 "BANKEX expiry Friday to boost BSE volumes: Hemang Jani of Finazenn explains")
BSE share price today after Sebi F&O proposals: BSE share price advanced 8.1 per cent to Rs 2,607.7 per share on the National Stock Exchange (NSE) on Wednesday, July 31. The rally comes amid market regulator Securities and Exchange Board of India's (Sebi's) crackdown on derivatives trading.
At 11:45 AM, BSE share price was trading 6.7 per cent higher at Rs 2,574 per share. By comparison, the NSE Nifty was up 0.28 per cent.
Sebi, on Tuesday, proposed several changes in rules around Futures and Options (F&O) trading in a bid to strengthen the framework for increased investor protection and market stability. The objective, Sebi said in its consultation paper, is to ensure sustained capital formation.
Among the notable proposals, Sebi pitched to reduce the number of weekly option contracts to one benchmark index per exchange i.e. total of 6 weekly contracts in a month (vs 18 currently).
According to Hemang Jani, founder and director of Finazenn, if NSE chooses Nifty and does expiry on Thursday, while BSE chooses BANKEX and does expiry on Friday, it will lllow part of the current volume to move to BSE, and it will emerge big winner.
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"Besides, if Sebi allows just one expiry on the same day (across BSE NSE), say on Thursday, then it would cause a drop in overall volume. BSE is the winner in both scenarios," he said on social media platform X (formerly Twitter).
BANKEX weekly expiries happen every Monday, at present.
Currently, weekly premiums make up 65 per cent of overall industry premiums and depending on the choice of one index (to be continued) by exchanges, supply of contracts amounting to 35 per cent of industry premiums can be removed, analysts expect.
Currently, weekly premiums make up 65 per cent of overall industry premiums and depending on the choice of one index (to be continued) by exchanges, supply of contracts amounting to 35 per cent of industry premiums can be removed, analysts expect.
Similarly, Motilal Oswal has maintained a 'Neutral' rating on the BSE stock, while IIFL Securities said with just two expiries now, BSE may see higher volume traction and faster market share gains.
That said, analysts said they await clarifications from Sebi on the said proposal and would wait to see how the regulator fixes expiry days.
"For BSE, removal of BANKEX weekly contract can impact earnings per share (EPS) by 7-9 per cent over FY25-27. However, gains from spillover of trading activity from discontinued products, if any, can offset EPS impact. In the event of moderate industry-wide impact of Sebi measures, there may be EPS upgrades," noted analysts at Jefferies in a note.
Weekly option premium from BANKEX, as per Jefferies, constitutes barely 2 per cent of overall option premium income. It, however, makes for 22 per cent of BSE's premium income (78 per cent is cornered by Sensex).
Jefferies had earlier estimated BANKEX to contribute around Rs 1,700 crore as premium turnover income in FY25, out of the total income of Rs 6,800 crore for the BSE.
"In our bear case, where there are no spillover gains, we expect BSE's EPS to fall to Rs 79 in FY26, from the current EPS expectation of Rs 86. However, if there are some market share gains coming over from discontinued products into Sensex, we expect EPS to come at Rs 84 (15 per cent market share gain), Rs 93 (20 per cent market share gain), Rs 103 (25 per cent market share gain," Jefferies said.
Jefferies as a target price of Rs 3,100 on BSE stock. Risks emanate from incremental regulations and heightened competition, it said.