The Hindu Business Line : Small software companies riding the market boom

IF you thought financial intermediaries such as stockbrokers are the only service providers doing superbly in these bullish markets, think again. Unseen by many, a small side story is unfolding rapidly in the realm of those who churn out what are popularly called "stock market tools" — market analysis software, online reports, charting data and the like.

For small-time software companies, a major business opportunity has been unleashed by traders, a growing community of people who are essentially in the market for ultra-quick gains. While no one can correctly estimate the combined size of this business, informed sources swear by its potential, especially in the context of the conditions now prevailing in India.

Their clients' penchant for trading smartly is also driving software personnel, many of them independent workers, to innovate on older, existing products, it is pointed out.

In all, the picture is not quite clear at the moment, with a few leading players claiming to supply original, well-known packages.

In a typical case, however, a service provider seeks to attract new clients by promising lots of extra inputs. Some are even advertising their wares by actually claiming to help clients identify good trading opportunities.

Charges vary, of course, depending on the kind of services that clients need. However, as sources indicate, the emergence of a lot of small, little-known companies has led to undercutting, as many of them tend to tap clients with prices that are lower than what bigger companies would have normally levied.

Albatross Software, for instance, is offering to provide key data at 4-30 p.m. covering daily, historical and intra-day information. The company puts out regular ads for reaching out to local investors.

Mr Vijay Kamani, stockbroker, points out that these services are "a natural corollary" to the current stock market sentiments. "The positive scenario is all pervasive. Obviously, it has a definite impact on the businesses of these solution providers," he notes.

Some players, such as the family-owned Viratech, are actively eyeing a larger share of the pie. It brings to the table data related to MCX and NCDEX, the two commodity exchanges, in addition to what it provides with respect to NSE and BSE. "Buoyant market conditions have led to greater interest in our services. Many more investors are now keen to use advanced tools to improve their returns", noted Mr D. K. Mohindar of Viratech.

Take also, for instance, Spider Software, a private limited company that is inter alia offering to "find stocks that are trying to turn around"; at the same time it is pushing what it calls `end of day' market analysis software too. Says Mr D. P. Poddar, veteran broker, "like all businesses, this too must be based on trust. A software firm that claims certain things must deliver in line with its promise". The reference is clearly to the need for user-friendly techniques which investors can leverage for maximum benefits.

The introduction of commodity trading is clearly being seen as a driver. Any progress recorded by the commodity bourses will find some reflection here too, as enterprising software companies are soon expected to come up with more packages.