Operators Make A Killing In Ibp Via Arbitrage

Price fluctuation at the IBP counter today on Calcutta, National and Bombay stock exchanges triggered arbitrage operations from operators.

The quotations of the exchanges revealed that a given point of time there was a price fluctuation of as high as Rs 42 between the Calcutta Stock Exchange (CSE)E and the Bombay Stock Exchange (BSE). The price difference was lower- Rs 37-between the National Stock Exchange and BSE. In fact, the price movement on CSE was in tandem with NSE but BSE differed from these two.

The arbitrage opportunity was higher between NSE and BSE compared with that between CSE and NSE. Reason: volumes on the CSE stood at only 557 compared with 2,32,328 on the NSE, while its was 90421 on the BSE.

The counter opened today at Rs 886.50 on the NSE, Rs 3 higher than CSE level. To begin with, the BSE quote was lower than these two at Rs 873.20. As trading continued, the quoted price on BSE exceeded that of NSE and CSE before settling at Rs 925, the day's high on BSE. The intra-day high on CSE and NSE was Rs 883 and Rs 888, respectively.

Towards the end of the day's trading, the BSE rates fell sharper than CSE. IBP counter closed at Rs 876.55, lower than CSE's Rs 878.35 but higher than NSE's Rs 875.5.

The price movement suggested that the arbitragers were busy buying IBP shares on CSE and NSE today and these were sold at a premium on the BSE.

Meanwhile, Indian Oil Corporation announced that it would go for the mandatory 20 per cent open offer for IBP shares following the acquisition of the government's 33 per cent stake. Priced at Rs 1551.10 a share, the rate at which the government's stake was acquired- the offer will remain open for a month from April 12.