Prakash Diwan, Market Expert
“The valuations for BSE stock were a stretch. Markets always love an excuse to kind of book profits. And this whole thing about options volumes coming down very progressively and suddenly – this drastic thing from the 3rd to the 10th of June, my sense is, it is primarily driven by a lot of the hedge funds getting investigated for whatever misdoings were reported or were heard of in that space. So, if that were the case, I’m sure they would pull back from the market for at least this week.
Now, if they were to come back after a couple of weeks, things would start looking up and the stock will also kind of absorb that reaction positively. But what we need to look at is this is a secular long-term story, whether it’s a BSE, whether it’s any of the depositories, whether it’s any of the registrars and transfer agents, you will have to latch on to this from a slightly longer-term perspective.
So yes, BSE makes sense to buy on dips, it’s a great franchise, you can’t replace it, even if the NSE were to be around, they both parallelly will kind of continue to grow at their own respective pace. So, I think you will have takers for BSE, but at lower levels, and you could probably wait for some consolidation to happen in the stock.
So, there will be a change of hands as we all see whenever stock rises, meteorically. And once that is done you will probably see a new base being formed and a growth from there on. So, I would, believe that’s likely to happen more than not.”
“A couple of days back, IEXwas flying because the MCX tie-up happened, and MCX was likely to take the price inputs from IEX, and everybody thought that was a great occasion to celebrate, and the stock actually reflected that. I just want to take ourselves back to the moment where the stock has lost a lot of ground because of this fear of market coupling coming in.
And throughout the last year, it’s been regaining ground more because of the organic growth that’s likely. I don’t think market coupling is something that needs to be made into a bugbear the way it is right now.
In fact, price discovery will have to be as broad based as possible. You can’t rely on the whims and fancy or mechanisms of only one institution. So, eventually, once that happens and gets digested, it will lead to a much healthier market in terms of volumes, which is good for IEX. So, they should focus more on what brings them volumes, more customers, and more depth, rather than be worried about some sort of a monopolistic, if not monopolistic, some sort of an advantageous position that they can keep expecting to leverage forever.
So, they’ll have to live with that reality. And if you look at that possibility, I don’t think there is any reason to panic. The stock will probably bounce back at some point in time after this initial gush of selling liquidity gets absorbed.”
