Even as trading interest in the B2 group is rapidly dying out, the focus has been solely concentrated on the software stocks in the group. A clear pointer is the fact that in the past two months, 8 software scrips have constituted over 18 per cent of the total turnover in the B2 group.
In the last two months of trading at the Bombay Stock Exchange (BSE), out of the total turnover of Rs 157.75 in the B2 group, 8 software scrips have contributed Rs 28.95 crore. In effect, out of the 1000 scrips that are traded daily, 10 scrips account for nearly one-fifth of the total turnover.
Among the most actively traded software scrips are Leading Edge and Sierra Optima which have constituted 3.71 and 6.64 per cent in the last couple of months.
New listings on the BSE such as Cyber Tech Systems and Infotech Enterprises, too, have been witnessing hectic activity with both these scrips posting sharp gains in a very short time span. Says Ramesh S Damani, BSE broker: "Currently, the software sector is doing extremely well, and everyone wants to cash in on the boom.
Apart from a couple of scrips, a majority of the software scrips in the B2 are not worth the premium they command now.
This craze won't be sustained for a long time. In 1992, there was a mad rush for cement stocks, then for mini-steel stocks and then for NBFC stocks. Today, only the best stocks in all the above sectors still command genuine trading interest. Similar will be the case for software stocks.
There will be a shakeout soon and only quality stocks will survive." Maulik Sharedalal, another BSE broker said, "Given the rate at which the sector is growing and the non-cyclical nature of the business, even some of the lesser quality stocks are currently enjoying valuations on the higher side. But apart from a few stocks, there is not much of institutional activity in these stocks."
Marketmen feel that the increased interestcould be due to the fact that quality software scrips such as Infosys Technologies,Tata Infotech and NIIT are well beyond the reach of the retail investor. Also, there seems to be an element of speculative activity in these scrips going by the way which the BSE has imposed special margins on most of these scrips.
Said a BSE official: " Apart from the daily margins, the exchange imposes a special margin on scrips whenever there is any suspicion of manipulative activity."