Trading Frequency Of Bse Stocks Down: Study

According to a latest study carried out by the bourse, during the month of September, out of the total 6,802 scrips listed, only 1,531 scrips (22.51 per cent) were traded on almost all trading sessions.

Besides, 2,124 scrips of the total 6,802 were not traded even on a single day.

Only 557 shares were traded on all 18 trading sessions in September, accounting for 66.35 per cent of the total trades.

This implies that only 8.19 per cent of the total number of scrips listed at BSE accounted for 87.34 per cent of the total value of shares traded in September.

 

The trading pattern for the month reveals that activity is more in newly listed stocks.

"When these shares are listed, initially for some time they are traded regularly. Gradually, there is a decline in the frequency with which these share are traded which then results in these stocks becoming illiquid," BSE president M G Damani said.

While there was a significant decline in the number of stocks which were traded on all trading days, there was notable increase in the number of scrips that were traded only for a few days.

For instance, the analysis indicates that the number of shares traded for only one to three trading sessions in a month rose from 449 in July to 581 in August and 674 in September.

The number of shares traded on all trading sessions in a month dropped sharply from 1,705 in July to 1,358 in August. This number rose marginally to 1,531 in September. However, since July, there has been a net fall in the number of scrips traded frequently on the bourse.

"The rise in September was mainly due to higher number of shares being listed on the exchange compared with that in August. When shares are listed there is a tendency for more trades," Damani added.

While in August 115 new scrips were listed on the BSE, in September a total of 187 stocks were listed.

According to the statistics for September, for 1 to 3 trading sessions 674 scrips are traded, while that for 4 to 6 trading sessions 513 scrips were traded.

For 7 to 9 trading sessions 572 scrips were traded while for a period of 10-12 trading days, 591 scrips were traded. 797 scrips were traded for 13-15 trading sessions while for all trading sessions 1,531 shares were traded.

Besides this, the percentage of scrips traded below par stands at 49.34 per cent (1,386scrips) as on September 26 this year, while 47.95 per cent (1,347scrips) were traded above their respective par values.

Damani feels the illiquidity in these stocks listed on the bourse can be eased only if the BOLT expansion is allowed.

"The illiquidity on the bourse can be eased only if investor in different parts of the country is allowed to trade on the BSE," he said.

The bourse has already brought these factors to the notice of Sebi while putting up the cause for BOLT expansion.