BSE, NSE ride the bulls on higher turnover

The bullish market has benefited not only stock brokers and investors, but also stock exchanges, thanks to rising turnover.

There has been a significant improvement in turnover at the country’s leading stock exchanges — BSE and NSE — in the run-up to record high of 14,964 scaled on Friday. Brokers said the higher turnover was due to the rise in share prices as well as a huge contribution from new listings. With this, valuations of stock exchanges are expected to improve as the rising turnover will reflect positively in their balance sheet. Their revenue from transaction charges will go up substantially, adding to their income and profitability, say brokers.

With foreign investors picking up stakes in exchanges, the original institutional shareholders have seen the value of their holding surging. In possible secondary market deals, local financial institutions like ICICI Bank will be in a position to sell stakes at a substantial premium.

The NSE, which enjoys bigger market share among the two premier stock exchanges, has recorded daily average turnover of Rs 11,350 crore in the cash segment in the current month so far (till July 5), compared to Rs 9,221 crore in June and Rs 9,885 crore in May. Trading volumes improved to 47.9 crore shares from 37.9 crore and 46.6 crore, respectively. The hectic activity in derivatives (F&O) segment will prove to be an added advantage to the NSE, which enjoys almost the entire share in this market.

Turnover on the BSE shot up to Rs 5,353 crore, from Rs 4,537 crore and Rs 4,706 crore, while volumes rose to 30 crore shares, compared to 24.7 crore and 27.4 crore, respectively. High-profile new listings like DLF and Vishal Retail emerged as turnover toppers on the bourses.

Realty giant DLF, which was listed on Thursday, attracted a huge turnover of Rs 1,905 crore, while a total of 3.4 crore shares changed hands on the BSE. Debuted on Wednesday, Vishal Retail attracted volumes of 1.1 crore shares, which were worth Rs 854 crore.

Since turnover at the two stock exchanges was boosted by the initial frenzy in DLF and Vishal Retail, brokers feel there may be some correction in the trend as the euphoria eases in coming days. The two stocks, in fact, saw significantly lower turnover of Rs 318 crore and Rs 495 crore on Friday.