Badla picks up on BSE

MUMBAI, January 3: Badla (carry-forward) transactions have started picking up on the Bombay Stock Exchange (BSE). The net outstanding value ...

MUMBAI, January 3: Badla (carry-forward) transactions have started picking up on the Bombay Stock Exchange (BSE). The net outstanding value of carry-forward deals in the previous settlement for the first time crossed the Rs 300 crore mark and touched Rs 361.26 crore. This indicates the growing popularity of the new carry-forward system introduced in November last by the BSE.

It may be recalled that the SEBI had approved the modified carry-forward system following the request of BSE by reducing the daily margins and enhancing the overall limits. In view of the favourable changes made in the scheme, more and more investors have started participating in the carry-forward business. The badla business in the previous system used to be in the range of Rs 150-200 crore.

Meanwhile, the new year saw the carry-forward rates (interest rates to carry forward deals from one settlement to another) on the BSE zooming to touch a high of 25 per cent (on an annualised basis) indicating the over-bought position in the market. In the absence of FII selling, speculators were building up fresh positions in select counters. In an attempt to introduce transparency, the BSE has now provided details on the actual carry forward quantities, segregating the purchase and sale positions for individual stocks.

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As per the figures collated by the BSE, the net purchase carry-forward value touched a high of Rs 349.46 crore and the sales carry-forward value stood at Rs 125.06 crore.

Of the 99 odd stocks offered at the carry-forward session, only 3 stocks attracted backwardation. Among the pivotals, Telco attracted a backwardation charge of Rs 0.10 for a total outstanding position of 2.15 lakh shares. Gujarat Alkali attracted a backwardation of Rs 0.20 (weighted average) with a net outstanding position of 5,550 shares. IPCL also attracted a backwardation of Rs 0.40 at the hawala price of Rs 74.

Among the heavy-weight stocks, ACC attracted the lowest carry forward charge of 13.76 per cent (annualised) for a net outstanding quantity of 32,085 shares valued at Rs 4.48 crore. Pivotals like SBI emerged to attract the highest carry-forward charge of 28 per cent (annualised) for a net outstanding quantity of 5.35 lakh shares valued at Rs 13.46 crore.

Reliance however, attracted a lower carry forward charge of 16.94 per cent at a weighted average badla rate of Rs 0.60. Tata Tea attracted a carry forward charge of 23.44 per cent for net carry forward purchase quantity of 5.03 lakh shares and the carry forward sale quantity of 2.42 lakh shares. BHEL attracted a carry forward charge of 23.31 per cent, Colgate 24 per cent at a weighted average badla rate of Rs 1.30 and HDFC 24.96 per cent.

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“Punters — both local and institutions — have built long positions… profit-booking is expected at every rise,” commented a BSE broker. “As FIIs have remained net sellers, the present rally can only sustain if the domestic institutions continue to buy,” he added.