Street signs: Focus on nine F&O stocks, Coal India's m-cap, and more

Focus on nine F&O stocks

The Securities and Exchange Board of India’s (Sebi’s) move to tighten the norms for derivatives trading has placed the spotlight on nine stocks in the derivatives segment. Analysts say Adani Enterprises, Indiabulls Housing Finance, Vodafone Idea, Jindal Steel, Just Dial, NCC, Punjab National Bank, PVR, and YES Bank will enter the “ban period”, where fresh positions will be barred and only unwinding of existing positions will be allowed. Further, there are over a dozen other companies which could be on the verge of entering the “ban period”. “While one cannot say for sure if these stocks will correct or rally. However, one can expect frenetic activity as traders align themselves to the new rules,” said an analyst. Samie Modak

MF distributor commissions to be hit

Persistent selling in the markets has significantly eroded commission-linked investor assets, handled by mutual fund (MF) distributors. Industry participants say this will further erode commissions on which MF distributors were depending on after the scrapping of upfront commission by Sebi. "Large asset base was helping some individual distributors as this still yielded decent trail-based commissions. However, erosion of asset base will deepen the cut on distribution income," said an individual adviser. "Higher asset base had become crucial in the industry to absorb cost of client acquisition and other operational costs, after removal of upfront payouts," he added. Jash Kriplani

Coal India’s m-cap less than dividend payouts 

Shares of Coal India plunged to all-time low of Rs 122 last week. At that price, the state-owned company was valued at Rs 75,000 crore — less than the total dividend of Rs 79,000 crore paid by the company in FY14 and FY15. Coal India made its stock market debut in October 2010. In the IPO, stock was priced at Rs 245. Now, the stock trades at nearly half the issue price. Even if one adds all the dividends paid since listing, the adjusted stock price works out to Rs 290. Market players said the stock has proved to be a value trap. “It has been a decade since Coal India’s listing. The stock has always topped the dividend yield charts, but failed to make real appreciation. It’s an example why the market doesn’t value PSUs,” said an analyst. Samie Modak