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Trade Cautiously in Around 480 Illiquid Stocks: BSE, NSE to Investors

A man wearing a protective mask walks past the Bombay Stock Exchange (BSE) building in Mumbai, India, March 13, 2020. REUTERS/Francis Mascarenhas/File photo

A person sporting a protecting masks walks previous the Bombay Stock Exchange (BSE) constructing in Mumbai, India, March 13, 2020. REUTERS/Francis Mascarenhas/File picture

Illiquid shares are these that can’t be offered simply as a result of they see restricted buying and selling. These shares pose increased dangers to buyers as a result of it’s tough to search out consumers for them as in comparison with often traded shares.

  • PTI
  • Last Updated: April 9, 2020, 11:20 AM IST

To safeguard pursuits of buyers, main inventory exchanges BSE and NSE have suggested their members to take additional warning whereas buying and selling in almost 480 illiquid shares.

Illiquid shares are these that can’t be offered simply as a result of they see restricted buying and selling. These shares pose increased dangers to buyers as a result of it’s tough to search out consumers for them as in comparison with often traded shares.

In similar-worded circulars, each the exchanges suggested their buying and selling members “to exercise additional due diligence while trading in these securities either on own account or on behalf of their clients”.

BSE and NSE have listed out 440 and 38 illiquid shares, respectively, the place extra due diligence is required.

Illiquid scrips listed by each the exchanges embody Shyam Telecom, Global Offshore Services, DCM Financial Services, Creative Eye and National Steel and Agro Industries.

Based on the buying and selling exercise from January to March, these scrips will probably be traded in periodic name public sale mechanism from April 13, the exchanges famous.

The standards for shifting securities in periodic name public sale mechanism is set in session with Securities and Exchange Board of India (Sebi) and utilized uniformly throughout the inventory exchanges and reviewed periodically.

In December 2014, the market regulator had relaxed norms for buying and selling in illiquid shares. The transfer was geared toward shifting numerous illiquid scrips to regular buying and selling session from the periodic name public sale, the window the place these shares are presently traded.

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