this market itself is very emotional when it comes to investing.

So, I think the first thing that I would suggest the listeners to do is to keep emotions and investing a little separate. I think that's not a mistake, but an orientation that we would suggest that people build over time that's one.

In terms of what they can avoid is, number one is that we've noticed a lot of people mix the concept of trading and investment. So trading, how I define trading is if any stock is being taken with the perspective to be kept only for a couple of days or weeks. Whereas investing is something where you actually add a company to a portfolio with a vision of a longer, period. It could be a couple of months or years, but we've often noticed that people take a stock for trading with a couple of weeks view, but then when the, the orientation does not go there, where they will keep this company with them for a very long period, they treat it as an investment.

So please don't mix trading and investment, it might be very harmful. Second is, that eagerness to make money is there. So, we notice that a lot of people want to make quick money, and that is where I believe a lot of investors will have to keep their patients. We recommend that people choose good companies.

We recommend people to choose good businesses and then stay with them for a longer period of time. See, the magic of wealth creation does not happen in days. I'm sure everyone would've read the stories of, if I would've bought a Wipro in 1992, how much wealth I would've created. But then if you really look at number of people who would've kept Wipro for such a long period, I would be in 99% surity saying that, I don't think we'll find even one.

Right? So, the wealth is created in this market, and it will eventually be created over the next 10 to 15 years. Also extensively, but I would recommend your listeners to be patient, to choose carefully and then stay with the businesses for a long time and giving them chance enough to make money in their portfolios.

The last thing that I would want to recommend through your platform is please also choose your advisors very carefully. Where are you taking your advice from? Where do you read your material? There is a lot of information which is being shared online through which people try and take their trades, although it becomes very dangerous.

Because we really don't know the kind of basics or the fundamentals through which these stocks are being recommended. So, my personal advice would be that you look at trusted sources of information when you're investing and when you are looking at these sources, please ensure that you're also looking at very, very stable platforms or companies that you can associate with when it comes to money. And I think that's one more very important thing because I think stock market as an instrument can be used to make a lot of money. But I think patience is the virtue here. So, yeah, patience is the virtue.

That's the message from Mr. Arun Thank you so much Mr. Arun for sharing your knowledge with us. I'm sure it'll help a lot of people who are watching this video and really appreciate your time. Thank you, Sahil Thank you so much.

So clearly Mr. Arun is optimistic about India's good journey in the long term, although for the short term he's saying that be cautious for the next one. And two sectors to watch out for are banking and IT. He also discussed the disruption in broken industry and how m.Stock is trying to disrupt this industry with its unique pricing model. If you want to explore m.Stock by Mirae Asset Capital Markets, you can visit the website https://www.mstock.com/

And finally, he also covers some of the common mistakes to avoid in stock market. One of the take aways is to keep investment and sentiments. And choose quality business and stick with them for a longer period because patience is the key.

Thanks for watching this video. I'll see you next video.

Till then, take care.

Investments in securities markets are subject to market risks. Read all the related documents carefully before investing.