 "Trade cautiously in 386 illiquid stocks, say BSE & NSE")
To safeguard investor interest, stock exchanges the National Stock Exchange (NSE) and the BSE have advised members to take extra caution while trading in 386 illiquid stocks.
Illiquid stocks cannot be sold easily because they see limited trading. These pose higher risks to investors because it is difficult to find buyers for them.
In similar-worded circulars, NSE and BSE advised trading members “to exercise additional due-diligence while trading in these securities, either on own account or on behalf of clients”.
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NSE and BSE have listed 29 and 357 illiquid stocks, respectively, where this is required. Illiquid scrips listed by both exchanges include Goldstone Technologies, Usha Martin Education & Solutions, Khaitan (India), Pradip Overseas, Todays Writing Instruments Hotel Rugby, Blue Chip India and Gujarat Lease Financing.
The exchanges said periodic call auction would be conducted in the securities with effect from January 11.
These securities are based on trading activity during the period during July-December.
In December 2014, the Securities and Exchange Board of India (Sebi) had relaxed norms for trading in illiquid stocks. The move was aimed at shifting various illiquid scrips to normal trading session from the periodic call auction, the window where these stocks are currently traded.