@AJ41 they have uploaded concall transcript today. You can download from NSE website. Thanks!
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Just to revisit the story on how it is playing out after going through the latest concall transcript
Pros -
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The latest quarter result is good. However, there is a cyclicality element as it is linked to the current bull market and/or corporate services like IPO,rights issues etc
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The equity derivatives market share is hovering around 7% now. Thanks to expiry date of SENSEX50 to Monday as against expiry date of NIFTY50 on Thursday. This tactical move played out well. Eventually, it can result in moving equity cash segment market share upwards
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Interoperability & Best Price Execution - Mr. Chauhan says he is trying and attributed some of the rise in the equity cash segment market share to interoperability in the recent concall transcript. He also mentioned about the “white lie” brokers were telling about adhering to the SEBI norms which eventually got exposed during NSE shutdown in February 2021.
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CDSL turned into a great subsidiary and attracted the market. CDSL will have another opportunity waiting in GIFT City when India INX opens gates to global equities.
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BSE Star MF continuous to grow. 90% YoY transactions growth. For now, it is getting inflows higher than industry inflows. In the recent concall, the CEO says, it has potential like CDSL. However, the pricing power is yet to be determined, as so far with increase in the transactions, there is also a lesser price negotiated with AMFI and Mutual Funds. The blended rate per transaction is 3.4 Rupees. For now, financial planners seem to be happy with BSE Star MF. Have to see whether it will emerge as a real moat.
- India INX is growing exponentially. 15 Billion dollars of trading is happening in the derivatives per day. There is a recent update about bullion exchange in GIFT city however, no clarity on how much India INX is going to benefit here.
In the below video, India INX CEO explains how they would like to position themselves as platform for all international broking firms/local broking firms/network service providers like TNS similar to a toll gate. Regarding the pricing, he explains that currently the brokers are charging around 2 to 5% transaction fee and India INX negotiated the pricing as 50 to 90% discount to the existing transaction fees.So, we can say this can help in finding true value of India INX.
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Zerodha holdings currently have around 4% stake in BSE Limited as its only investment above 1% in shares. The discount broker increased the stake in past few quarters regularly.
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Cash Balance of 2200 crores including its subsidiaries.
Cons
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Have to reduce stake in CDSL from 20% to 15% by October 2021. At the moment, no clarity on how they are going to use the proceeds better compared to having stake in CDSL.
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India INX CEO says, the global securities will be bought at the end exchange and so there is no difference in liquidity while accessing from say Exchange A in US and accessing it from India INX. So, if India INX ties up with NSE of US, it will be a network effect moat or else if it ties up with BSE of US, there will no liquidity advantage. This also leaves us with the doubt about how NSE IFSC is going to have the contracts with the global exchanges. At the moment, NSE is cash rich, it can afford to have some years of losses and can continue to play the unreasonable competitor.
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BSE has always tried to increase the liquidity in its exchanges by using proprietary trading. We never really know how much is the real trading (without proprietary) in its market share of equity cash and equity derivatives. Especially, I don’t see SENSEX50 derivatives that popular.
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In the words of Mr. Chauhan, it takes many years of losses to build monopolies. Here, in this context, we can read it about BSE Star MF and India INX. Not all can be CDSL. As the revenue from BSE Star MF decreased due to subsidized pricing, it can command less value as part of its monetization.
Overall, the story played out on expected lines. The market has so far rewarded most probably due to its stake in CDSL. It can throw a significant upside in case if any of these optionality plays out -
1)Increase of Equity derivates market share without proprietary trading
2)BSE Star MF getting good value discovery as part of its monetization. In the recent concall, it is clarified by the CFO that BSE Star MF is generating 10 cr operating profit(not revenue) per quarter where the lowest blended rate per transaction is considered. Considering that operating profit is 35% of net revenue in this case as per the call, the net revenue per year is coming to ~120 crores.
3)India INX taking charge as the gateway to access global equities and may one day route all the NRI investments to India. There is clearly a push to make GIFT city attractive.
Valuation
Cash - 2200 Cr
CDSL Stake - 1250 Cr (50% discount to current market cap)
BSE Star MF - 8 X 120 cr(Considering EBITDA as revenue and conservative industry multiple) 960 Cr
BSE building cost - 800 cr (mentioned by CEO in one of the concalls)
Current Market Cap - 5210 Cr
So, in short, all the other businesses are valued at 0.
Disclosure - Invested and biased
Portfolio - Southern_Cross's Portfolio - #22 by Southern_Cross
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Hi…Is the 2200 all free cash. There is assumption some of it could be broker securities. Would love your reading for that…
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Please go through the concall transcript. This question is asked by one of the callers.
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Notes from latest AR 2020-21 -
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BSE is world’s fastest and largest exchange in terms of number of companies listed. In terms of mkt cap, it is ranked number at number 9. Total listed companies at BSE at 5477 vs 5377 in Mar 20.
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Total money raised via IPO proceeds in 2020-21 at Rs 45,800 cr vs 20,800 cr in FY 19-20. A total of 30 companies listed on BSE in the entire FY. Total money raised via private placed debt instruments at 5.5 lakh cr vs 4.7 lakh cr in previous FY. In FY 20-21, there were 18 public issue of Bonds raising 10,588 cr vs 15,068 cr in previous FY. Out of the 18 public issues, 17 public issues were listed exclusively on BSE. Total money raised via issuance of commercial paper at BSE in FY 20-21 was 10,52,952 cr.
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BSE Star MF - India’s largest mutual fund distribution infrastructure with 82 pc mkt share. Total yearly transactions at 9.38 cr vs 5.75 cr in previous FY witnessing a growth of 63 pc. Platform registered 42k new members taking total number of members to 69k. BSE Star MF app has processed over 19.28 lakh transactions since launch amounting to Rs 11,000 cr till Mar 21. All 43 AMCs in India pay a service charge on a per transaction basis processed at BSE’s Star MF platform. It is the only only platform in the Indian MF industry that supports all modes of payments such as regular as well as direct MF schemes, Demat as well as non Demat mode of holding of MFs, MF unit settlements via broker pool as well as direct with investors for MF distributors
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Secondary market - Daily value of equity turnover on BSE in FY 2020-21 vs 19-20 was 4197 cr vs 2676 cr. Equity derivative segment daily turnover was 1.4 lakh cr vs 1000 cr in previous FY. BSE has launched Futures / Options on Sensex 50 with unique Friday expiry in Nov 2020. Current market share of Sensex 50 contracts at 13.5 pc vs comparable Index derivative contract.
In currency derivatives, BSEs mkt share dipped to 29 pc vs 41 pc in previous FY
In Interest rate derivatives, BSEs mkt share increased from 21 pc in PY to 31 pc in CY -
Commodity Derivatives - BSE only Equity/Debt mkt exchange in India to offer commodity derivatives since Oct 2018. Total commodities offered -13. Includes - Gold , Silver, Steel, Copper, Zinc, Aluminium, Guargum, Guarseed, Cotton, Turmeric, Almond, Brebt crude and Oman crude. Beacme first exchange to offer Options in Goods by offering options contracts on spot prices of Gold and Silver in Jun 20. BSE - only exchange in the world to offer Almond futures
BSE offering delivery of various commodities like Gold, Silver, Guargum, Guarseed, Cotton, Turmeric, Almond
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Debt Mkt - Executed trades worth 6.6 lakh cr vs 7.04 lakh cr in PY in corporate bonds. BSE’s mkt share in Corporate bonds at 34 pc. BSE executed trades worth 3.75 lakh cr in Govt Secs and T Bills vs 3.44 lakh cr in PY. BSE’s mkt share in Govt Secs increased to 60 pc vs 49 pc in PY
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NCB - G Secs - BSE has launched Non Competitive bidding in G-secs, State development loans and T-Bills which allows retail investors to buy them. BSE launched mobile app called BSEdirect for Individual investors to participate directly in auction of G Secs, SDLs and T Bills. BSE recieved bids worth Rs 327 cr this FY vs 24 cr in PY
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ETFs - BSE has 73 ETFs listed vs 64 in PY. Avg daily turnover was at 20 cr vs 23 cr in PY
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Online platform for retail investors for bidding in Public Debt - enabled the same via BSE direct with a facility to block funds through UPI mechanism for application value upto Rs 2 lakh
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India INX and India ICC - BSE has made strategic investments in India international exchange and India clearing corporation to the tune of Rs 145 cr and Rs 80 cr. ICICI and DCB have joined as strategic partners in these ventures. Discussions are on with other potential strategic investors. India INX positioning itself as preferred offshore platform, open 22 hrs a day for trading. Avg daily turnover in Mar 21 was $ 13 billion - up 1000 times vs Mar 2020. India INX successfully competing with Singapore exchange and Dubai Gold and commodity exchange in some of the India dedicated products such as Index and currencies. One of the primary aims of India INX is to help companies raise funds from capital markets which can be deployed for growth and development of the companies. The platform offers Debt listing framework at par with London, Luxemberg, Singapore etc. Avg daily trading value of INX’s derivatives at $ 6.9 billion. Peak volume was acheved on 10 Mar 21 at $ 30 billion. INX’s mkt share in GIFT city currently at a whopping 97 pc !!!
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Major future opportunities -
Gold Spot Exchange - Govt of India intends to set up an international bullion exchange at IFSC, GIFT city which would lead to better price discovery. In Dec 20, notified bullion exchange regulations paving the way for setting up entire eco system for bullion trading. BSE operates in GIFT city IFSC zone via its Subsidary India INX which is a part of discussions with GoI to set up an Intl bullion exchange in the GIFT city
Insurance Distribution platform - BSE and Ebix Inc ( largest insurance exchange in the world ) have formed a JV and has commenced operations for Insurance distribution. Products include - Auto, Health, Life and Endowment Insurance
Spot platform for Agri Commodities - BSE has set up ENAM ( E- national agri market ) post the Agri sector reforms. Frontier agri platforms ltd ( FAPL ) a company with expertise in Agri mkts acquired 40 pc in BSE-ENAM in Mar 21
Disc : not invested. Studying
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NSE wants to reclaim the lost market share in derivatives from BSE.
Before Sensex50 becomes popular, the enthusiast traders now will move to FINNIFTY on Tuesdays apart from existing Bank nifty and nifty expiry on Thursdays…
NSE is a great to company to invest - Cash rich, no debt, significant moat in the form of network effect and whenever the competitor tries to stay afloat, it throws a curve ball like this 
Discl - Invested 8% of portfolio
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MFC trying to compete with Star Mf’s back-office operations. I get a feeling that AMFI is not happy with BSE being such a huge portion of their inflows, operations etc. And wants to compete before BSE exerts their pricing power.
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Sharing Star MF data over last 3 years:
Source: BSE Star MF - Market Summary
Thanks @hack2abi for your contribution to this.
AJ
Disclosure: Invested in BSE.
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What would be of interest on MF Stars market share, is 2 parts
- Of regular MF investments share, how much does MFSTAR get, compared to other platforms.
- Of the total MF (in/out)flows, how much does MFStar get
Here you go. I had to manually correct some data in the year 2018, by as much as a factor of 10000. Both the dates and value data is erratic from BSE CSV file. If I did not correct the values, they were crazy outliers from the remaining data. So I cannot assure of the correctness of the data in the table below.
If someone can corroborate with their work independently it would be helpful.
Net Inflows are in Cr. Industry data is from AMFI.
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Even if it off by 2-3%, it’s still a fantastic share. And thanks for generating this table. i’ve already bought into BSE in small amounts and will looking at acquiring more.
what is the revenue of BSE from star MF in the last year
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Interesting … More options in Fintec
Spoke Too early … NSE is much ahead
On a year-on-year basis, NSE’s and BSE’s ADTVs were up 23% and 93% respectively.
NSE’s cash segment market share stood at 91.8% in September. This means that BSE has increased its market share from 6+% to 8.2% .
Equity derivatives did halve for BSE.
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Revenue and Profits up 20% and 22% respectively QoQ.
See the results for Q2 here.
Investor presentation here.
AJ
Disclosure: Remain invested.
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Q2FY22 CCT Notes
Star MF
BSE StAR MF, India’s largest mutual fund distribution platform continues to grow at a scorching pace. The total number of transactions on BSE StAR MF grew by 99% to 4.26 crore transaction during September 2021 quarter from 2.14 crore transactions during September 2020 quarter. BSE StAR MF platform is the platform of choice for investments in mutual funds by investors and mutual fund distributors. It continues to witness consistent Net equity inflow over the industry’s net equity inflow. BSE StAR MF platform recorded a Net equity inflow of Rs. 21,524 crores as compared to industry’s net equity inflow of Rs. 39,928 crores during the September 2021 quarter. BSE StAR MF platform stands as a single largest mutual fund platform, which has been able to provide net positive equity inflow to the mutual funds even during times when the entire industry was facing net equity outflow. Even during the month of October 2021, Star MF platform outshone the industry net equity inflow by contributing Rs. 7914 crores as compared to industry’s total net equity inflow of Rs. 5215 crores. In effect, the StAR MF platform contributed more than the entire industry’s net equity inflow suggesting that other platforms and direct connect actually had a outflow.
The revenue is for all the stuff, but equity is where BSE has some stronghold.
The mutual fund industry does not disclose that, but if you look at the pure numbers on equities cash flows, open ended funds, then we seem to be doing pretty large portion because the net numbers of BSE in month of November were like pretty much above the net numbers of the entire industry put together by almost 20%-30%, so we like collected Rs. 7000+ crores in the month on net basis and the industry collected only Rs. 5000 crore, so we are like 40% higher than the entire industry, which means that industry had a outflow, which means they had transactions which were outside BSE StAR MF.
You can only hypothesize, you cannot be sure about why it is happening, its because BSE has around 75,000 distributors which are connected to BSE directly and there are put together with large distributors and e-commerce platforms and all those e-brokers, we have a very large network across India and we are reaching out to the customers and we are bringing customers to mutual fund industry which were not there before and so naturally the new customers or new investors are bringing in funds. The old channels are probably what I call tired channels, some of them are taking their money back and things like that. They may have other usages for that money, but our channels seem to be brining in continuously larger and larger amounts because they are reaching out to newer and newer investors in India and I think this trend will continue for probably next 5-10 years. Despite all this we have probably 6 crores investor accounts or out of say industry as 10 crores folios currently active, 6 crores are with us, that is what I have been told and so we are becoming, in a way, net people who are bringing new investors into the industry.
Sir, a question on StAR platform, for AMCs, it is an additional cost? Because AMC is paying certain fees to us on a per transaction basis, but they are also continuing to pay the distributors who were anyway getting the money earlier, so is it like additional charge or is it like AMCs are taking some money from the distributor pool and passing it to the platform?
You are in a, what I call, conceptual world where you think the manual processes which the AMCs were doing with their distributors was coming at zero cost. My estimate is each application physical, the AMCs are paying and were paying more than Rs. 300 per transaction.
Then Sir our charges are much lower, if that is the number that is getting substituted or getting paid then what is the reason that on a per transaction basis, why we are pricing it so low or the industry, if there are competing platform?
It is very similar to a rich woman paying large sums for the designer clothes, but still haggling for the vegetable vendor.
Agri
BSE E-Agricultural markets, a JV between BSE Investments and Frontier Agriculture Platforms Private Limited, operates a nationwide electronic, institutionalized, transparent commodity spot trading platform to facilitate spot agricultural commodities transactions across value chain consisting of producers, intermediaries, ancillaries business, and consumers. It has already enrolled 690 members including 442 farmers, 238 traders, and 10 FPO members. Trades worth Rs. 75.68 crores in 3 agricultural commodities were executed on the platform during the quarter ended September 30, 2021. The company is working closely with Government and Government enterprises to enhance the efficiency of procurement and sales of the commodities. Considering the market and opportunities, this platform is expected to grow at a faster pace in time to come in both agricultural and non-agricultural segments. The company received regulatory approval for enabling spot trading of non-agriculture commodity as well.
Power Exchange
As informed in our earlier call, the power markets regulator, CERC has granted registration on May 12, 2021, to Pranurja Solutions Ltd to establish and operate a power exchange. In order to brand itself as a power exchange, the company is in the process of changing its name to Hindustan Power Exchange Limited. The company proposes to commence live operations in the last quarter of financial year 2021-22. BSE has a stake of 22.61% in the proposed power exchange through its wholly owned subsidiary BSE Investment Limited as of date.
For me the projections are usually away from reality right. I have also told you our investment philosophy earlier on several occasions, which is basically, we try to invest very little and we try to buy optionalities. It is like paying premium for a large outcome, so we do not try to work on this sort of models and it does not work in markets where things can change really scale up. If you are successful then no amount of projections, which is linear. will help, it is non-linearity that comes in and so those kind of projections for me are good for traditional manufacturing type of companies, so if this is successful it would be immensely successful. If it is not, then our money invested is very little, that is how we do these activities either it is in GIFT City or it is in INX or it is in agricultural markets anywhere because we own our technology.
For most people, the cost of technology is humongous, you might like to check out finally if and when the new technology is implemented in a competing listed exchange. Our total cost was I think probably Rs. 3-4 crore of implementation and the entire software came to us in probably Rs. 12-13 crores if I recall correctly few years back, same software, it is not even different software. You will see like 10X, 20X, 100X kind of numbers and so we own our technology. We changed it ourselves and so we are trying to go into newer markets using most of our technology, of course where required we also buy software from other some components or entire thing.
In fact, recently we gave our software to start a new exchange in Mauritius which is a panAfrican exchange called AFRINEX. In fact, it was inaugurated two weeks back by their Prime Minister and so we do own our technology, and we think we are able to provide at least 10X kind of numbers, competitive advantage, to the new entity which we set up in any market and even in operations, we are like very, very smart as a team and that is where I think some of this business if they grow up like what happened to StAR MF then we are able to operate at a cutthroat, very low cost number, so that even if we get a very low revenue we are still profitable in those business lines and then when you survive profitably for long, you are able to reap rewards in the long run so those are the philosophy within which all these new investments happen, including the power exchange you asked for
BASL
SEBI has granted recognition to BASL as a regulatory body for administration and supervision of investment advisors. BASL has commenced registration of investment advisors. Being allowed to act as a regulator to regulate conduct of a group of intermediaries in the financial market through a subsidiary is a strong reflection of BSE’s capabilities and regulator’s confidence in the governance at BSE.
INX
It is a good question, basically this is a very time sensitive market and people compete on fourth decimal for getting value out of it and so any time if you are giving incentive and other party is not, the market actually transfer there. Although we may be able to more efficiently do it vis-à-vis our competition that does not mean that basically we start charging and those people continue to pay, the market will shift to them, that is for sure. Second thing is they already have a Singapore connect, which is also going to come and it remains to be seen how it happens and what happens and then probably after looking at it for the longest period, we will have to take a decision. Currently, you would not want to give up the markets where you have a largest share and sort of handover to somebody for smaller amounts.
BSE vs SGX - Better technology, better services, lower cost or currently zero cost and a product called BSE 50, which is an index which is a pretty interesting index you might like to take a look at it, so there are many things which we are playing for and we hope that our products will continue to overcome all the other things that may be thrown at the members and the investors going forward. We also of course are trying to start a new framework for connecting to other markets through INX’s subsidiary, so let us see how far that we go there also.
as you said this the trades on INX are very sensitive to the fourth decimal place, and therefore, even having more than 95% share, it is tough to really charge till our competitor starts charging, so the question is if the competitor has only low single digit market share then what is the incentive for the competitor to charge and if they do not charge, then how do we really monetize all that we have invested so far in INX?
Basically, we have started charging for the bond listing and we have listed $ 54 billion of bonds in INX over last one-and-a-half to two years since we started listing, so we will charge at appropriate times for example in StAR MF, we started around 2009 end and we started charging around 2017-18 and there was tremendous fight till last year. In fact during COVID only, we finally agreed with AMFI at a very low cost to provide that services to everyone and after that disputes got over, so this is a industry which is very price competitive, price sensitive, and when you get a chance, you start doing it, but you end up investing over a longer period because you do not invest in plants and machinery, but you basically invest in creating markets. And as and when you think you have a good market power, you start charging what is reasonable. If you become unreasonable, many times people run away, sometimes they do not run away, so sometimes it may give you a wrong impression, as normal observer, that people once they have market monopolies, they can charge infinitely, my understanding is that modern world does not allow that luxury to anyone and so whatever we do has to be basically what we call market clearing price as and when people start charging, as of now, it is zero or negative and that is how we need to continue to provide our services at that price.
Is charging INX a few years away?
Correct, but in the meantime because of those transactions, the listings are coming and possibility is that equity listing may start happening and so there again people will start coming, so you make money, like as I told you even in BSE’s case, a very large chunk of our revenues are related to listings and that helps us defray our cost to a large extent and that helps us have a very consistent profitability, which is not true with other situations, which are in listed space in Indian markets right, so you need to keep this all in mind.
Balance Sheet
It is like this that these liabilities represents the clearing and settlement liability and they represent and they are offset by the cash in books so whatever short-term FDs we put and fixed deposit and cash balances, they are the one’s which offset these liabilities and these are very temporary overnight clearing and settlement liabilities which is there pending settlement of a particular settlement.
Mixed Execution & Interoperability
Basically, there are two things, one is the best price execution, other is the interoperability. On both these issues, we had decided to charge some penalty because both are SEBI regulations, which people were not observing and nothing much was happening and so to some extent some members have already complied, some members have not complied fully, some members have complied partially but it is a work in progress I would say and as and when it becomes sort of more truly implemented then you will see that BSE also the percentage actually starts going up like what has happened in last quarter.
Whatever appropriate penalty that is written in the circular and subsequent updates about those circulars, those will be charged or that is getting charged as of now, and that goes to IPF. BSE does not earn of the penalty. Many times the analyst may write or newspapers may write that because BSE’s cash flow has gone up seemingly out of nothing, then it might be due to penalty, it is not, so I just wanted to clarify.
Penalty will be charged from March 31st.
Insurance Broking
Ebix is basically, in US, it is a software company and also a market operator for insurance, they provide software to insurance companies for selling their insurance for settlements and all those of things, so in India we have this joint venture to distribute insurance products on retail basis using the physical plus digital framework that is we have connectivity to several life, general, health, all sort of companies and customer or rather intermediary, which is called POS as per the license, point of sale person, is able to see all the, he can punch in or she can punch in the data of the potential customer or for example, a car, you want to have a insurance for that car, your insurance agent who is called POS punches in data of your car, all the details of that car comes and then based on the car’s conditions with available public data, we send it to 5-10 companies which do this car insurance and get you all those quotes of those 5-10 companies with all their conditionalities and then your agent is supposed to show you that and then as and when he or she places order with your credit card or bank payment, it happens in real time and so you get your insurance within few seconds after analyzing the advisor that is the point of sale person, advising you also on what is good.
Although something may be cheaper, it may not be correct for your condition. And so you are able to buy life insurance, health insurance, general insurance, all such of insurance on that on real time with your insurance policy also coming to you at that moment only, you do not have to wait. You do not have to go to other website of an insurance company to actually do it which is what many of this portal seem to be doing, but we have a completely integrated platform and we also provide our point of sale agents ability to help you in claim processing because it is easy to buy insurance, but try doing claim processing as a normal sort of a person, it becomes very difficult unless you have some handholding and so we provide this end-to-end framework without burning money that is the framework of splurging money which we do not believe in although many of the market participants, even the investor, seem to believe in those. We think money should not be splurged and so we try to keep our cost controlled, we try to give the best facilities, which are end-to-end and that is where the BSE comes with its conservative framework and Ebix basically comes with its own software which we use along with some of the BSE software to provide these services.
Gold Spot Exchange
Gold exchange at Gandhinagar, new joint venture between India International Exchange, India International Clearing Corporation which are two of the BSE’s subsidiaries along with NSE, MCX, CDSL and NSDL have set up a new gold bullion spot exchange and the technology of that exchange is also even operations are going to be provided by BSE Technologies, but it is a joint venture and it is currently doing mock testing and as and when it is inaugurated, it will start trading, pretty much all the technical features are in place and mock trading is going on for more than three-four weeks now and as and when it is inaugurated based on the convenience of everyone that is the time it will be doing.
The spot exchange in domestic area, the current SEBI regulation, which were announced recently seemed to suggest that the exchanges may be able to do it within their existing exchanges itself. And as I told you in the GIFT City also we are providing the technology, so we are pretty much ready with the technology, so as and when the actual detailed approvals and regulations are in place, once we get approval, we can start. So I do not know the timeframe for that but whatever the time, we should be amongst the first few exchanges to launch this market as we are totally ready for those kind of and yu might recall six-seven years back, we were the first to move this idea of spot gold exchange in India and so we have been working since then for that.
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Do they sell software and support to other exchanges… If so will that be a new stream of revenue to BSE… And will SEBI allow it?
The main reason NSE have been dominating in Equity cash and Der is due to liquidity… If interoperability and best buy is implemented by all brokers, few volume mihht move from NSE to BSE…
I agree that still many big old players prefer to trade only with NSE since they have been doing for years… The new players and people who wish to earn little more money through arbitrage will use BSE too…
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