Keen to woo a new class of young retail investors, a dozen brokers are gearing up to launch Facebook apps that will allow clients to execute stock trades on the BSE platform from the familiar comfort of their Facebook accounts. 

Kerala-based retail brokerage Geojit BNP ParibasBSE -0.22 % will be the first to launch such a stock trading app later this week. At least 10 more stock brokers are in the process of launching similar custom apps allowing their clients to trade via Facebook, BSE Chief Executive and MD AshishChauhan said. CJ George, MD of Geojit BNP Paribas, said, "Facebook is the perfect platform to attract young investors and to educate them on stock markets." 

Stocks as an investment class can capture the imagination of younger investors if social media is harnessed well, brokers believe. Social media also naturally facilitates free flow of information and can sustain interest in the asset class. "FB integration gives both amateur and expert traders similar ability to 'like' a stock and thereby stay tuned on its latest developments, as well as to see which stocks your friends 'like'," George added. As the trade-where-you-wantwhen-you-want fad catches up, apps in the US are already offering real-time stock quotes, charts, community discussions and trading on Facebook. 

"This will be a novel experience for Indian retail clients and will promote investment culture," A Balakrishnan, Geojit's chief technology officer, said. "The security and risk management are robust as trade orders would be compact and pass via the brokerages' network and risk management." 

India has the largest base of Facebook users outside the US with over 43.5 million accounts.

Facebook also has a 53% share of the country's online population, according to Socialbakers, which collects a wide range of social media statistics. "It is natural for stock brokers to form strategies to gain from high use of social networking sites. The regulator will have no objection unless the technology is being misused," a senior official from the Securities & Exchange Board of India said. The number of retail investors in the equity market has gone down in the past couple of years, hurting business for brokers. 

Sebi may soon issue guidelines for the use of social networking sites like FB and Twitterfollowing the lead of its American counterpart, the Securities Exchange Commission. On April 2, SEC issued rules on use of social media by companies for disseminating non-public material information. 

There is some anecdotal evidence to suggest young investors may take to stock trading on Facebook. Mumbai-based Angel Broking has 15,000 users on a Facebook app for a virtual stock trading game. Many are first timers with little knowledge of stocks. Vinay Agarwal, executive director at Angel Broking, said, "We may soon unveil our full-fledged trading app on Facebook." (Economic Times)