In case of cupid, upper circuit was 20% and got changed to 10% on 20th November 2015.
So in this case 20% rule is applicable w.e.f 1st Oct 2015 and 10% rule for the month of November and thereafter (till limit gets changed to 5% or 20%).
It is capped at 397.6, exactly 60% from 30th Oct closing of 248.5.
So looks like change in daily circuit limit (20%, 10% and 5%) will also affect price.
Ravi,
that means Cupid"s this Quarter price cap is 592.5 (200%@197.5 (30th Sept.closing price)) because of earlier 20% daily circuit limit.Am i rightā¦
Can you have a look on spice jetā¦non of these rules are working ā¦its Nov.month cap is exactly matching with 60% (with 10% daily circuit limit)ā¦
But stock has gained 160% from 1st of OCT with 10% daily capā¦how come this happenedā¦it should be capped at 100%ā¦as per my understandingā¦
Raviā¦
if that is the case then all quality stocks which are at 5% daily cap will suffer mostā¦as most of the small cap quality stocks with 5% cap has gained 80-90% from 1st of OCTā¦these will suffer a lot even if their daily circuit limit is changed to 10%/20% in futureā¦ as its yearly cap applies with 5% rule from 1st of OCTā¦
so most of 5% capped stocks may not gain for next 10 monthsā¦how bad it isā¦
Note that if the midcap index moves during this time then the share will be allowed to move up beyond the strict limits (and similarly for downwards movement also).
Iām also cursing the bse for this stupid interventionist rule which inhibits free markets to function. My top gainer Divyshakti granites was stuck for about 11 trading sessions around 101 and now again around 124 for god knows how long. Itās just absurd. The market is now conspiring against you by not allowing true price discovery. How is this fair?
Fellow Investors,
I hope value investor style of investing is to be patient and look at the long term. We all must be aware that, how much ever intervention might happen, in long term the stock will find its price. Information takes time to reach every āvalue investor/speculatorā mind in a crowd.
Give it some time. We need to see what happens in the 1-Yr time horizon. BSE cannot predict the future either. Even though it feels good when the stock that you purchased raises, we should also understand the price can remain constant or fall for various reasons.
We can discuss the happenings on day to day basis. but we will be confusing between Correlation & Causation. Please be aware, and give your multibaggers its time.
Views are welcome.
Dear All,
I spoke to Mr Yogendra Daxini of the BSE surveillance department and he asked me to write an email putting in my opposition to this draconian measures and he would in turn put it up to the higher ups in BSE nnd get it annulled. Below is the email I wrote which all of you can also write to him so that a collective voice would be more effective:
Manoj Agarwal manojag@yahoo.com Nov 19 at 12:04 PM
To
bse.surv@bseindia.com yogendra.daxini@bseindia.com
Dear Sir,
BSE has put in place the Weekly/Monthly/Quarterly and Yearly Circuit Limits on shares exclusively listed on BSE. For a company which is traded on T to T because the promoters have not demated their holding and as a result the circuit limit of 5% is applicable to these securities for no fault of the investing public. Now on top of this BSE has put in this circuit limit that these shares cannot trade beyond 30% 60% and 100% on monthly,quarterly and yearly time frame.
The role of BSE is to provide a free and fair price discovery platform whereby no mal practices are indulged in and the price discovery is perfect. If BSE puts into such restrictions of the above circuit limits then how can BSE give an investor a free and fair price discovery mechanism and platform where an investor can get the perfect price for what he buys and sells.The above restrictions are not conducive to a free and fair discovery of the prices of the scrips in which one buys and sells.
Please put in a more effective surveillance mechanism to put a stop to price rigging and circular trading on a real time basis so that the malpractice which you want to curtail can be handled more effectively rather than putting out a blanket directive curtailing free and fair price discovery.
The above restrictions are like the Mumbai Police for failing in their policing efforts putting out a directive that no one will come out of their houses after 7 pm because they cannot police effectively.
I am hopeful that BSE in its wisdom will see the merit in the mistake that it has committed in putting out this circular and will withdraw it so that investors are not penalised for no fault of theirs and BSE will put in a more effective measure to put a stop to price rigging.
Thanking you,
Yours Sincerely
I disagree. If your line of thinking is extended, then whatās to stop bse from putting similar restrictions for 2yrs, 3yrs, 5yrs and 10yrs timeframe also? See the slippery slope? The market should never interfere, it must always remain free and fair for all participants. This is a necessary requirement for markets to function in the long run, else people will start losing faith in them.
Thatās good. I will also email. Also, one important thing we all are missing is that such caps would ārobā minority investors in case thereās a takeover bid (open offer) of a company because in any case, thereās a upper cap to the stock price and therefore, the potential owner would not be too worried on price discovery as they would know the maximum that they would have to shell out. See, what is happening in the case of UV boards. We know that its almost certain that UV would be bought by Uniply but thanks to these rules UV boards cannot move beyond 20rs till 30 Sep 2016 and obviously Uniply would not have to wait till then because open offer rules have a window of either considering 6 months or 2 weeks (as far as i remember). Imagine the plight of UV boards investors who are owners of a much superior balance sheet but citing the price movement uniply would get away with UV Boards paying a lot less.
And this is just one instance. This game could be played in so many other stock - just buy promoters stake behind close doors and well, who cares about minority - and BSE is actually ensuring that noone is bothered about minority anymore.
Do you know from where investors can see max limit allowed in a BSE only stocks? Calculating it is very tough especially when you think when quarterly effect will come when monthly limit touched, etc.
BSE should display such information with every share.
I also mailed to given email address. Told that you are tolerant toward wrongdoer but intolerant toward us. Given example of few stocks. One was Trilogic Digital. Told when it was so low for very long then you did not did anything to raise the price. But when it was rising then you capped the rise.
Can some clarify my doubtā¦
Presently stock is 10% daily capā¦and its price is capped for this Nov.month at 60% of 30th OCT closing price.
In dec first week if stock hits continuously 2 uc then BSE will shift to 5% daily limitā¦
now Question is with 5% cap Dec month cap is 30%ā¦stock has already gained 20 through 2 UC in dec first weekā¦then will it grow only remaining 10% or will they allow it to move till it meets the Quarterly cap (which is much higher than the Dec.month cap of 30%)ā¦
Because Quarterly cap is set by 20% daily limit.(in OCT stock was traded with 20% circuit limitā¦later they changed to 10% in NOV.)
i understand this rule pretty well and have made money shorting stocks (a disclosure). So letās take an example of cupid and understand this:
Now obviously the price is not 393 but 397 and this 1% error comes in a lot of scripts that i have seen, not sure why but mostly the price is right. Hopefully the above examples helps.
Letās hope better sense prevails, and BSE rolls back this stupid rule, cannot see any logic in it.
I think tomorrow will clear the cloudsā¦
if tomorrow cap is not revisedā¦then it may go for correctionā¦then its good time to accumulateā¦
Like I said before, the 1% additional comes because the midcap index itself has moved up during this time. the stock gets an additional room over and above the limits you explained based on the midcap index movement.
Thenā¦it will be capped at 397.6 till end of Decā¦
But big problem is if it hits 2 UC with 10% in jan. first weekā¦( from 397.6 to 481) then they will switch to 5% circuit limitā¦Then with 5% circuit limt yearly limit is 395ā¦which is far less than the market price of 481ā¦
That means if stock hits 2 UC then it would be end of story till 30th sept. 2016ā¦
possibleā¦ by the wayā¦ since the stock can go up tomorrow, i think thereās still something missing in my understandingā¦ and this makes me sad because thereās definitely something that is not outlined in that notice which is playing a part in deciding the priceā¦ will try to clarify this with bse tomorrow
today circuit revised to 437.3ā¦and has already locked in UCā¦
I think Quarterly cap is much moreā¦
there are high chances of getting revised to 5% day after tomorrowā¦
There is total confusion.
I guess we should be careful in posting something which we are not 100 % sure, esp regarding price limits targets etc, as this may impact small investor behaviour and may incur some losses.
Best regards
Santosh
as per today "capā¦I think BSE might have applied 20% for calculating Quarterly limitā¦
so in this case yearly limit also will be applied 20% cap calculation, Irrespective of intermittent circuit changes by BSE.
in short term it may have hiccups but in long term it will e very good.
dont think in the long term it is good because in any case the maximum upside for any stock is 400% only - no matter what circuit it applies - as per the notice
