Street Signs: Markets enter bullpen, SBFC Finance GMP at over 60% & more

Markets enter bullpen: Aim at swinging for the fences

Just when it looked like the benchmark National Stock Exchange Nifty would breach 20,000, the index saw a pullback to the 19,560 level amid selling by foreign portfolio investors. Analysts say the index will find it challenging to surpass 20,000 quickly and could consolidate around current levels. Riches Vanara, technical and derivatives analyst at StoxBox, says the Nifty has found support around its 20-day simple moving average of approximately 19,577. As long as it holds above this level, the bullish strength is intact, he adds. On Friday, the Nifty closed at 19,646. “From the current level until the Nifty breaks below 19,550, no directional downmove is expected. Below 19,550, the index may fall towards 19,300. Resistance on the higher end is placed at 19,700,” observes Rupak De, senior technical analyst at LKP Securities.

NSE sounds off about ‘noise creators’ with higher penalty

The National Stock Exchange has revised upward the penalties against those pumping excessive order messages, known as ‘noise creators’ in industry patois. Noise creators have no intention of executing any trades but keep modifying and cancelling their orders to distort stock prices. The revised penalties range between Rs 20,000 and Rs 1 lakh per day for repeated violations by non-algorithmic (algo) accounts pumping excessive orders. Further, the bourse will penalise algo accounts for pumping excessive orders but having a nil or low trade count. Algo orders placed as market orders on the exchange will also be fined up to Rs 1 lakh per day under the market price protection check mechanism.

SBFC Finance commands grey market premium of over 60%

Private equity firm Arpwood Partners-backed non-banking lender SBFC Finance’s shares were seen commanding a grey market premium of more than 60 per cent ahead of its initial public offering (IPO). The Mumbai-based new-age financial institution’s IPO is set to open on August 3. SBFC, which serves entrepreneurs and the owners of micro, small, and medium-sized enterprises in India, is also backed by Clermont and Malabar Group. It is looking to issue Rs 600 crore worth of fresh shares in the IPO. There were also secondary share sales worth Rs 425 crore by Arpwood and a few others. The company had pruned the issue size to align with market conditions. According to reports, SBFC’s IPO was earlier envisaged as a Rs 750 crore fresh issue and an Rs 850 crore secondary share sale. A reduction in size and a raft of good listings have improved the prospects for SBFC, say market analysts. However, in the run-up to the IPO, HDFC Mutual Fund (MF), ICICI Prudential MF, and SBI MF have invested Rs 90 crore at Rs 57 per share, valuing SBFC at Rs 5,400 crore.