Street sign: Arbitrage gains on CPSE ETF

Index inclusion hopes for ICICI Prudential Life; Sebi may soon get a new member

The five-per cent discount on the second tranche of the Central Public Sector Enterprises’ Exchange-Traded Fund (CPSE ETF)  has been used by smart investors to pocket arbitrage gains, according to market players. Three different arbitrage strategies were used by investors — existing investors of the CPSE ETF sold their units and applied in the further fund offer (FFO); some investors shorted the CPSE ETF index futures and applied in the FFO; the more savvy investors sold the underlying 10 shares of the ETF and applied in the FFO. Given that the ETF was subscribed only around two times, the arbitrage bets could yield gains, say market players.

Pavan Burugula

Index inclusion hopes for ICICI Prudential Life

Market players are hoping that ICICI Prudential Life Insurance Corporation could soon be included in the benchmark Nifty 50 index. The market capitalisation of the life insurer has crossed the Rs 50,000-crore mark, thanks to a 12 per cent rally last week. Also, the company has completed its three months’ listing period criteria for index inclusion. This criterion was brought down from six months to three months recently. “ICICI Prudential’s market capitalisation is now more than that of Bank of Baroda. It is more likely that the insurer could replace the public sector lender,” said a broker.

Samie Modak

Sebi may soon get a new member 

The government may soon fill the vacant position of whole-time member at the Securities and Exchange Board of India (Sebi). The market regulator is operating with only two whole-time members since Rajeev Agarwal’s tenure ended in early-November last year. According to sources, the government has zeroed in on two candidates and the final announcement could happen soon. “Since the merger of the Forward Market Commission with Sebi, a minimum of three members is required for the optimal functioning of all the departments,” said a source.  

Samie Modak