Shares of broking firm such as Aditya Birla Money, Motilal Oswal Financial Services, JM Financials and Emkay Global Financial Services have surged up to 20% on hopes of the improvement in the business due to current market rally. According to analyst broking is a volume-driven business. If the market sustains, it will instill confidence among investors.
In past one month, Indian equity markets rallied almost 9% and recorded a highest average daily turnover since February. A combined average daily turnover of the BSE and NSE has increased to Rs 14,000 crore in September from less than Rs 12,000 crore between April and August.
“We see signs of the market stabilising and if confidence returns, then a continuation of this rally and a re-opening of primary equity markets could lead to a substantial re-rating of these stocks,” said Santosh Singh and Nidhesh Jain, analysts at Espírito Santo Securities, in a report.
Among the individual stocks Aditya Birla Money (Rs 20.12) and Emkay Global Financial Services (Rs 33.17) have locked in upper circuit of 20% and 10% respectively on the Bombay Stock Exchange.
Motilal Oswal Financial Services too, surged 8% to Rs 118 and JM Financial by 5% at Rs 17.50 on back of over two-fold jump in trading volumes. JM Financial counter has seen huge trading activities with a combined 9.67 million shares have already changed hands on the counter till noon deals against less than four million shares that were traded daily in past two weeks.
