Street signs: NSE shares in demand, betting on PSU space, and more

NSE shares in demand 

If the National Stock Exchange (NSE) stock was listed, its shares would have gained following the Securities and Exchange Board of India (Sebi) order in the co-location (colo) case, says market experts. “The colo case was a major overhang. Notwithstanding the penalty, the exchange’s valuation would have gone up as the uncertainty has ended,” said an analyst, highlighting the exchange’s impressive financial metrics such as profit margin and return on equity. Another market player said shares of NSE, which usually change hands at Rs 950 in the grey market, had no sellers at Rs 1,050 but plenty of takers. An investment banker said any existing investor looking to divest stake in NSE ahead of its IPO will find it much easier now than earlier.

Samie Modak

Hedge ahead of poll results: Experts

Derivatives experts are recommending that investors hedge their portfolios as the market is likely to see more volatility in the run-up to the election results. The Nifty index is likely to consolidate between 11,550-11,700 levels and may drift lower to 11,333 levels if this support is broken. Experts are recommending employing the bear put ladder – an options trading strategy used to profit from a fall in stock prices. “Volatility is likely to jump ahead of the election outcome, hence hedging is advisable for next support zones,” said Chandan Taparia, derivatives analyst at Motilal Oswal Financial Services.

Ashley Coutinho

Betting on PSUs

The country’s fourth largest fund house is trying to defy weak investor sentiment towards the public sector undertaking (PSU) space by launching a new fund offer Aditya Birla Sun Life PSU Equity Fund, an open-ended scheme that will predominately invest in state-owned companies. The BSE PSU index is still 21 per cent below its all-time high despite the benchmark Nifty hovering around record levels. “Most PSUs are trading at record low valuations and offer superior dividend yields. While profit growth for most companies has been under pressure, it won’t be a bad time to look at the sector,” said an analyst.

Samie Modak