Investors vie for shares of stock exchanges

Pick-up in sentiment, volumes boost bourses' unlisted shares

Dealers in shares of unlisted companies are seeing increased demand for the shares of BSE and the National Stock Exchange (NSE), owing to the bullish market sentiment and rising stock exchange volumes.

Those dealing in unlisted shares said exchanges represented a monopoly business, with only two players in India accounting for all the equity trading volumes. Besides, the current bullish trend means more people are trading on stock exchanges. Through the last financial year, average daily volumes have risen about a third, while cash market volumes have increased more than 60 per cent.

So far this financial year, average daily turnover on stock exchanges has risen 30.14 per cent — it stands at Rs 2.72 lakh crore so far in FY14, against Rs 2.09 lakh crore in FY13. Cash market volumes have risen 60.36 per cent. During the same period, average daily cash market transactions have risen from Rs 13,214 crore to Rs 21,190 crore.

This has resulted in more demand for shares in exchanges. Since these companies cannot be bought and sold through a trading platform, orders are executed by brokers specialising in such transactions. Such brokers connect buyers to sellers, taking a commission on the deal. “The sentiment has improved and there is increased trading volume. Accordingly, share prices have risen,” said Sandip Ginodia of Abhishek Securities, a Kolkata-based dealer in unlisted shares.

Shares of exchanges tended to do well when markets were headed higher, said Niraj Kajaria, owner of Kajaria Securities & Finance, another such dealer.

Shares of BSE are trading at Rs 201.5, according to the average of ‘buy’ and ‘sell’ prices from two sources dealing in unlisted shares. While BSE had a buy range of Rs 190-195, the sell price was pegged at Rs 210. This marks a slight gain compared to the last quarter, when rate in the unlisted shares market was said to be less than Rs 200.

Rates for NSE shares weren’t readily available. A dealer pegged the buy rate for NSE shares at Rs 3,000 and the sell rate at Rs 5,000. This is in line with the last deal executed — at Rs 4,200 a share.

BSE and NSE didn’t reply to emails seeking comment.