Average ticket size drops, but sales of paper gold remain healthy compared to physical sales of the yellow metal.
The auspicious occasion of Akshaya Tritiya saw investors snapping up gold ETFs. Total turnover on the NSE was Rs 608 crore, compared to Rs 423.05 crore last year. On BSE, trade volumes stood at Rs 140 crore, an increase of 58% over the previous year.
Sales of physical gold were down. Reports indicate that 10 tonnes were sold yesterday on Akshaya Tritiya, compared to the 20 tonnes sold last year. High prices, import duty hike, the falling currency and the jewellers’ strike have all contributed to the fall in demand.
On the other hand, the MF industry witnessed huge demand this year but at a lower ticket size. The high price of the yellow metal kept a number of investors from going in for bigger purchases, say industry experts.
Gold ETFs from almost all AMCs were on a roll. The NAV of 12 of the 14 gold ETFs in operation hit 52-week highs, reflecting the popularity of paper gold among Akshaya Tritiya gold buyers.
“Transaction in gold ETFs and fund-of-funds was up by 35% compared to last year. However, the average ticket size was lower this year due to high price of gold. We got almost 30,000 applications for paper gold,” says Himanshu Vypak, Deputy CEO, Reliance Mutual Fund.
“Gold intraday transactions were decent but most investors avoided delivery due to the high price of gold,” said Sarath Sarma, Executive Director and Head-Sales at IDBI Asset Management.
IFAs also observed better demand for paper gold compared to physical gold this year. In fact, a few IFAs had tied up with jewellers; others rolled out campaigns through SMS and special marketing material.
“I feel my approach of tying up with jewellers has paid off. I received 60 applications for investment in gold fund-of-funds yesterday,” says Ritesh Sheth, a Mumbai-based IFA.
“We observed a huge demand for gold ETFs yesterday. All of my clients preferred lump-sum investments in paper gold compared to SIPs,” says Ganesh Shanbhag, an IFA from Mumbai.
Demand was good even in southern India, where Akshaya Tritiya is not very popular.
“We submitted around 70 gold ETF applications yesterday and I feel that the demand for paper gold was better this year compared to last year,” says V Kashinathan, an IFA from Salem, Tamil Nadu.
