BSE Shares Put Under ASM Framework As Stock Price Doubles

BSE Ltd.’s shares have been placed under extra scrutiny to caution investors and deter any speculative trading, following a sharp rally in the bourse’s stock price.

With the inclusion in the so-called additional surveillance measure, trading in BSE shares — listed on its privately held larger rival National Stock Exchange of India Ltd. — will attract 100% margin. Stocks are shortlisted for ASM based on factors such as sharp price movement, high volumes, and concentrated client activity.

BSE’s shares fell more than 3% on Wednesday, the most in about three weeks.

The move comes as shares of Asia’a oldest bourse surged about 130% from their March low, amid BSE’s growing footprint in India’s equity derivatives market and pending initial public offering of NSE. At a market value of about $14 billion, BSE shares are trading at over 36 times the estimated earnings for the coming year.   

The shortlisting of securities under ASM is purely on account of market surveillance and it should not be construed as an adverse action against the concerned company, according to NSE’s website. The stocks usually remain in ASM for more than five trading sessions before further review by exchanges