Illiquidity On Bse On The Rise

This shows that despite the intentions of the finance ministry and Sebi to revive the markets, shares continue to remain highly illiquid. Foreign institutional investors and merchant bankers believe that the markets could witness an upswing only after January, by which time the allocations for the emerging markets from global funds would be known.

Business Standard had earlier reported that the illiquidity in shares traded on the BSE rose sharply and was around 58.01 per cent as on September 26, 1996. This has risen to 66.20 by the end of October. On Friday the total number of listed stocks on the BSE was 6,859 and scrips which saw no trading at all totalled 4,429.

The average illiquidity percentage for October comes to 62.21, indicating the lack of interest in majority of shares. Statistics reveal that though the Sensex moved up after the credit policy was announced, the number of stocks traded on the BSE was 2,274, the lowest in October.

Says Lloyds Securities CEO Sanjay Agarwal: "The prices of shares are so low that there is no trading interest in the market. There are no intermediaries who are interested in creating a market in such shares. This one of the main reasons why there is a decline in trading activity for the past few weeks."

Marketmen say the clearance ofBOLT expansion will infuse some liquidity in trading on the bourse and add depth to the market. Adds Agarwal: "There are many upcountry investors in B2 stocks.