6 days ago
BSE Shares Face Pressure as NSE IPO and CAS Weigh
BSE runs a stock exchange where people trade shares and financial contracts.
Its stock price has dropped 6% in one month, although it is still up 26% this year.
Some analysts say fewer trades in Sensex options are hurting the company.
They also say changes in funding rules have reduced activity in some derivatives.
The new CAS has added uncertainty and may be reducing weekly-options activity.
BSE is also competing with NSE, which is planning an IPO in the second half of September.
Because of these concerns, some analysts advise investors to avoid BSE or take profits.
Other analysts believe the recent fall may create a buying opportunity.
Their possible price targets range from Rs 3,400 to Rs 3,800, depending on the market's direction.
BSE shares have fallen 6% in the past month but remain up 26% year to date.
Analysts cite declining Sensex options volumes and lower equity-derivatives turnover as pressures on BSE.
The introduction of CAS has created market uncertainty and contributed to weaker weekly-options activity, analysts said.
The planned NSE IPO in the second half of September may influence investor preference within the exchange sector.
Analysts differ technically: some see further downside, while others expect a recovery toward Rs 3,668-Rs 3,800.
- Who
- BSE and analysts from JM Financial Services, Master Capital Services, Tips2trades, and Coherent Wealth.
- What
- BSE shares have declined recently amid concerns about derivatives volumes, CAS, competition from NSE, and the upcoming NSE IPO.
- Where
- In the Indian stock-exchange market.
- When
- Over the past month and three months; NSE is targeting an IPO launch in the second half of September.
- Why
- Analysts cited weaker Sensex and index-options activity, changes in funding norms, CAS-related uncertainty, limited market-share gains, and investor interest in the NSE IPO.
Bearish View
Bullish View
Near-term share direction
Bearish View
Akshay Bhagwat advised staying away from BSE and potentially booking profits, warning that the downtrend could intensify and the stock could fall below Rs 3,000.
Bullish View
Aditya Agarwal said BSE looks attractive after its correction and could move toward Rs 3,750-Rs 3,800 from a positional perspective.
Trading outlook
Bearish View
Ravi Singh said weaker derivatives turnover, CAS-related concerns, competition from NSE, and expectations around the NSE IPO are weighing on BSE.
Bullish View
AR Ramachandran identified support at Rs 3,242 and said a daily close above Rs 3,390 could lead to Rs 3,668; Agarwal gave a trading target of Rs 3,400-Rs 3,450.
Investor action
Bearish View
The bearish view recommends caution because lower options activity could pressure BSE's share price in the short term.
Bullish View
The positive view considers buying after the correction, with stop-loss levels cited at Rs 3,150 or Rs 3,130.
Key facts
- One-month performance
- BSE shares are down 6%.
- Year-to-date performance
- BSE shares are up 26%.
- Key volume concern
- Sensex options volumes have gradually declined.
- Structural concerns
- Changes in funding norms and the introduction of CAS have weighed on derivatives activity, according to analysts.
- Competitive pressure
- BSE continues to face limited market-share gains against NSE.
- NSE IPO timing
- NSE is targeting an IPO launch in the second half of September.
- Bearish technical view
- One analyst warned BSE could fall below Rs 3,000.
- Bullish technical view
- Other analysts identified targets ranging from Rs 3,668 to Rs 3,800.
Quotes
AR Ramachandran
Sebi-registered research analyst at Tips2trades
“BSE has struggled to maintain momentum. The sharp moderation in equity derivatives premium turnover following changes in funding norms has weighed on volumes, particularly in index options.”
businesstoday.in
“The stock has been in a downtrend over the last three months. One of the key factors is that volumes in one of the most active products on BSE -- Sensex options -- have gradually declined.”
businesstoday.in
Sources
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