With the National Spot Exchange (NSEL) crisis not showing any signs of abating in the immediate future, brokers in the stock market are trying to make a quick buck by betting on the shares of Financial Technologies (India), which owns the spot exchange.
According to data from Capitaline, the counter of FTIL has seen a sudden spurt in the number of day trades in the last few sessions as brokers that typically focus on proprietary trading are trying to cash in on the steady flow of bearish news related to NSEL, which is a wholly-owned subsidiary of FTIL.
The current month has seen entities like Crosseas Capital, Way2wealth Brokers, N K Securities, CPR Capital, Genuine Stock Brokers, Marwadi Shares & Securities, Pace Stock Broking, Adroit Financial Services, CD Integrated Services and Quadeye Securities all executing day trades in the counter at regular intervals. ?NSEL accounts for a major share in the revenues and profits of FTIL and any negative news-flow related to the spot exchange is bound to impact the counter,? says Arun Kejriwal of KRIS. ?While the volumes have gone up, there has been no corresponding rise in the delivery turnover, which clearly hints that speculative activity has increased,? he adds. According to Bloomberg, the share of delivery turnover of FTIL has dipped to less than 10% in the last couple of days from as high as 35% in some days of May and June. Shares of FTIL have lost nearly 70% in just five trading sessions starting August 1. On Wednesday, FTIL closed at R168.10, down 5.62%.
Shares of the Jignesh Shah-controlled entity were trading at R541 on July 31, when NSEL announced it had suspended trading in all contracts, barring e-Series. On Tuesday, the spot exchange announced that even the e-Series contracts have been suspended, thereby bringing the bourse to a complete standstill. FTIL has also witnessed increased trading activity in the derivatives segment on the National Stock Exchange (NSE) since mid-July after the NSEL issue came in the limelight. The combined turnover of FTIL F&O products between July 12 and August 6 jumped three-fold to R145 crore.
