BSE (Bombay Stock Exchange)- Bet on Financialization?


(puneetc) #277

Amidst all the doom and gloom in the market, just noticed that yesterday INX touched the all time high turnover of a whopping $1.7bn which is almost double the avg daily turnover for past one month. Also, number of contracts traded crossed 100k for the first time.
Considering volatility might continue to be high till elections, I feel the turnover at INX are going to go further up in coming days and months.
Only question is when will BSE start charging for transactions.

Disc: Invested


(AmitContrarian) #278

They can’t as long as NSE is not charging anything …


(puneetc) #279

Well, it can’t be free forever!
At the end of the day, both are in the market to make money and I’m sure they would also want to make the most out of the opportunity.
And btw, the average daily turnover for NSE Gift city exchange is less than half that of BSE.
Considering the fact that both exchanges have been operational for more than an year, we can say with decent certainty that INX is much ahead of NSE-IFC.


(Mridul) #280

image


(AmitContrarian) #281

Now it looks like trading close to its intrinsic value of Rs 650 / share. I am buying it.


(Ashish) #282

In an interview some days back, Ashish Chauhan mentioned that if they charge after gaining scale, they don’t fear customer going away. He gave two examples - in equity / derivative BSE doesn’t charge for nifty companies but the volumes are still with NSE and similarly for BSE MF platform, BSE started charging where as NSE doesn’t charge but there is no significant volume shift from BSE to NSE. Basically, building scale is important and after that networking effect becomes the sticking point.

Disc: Invested and added more @ 700.


(sambandham82) #283

Can u please breif about intrinsic value? I assume it is sum of all discounted future cash flow+terminal value or Sum of the Parts valuation. If intrinsic value is 650, why u r buying at 680 ? At least one should buy 20% less than intrinsic value. what is your discount rate ? I think its quite high.


(Ashish) #284

Book value of the company itself is Rs. 650.


(sambandham82) #285

In general, not specific to BSE, Book value is not intrinsic value. Many companies trade well below its book value and still they are not good enough for investment. Book value may either be inflated or may erode in due course of time (even if it is in the form of cash) by a bad business or bad management.


(Ashish) #286

Thanks you for the guidance. Appreciate it.


(sambandham82) #287

Please not to mention…Appreciate ur kind gesture.


(AmitContrarian) #288

i took very conservative assumptions came up with 650 /-

now, bcoz there are hidden assets that i believe can give it higher growth that i have assumed and bcoz i can’t catch the bottom i have started to accumulate from 680 downwards , I’ll buy as stocks corrects more form here.


(Abhinav Mehrotra) #289

Uploading the BSE Star MF Order Data, the raw data from the BSE website was in a daily format. Have converted it to yearly format for my use. If anyone wants to use the raw data for a monthly or quarterly format they can do that too. I have included the raw data in the sheet as well.

The Rs. 5 per order BSE Star Fee is the blended figure that comes from the management in the Q4FY18 Conference call. We are halfway through the FY19 and we have almost reached the number of orders of the full FY18. If the growth trend continues, we can expect around 15-16 cr of revenue from the BSE Start MF platform in FY19.

If my memory serves me right, I believe the revenue contribution from BSE Star MF in FY18 was close to nil.

BSE Star MF Order Data.xlsx (155.5 KB)

PS: In a recent interview Mr. Ashish Chauhan has shared that BSE STAR MF saves more than Rs. 300 per transaction for the MF industry.

After precious metals, we will apply for energy contracts_ Ashishkumar Chauhan, BSE - The Economic Times.pdf (150.2 KB)


(saumya) #290

(AmitContrarian) #291

actually STT is the biggest pain in the ass for commodity exchanges today, Only speculators trades in MCX no delivery based buying happens at all.
The reason is if you buy commodity outside you don’t have to pay STT , means all the genuine commodity buyers find it expensive to buy from exchange.

Not sure whose idea was to introduce STT in commodity exchange markets, its foolish. no where in the world any commodity exchange charges STT.
Until our Gov realizes this STT everywhere is just foolish nothing going to happen.


(saumya) #292

SEBI Allows Foreign Entities In Commodity Derivatives Market


([email protected]) #293

([email protected]) #294

(TT) #296

It’s also free, so market share is natural. What will matter is the market share when they start charging. At that time, it will be the quality of infrastructure, service, etc. that will decide the market share, in addition to pricing.


([email protected]) #297