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Nalini D'Souza
Mumbai, Sept 18: The Securities & Exchange Board of India (Sebi) has decided to closely scrutinise the volatile movements in the price of Zee Telefilms during the first two weeks of September.
According to senior officials of the Bombay Stock Exchange (BSE), a letter to this effect was sent by Sebi to the exchange on September 16. The letter stressed on the need to carry out a preliminary study into the price pattern and volume growth registered at the Zee counter. The report is likely to be submitted to Sebi within a period of five days.
Interestingly, although Sebi has asked for a preliminary report on the price movement for two settlements, the exchange has decided to conduct a detailed investigation in the volume growth in the scrip during the past six settlements. ``This exercise would ensure that the Videocon and Sterlite episode is not repeated once again,'' said a Sebi source.
The Zee Telefilms stock has appreciated by over 23 per cent during the past six settlements beginning August 3 toSeptember 15 on the back of rumours of a imminent merger of Zee Tele with Star TV India. Even as newspaper reports surfaced about the merger and company officials denied any such possibility in the near future, speculators took Zee Telefilms' shares to Rs 700.75 on September 15. The sharp rise from Rs 450 levels to Rs 680 was also attributed to the punting activities at this counter. This also led to a phenomenal rise in its volumes by over 170 per cent, to touch a high of 30 lakh shares on the same day.
According to BSE sources, the investigation is conducted in three distinct phases. The first phase evaluates whether there was any concentration of positions. ``If concentration of positions are recorded, we call for the client business transaction details,'' explained a senior official of BSE.
The exchange has also decided to probe into the actual delivery and carry forward business conducted at the counter. On September 12, the counter had registered a carry forward business of over 4 lakhshares.
Another interesting feature of the entire episode was the actual free floating stock available at the counter which is estimated at less than 20 lakh shares while the counter registered a phenomenal volume of over 30 lakh shares on the BSE on September 15.
Even before the market could receive any official news on the merger, speculators had a free run on the Zee Telefilms counter for more than a month, which was evident from the quotes thrown at the kerb market.
According to marketmen, the current speculative excess was based on the assumption that the upward potential of the stock is somewhere around Rs 900-1150. This was reflective in the manner in which every kerb rate was routed through the official channel.
Interestingly, the counter failed to survive the Rs 700 levels on account of any official word on the merger. After minor corrections of over Rs 50, the stock bounced back to Rs 706 on the kerb market on Friday.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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