Edelweiss Financial gains after Cabinet OKs launch of Bharat Bond ETF

Edelweiss Financial Services rose 1.39% to Rs 113.20 after the Union Cabinet on Wednesday approved the launch of Bharat Bond Exchange Traded Fund.

The bond ETF, to be rolled out by Edelweiss Asset Management Company (AMC), will have two variants - one scheme maturing after three years (2023) and another after 10 years (2030).

The Bharat Bond ETF units will be listed on the stock exchanges. The ETF will carry expense ratio of 0.0005%.

The fund will invest in a portfolio of bonds of CPSE, CPSU, CPFI or any other government organizations. The first tranche would be only for 'AAA'-rated bonds.

Shares of Edelweiss Financial Services dropped 9.44% in the past two trading sessions to settle at Rs 111.65 yesterday, 3 December 2019, from its close of Rs 123.30 on 29 November 2019.

Meanwhile, the S&P BSE Sensex was down 84 points or 0.21% to 40,591.03.

In the past one month, shares of Edelweiss Financial Services jumped 19.78% to its current market price of Rs 113.20, outperforming the Nifty Financial Service index's 3.46% rise in the same period.

On the technical front, the stock's RSI (relative strength index) stood at 48.980. The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30.

The stock was currently trading above its 50-day moving average (DMA) placed at Rs 103, but below its 200 DMA placed at Rs 143.88.

Edelweiss Financial Services' consolidated net profit tanked 81.2% to Rs 51.17 crore on 10.1% decline in net sales to Rs 2,405.24 crore in Q2 September 2019 over Q2 September 2018.

Edelweiss Financial Services is engaged in providing investment banking and advisory services, and holding activities/investments. The company's segments include agency business, capital based business and life insurance.

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