Street signs: ASM stocks worry market players, managing debt ETF, and more

Physical delivery fears dry up volumes

Trading volumes for several stocks in the derivatives segment have been hit following the introduction of physical settlement. Besides the 46 stocks put in the mandatory physical settlement list, volumes in counters beyond the top 100 most-traded list have also seen a drop of over 30 per cent. There are fears the list of stocks for mandatory physical settlement will be expanded.  “Investors are concerned over more stocks being put under physical settlement. We are advising our clients to stay away from such investments. Any further negative news flow around these stocks could lead to significant wealth erosion for investors,” said a broker. 

Pavan Kumar Burugula

ASM stocks worry market players

The Securities and Exchange Board of India’s (Sebi’s) decision to create a list of stocks which would be subject to Additional Surveillance Measures has become a new headache for many players. While the decision was taken to ensure that these stocks do not show any unnatural movement, in terms of sudden rise and fall, some of them have been falling steadily. “Some counters have been hit quite badly as they go from one lower circuit to another. Such a list creates a problem because there is an immediate suspicion amid investors that something is not right with these stocks. And they become extra cautious,” says an investment advisor.

Joydeep Ghosh

Few takers for managing debt ETF

The government is scouting for firms to manage the country’s first debt exchange traded fund (ETF). However, only two advisors Trust Investment and AK Capital Services are in the fray. Industry players say restrictive criteria have led to dropping out of bulge-bracket firms. “The conflict clause has discouraged many players, especially mutual funds. The rules don’t allow the ETF manger to launch a similar product. Fund houses think this could restrict their ability to launch new debt products,” said senior official of a large fund house.

Samie Modak