BSE (Bombay Stock Exchange)- Bet on Financialization?

(Sreekanth) #63

Interesting things happening at INX…

(Sreekanth) #64

(Sreekanth) #65

“Terming the Budget as very positive for India INX, the international exchange of Bombay Stock Exchange (BSE) at GIFT IFSC, V Balasubramaniam, MD and CEO said, “All transactions on our exchange will now be exempt from capital gains (both long term and short term) in derivatives for all non-residents, which include both foreign portfolio investors and eligible foreign investors. Also, the announcement of creating a unified financial market regulator at GIFT IFSC is a welcome move and will bring focus on the IFSC.””

(Sreekanth) #66

2nd and 3rd buyback tranche completed over past 4 days…

Details as of now:

(rahulshares) #67

Its looks like an excellent value pick at current prices. With around 50pc of mkt cap as cash and securities holdings, and available at 8pe and giving dividend yield of 3pc its a steal.
Further, with LTCG coming in, after dust settles, ppl will infact trade more. Exchange has INX india in GIFT city which has got benefits in this budget and is seeing good progress. Downside could be limited with buyback currently going on.

(Rajesh) #68

Are not these peak earnings in bull market ? That’s why PE less. Operational efficiency is double edge sword. In bear market, volumes will go down and hence earnings. In these type of businesses where fixed cost is 100%, high volatility of earnings is seen.

(PareshPatel) #69

Less PE is due to CDSL stake sell, just remove it from calculation and calculate it again for the correct PE. (CDSL stake sell is one time income)

(ad9) #70

How will the company use the heavy proceeds from cdsl sale…any Special dividend ?

(AmitContrarian) #71

Always ask yourself what you said who doesn’t know that ? If its easy for others to see that then why this stock is trading cheap ? You’ll get your answer.
I feel like you are trying to say markets are fool , selling something real cheap. I don’t think markets are fool, there is very good reason why its trading at fair valuation.

(sambandham82) #72

Market is not fool but inefficient in the short term. Please remember though warren buffet agrees average american should index, he also said, “i have benefited from competing against opponents (proponents of EMH) who have been taught that thinking is a waste of energy”.

Its been just 1 year since BSE’s IPO. Let us wait as market is busy in 2017 chasing fancy stocks with huge debt.

(azardeen) #73

I have been watching equity turnover data on NSE and BSE on following webpage.

From Jan 19 onwards, there is sudden jump in turnover on BSE compared to NSE. From Jan 19 until yesterday, BSE’s market share is around 20% compared to 13% in last 2 quarters. Is there any particular reason for this? Can we expect this to continue?

(TT) #74

Large volume trades are much cheaper on BSE compared to NSE. Though the pricing was revised a few quarters ago, it’s possible that Jan 19 onwards there was a lot of large trades that needed to be executed and were done on BSE instead of NSE.

(Vanshik Gupta) #75

With stoppage of information to SGX. It is a great news for GIFT CITY participants, actually it was well planned by govt. By giving rebate to GIFT CITY in terms of all taxes including LTCG. With start of Single stock future by SGX of NIFTY50, it was much needed. Now it will add-on to the liquidity enhancement scheme by INX. Only problem I think is, will nifty50 future trade on INX or not ?

(azardeen) #76

It seems to be a great news for BSE India INX.

Here are some related things I gathered about potential opportunity for India INX.

“GIFT SEZ has been notified as an International Financial Services Centre by Government of India as India’s first International Financial Centre. In the absence of an IFSC in India, India has lost roughly 50 per cent market share in the two most important India-related products: with Rupee and Index being mostly traded on foreign platforms instead of onshore trading in such products. For instance, the trading volume of the rupee and India-based indices is estimated at over $100 billion a day.”

From a recent interview of India INX MD & CEO Balasubramaniam. “We want to introduce the rupee-dollar contracts. If it happens, it will be a big move. Two other international centres, Dubai in the west and Singapore in the east, witness a lot of interest in this product. Whenever there are volatile periods, for instance US elections or Brexit, we see their volumes shoot up. In Dubai alone, they trade about $1 billion of rupee-dollar contracts everyday.”

“Once the masala bond list gets underway, India INX will see a big boost in daily average trading volume, he said, setting the target at US$1 billion per day. The bond listing is expected next year.”

“A March 2016 paper titled Features and trends in the non-deliverable forwards (NDF) market for the Indian rupee, by the Finance Research Group (FRG) at IGIDR, and commissioned by the City of London, estimates that the offshore markets for the rupee, such as the NDF market and the Dubai and Singapore exchanges, earn nearly $9.2 billion annually as fee income from rupee trades. The country can, literally, cash in on this if trades were permitted at the IFSC.”

(AmitContrarian) #77

Anyone knows how much of SGX revenue will move to INX ? It will help assess the revenue gain in BSE.

(rajput.delhi) #78

The opposite view could be that today when info is all prevelant can you really prevent someone from accessing info. If the foreign exchanges do not get the info from our exchanges directly they will find other means. Our exchanges need to improve their systems and make them more attractive rather than becoming Protectionist
Is it fair when you first allow someone access to get some fees and then later when u find that that someone is making more money you stop the service!!


(AmitContrarian) #79

They will prevent it, That is clear from the press release.

(AmitContrarian) #80

What you think our exchange lacks ? BSE is among the fastest exchange in the world ( open their AR and read)
Its just bcoz we didn’t had INX , things were allowed to move in singapore. NSE / BSE were not able to compete with SGX bcoz of tax regulations, thats fixed by creating the INX .

I feel you didn’t think hard enough for what questions you had.

(rajput.delhi) #81

Well, yes it was just a feeling devoid of deep thought and I could be wrong

But I just felt something was wrong in the way this decision was taken and shoved down SGX’s throat (esp in the wake of SGX’s move of Indian stock futures trading).

To draw a parallel, it’s like an OEM say, Havells, first appoints a dealer to improve its reach and then after a few years when it builds its own showroom tells the dealer that - I won’t supply my goods to you anymore cause otherwise no one willl come to my showroom. And see our agreement states that we can terminate our contract by giving a notice period. But if you still want to continue selling my products then I doubt if your sophisticated customers would like to buy from you as you would not be seen as my Authorised Dealer. They will see it as illegal.

It will be interesting to see how SGX and its customers react to this decision. I guess SGX had a stake in BSE. If they complain to bse then maybe bse can shift the blame saying behind closed doors that it was Nse’s decision as they would have lost some futures business to SGX :slight_smile:

There might still be more to it than meets the eye. But it really doesn’t sound like fair business when it is not based on merit and is done using one’s dominant position. And then one could argue that it happens all the time all over the world like what Trump is doing to most migrants and Indian IT or some people in India unabashedly asking for reservation or some political party in Mum openly saying Maharashtra is only for Marathis. Many would justify these moves but are these decisions fair and based on merit? Even though these examples are not related to business but they are. And one could justify his stance on these decisions by taking sides based on whatever suits his own personal situation like

  1. Exchanges decision is good as I hold shares in bse
  2. Trump decision is not good as I hold shares in Infy
  3. Reservation is good as being from the same community it improves my chances to getting a job
  4. Outsiders should not be allowed in Maharashtra as they don’t understand our culture

Limaya’s comments -

  1. SGX’s “sophisticated” customers wouldn’t want to trade in indices which are not licensed as they would view it as illegal trading.
  2. We are using the terms of the contract to terminate using the notice period clause.
    These comments clearly show their state of mind that this decision is not based on merit but is based on fear of losing business and using their dominant position in this case.

But I guess, as investors we are supposed to simply count out profits and overlook the cost of these profits :slight_smile:

But then it’s quite possible that tmrw we would buy a stock like SGX based on the news that the company is launching a new product line like Indian Stock Futures trading and it is sure to bring in profits, only to discover few days later that the OEM has pulled the plug. Would we then justify OEM’s decision saying oh now they have there own showroom :slight_smile:

BSE’s arrogance earlier created NSE and one could still get a whiff of the same arrogance when BSE claims huge market share in other segments. Is NSE now showing the same arrogance by taking such unilateral decisions? Will this be seen as a dark spot in the life of this orgn?

PS: With systems I meant all systems required to conduct business and not just IT systems.


(azardeen) #82

Due to International exchange in India now, SGX is a competitor to BSE/NSE. They will be competing with each other in most of their products. Why should BSE/NSE license their products to a competitor and let them make more money?