BSE Revenue Hit From NSE F&O Expiry Shift Triggers Goldman Target Price Cut
Goldman Sachs maintained its 'neutral' rating on BSE Ltd. while trimming the target price to Rs 4,230 with a 5% potential downside. The lowering of the target price follows NSE's announcement to shift its F&O expiry day from Thursday to Monday.
This change significantly impacts BSE's potential to expand its index options market share, according to the brokerage, as it is a crucial revenue driver for the exchange. For BSE, approximately 50% of its topline is sourced from options trading.
Previously, BSE had seen notable gains in market share when NSE's expiry was Thursday, while BSE's was Tuesday. However, the new alignment is expected to lower this advantage.
How NSE's Move Affects BSE
According to Goldman Sachs, NSE's shift of its F&O expiry day to Monday will negatively affect BSE's index options market share. This change will erode BSE's recent gains broadly driven by the fact that its expiry day was different from NSE's. It said that more liquidity buildup in BSE's contract was expected and not an expiry date change.
On the back of this, the brokerage had anticipated a 30% uptick in BSE's market share. This stands affected as the bulk of trading happens on weekly expiry days.
"Within the various weekdays, BSE had up to 20% market share during Fridays and Mondays, up to 40% share on its expiry day of Tuesday. And up to 7% share during Thursdays and Wednesdays," according to the brokerage.
Impact Of Expiry Day Change
The expiry day change from NSE is set to reduce BSE's potential to gain more market share. Although uncertain to predict, the analysts estimate rough futures market shares for BSE to be up to 7% during Mondays, up to 13% during Wednesdays, Thursdays and Fridays. It anticipates up to 50% share during Tuesdays.
This analysis is based on the relative size of premium per contract between the two exchanges, said the brokerage. This potential share cap would act as a loss of tailwind for BSE's topline, on top of the shrinking industry volumes within options trading, said the brokerage. This change would act as a headwind for the firm as other regulations continue to tighten the F&O trader base.
-
High US Salaries, No Green Card Certainty: The Financial Calculation Facing Indian H-1B Families
The suspension of PERM processing at eight technology employers does not cancel existing H-1B visas. What it does is force a question many Indian families have been avoiding: is the US salary worth tying your career and family plans to one employer?
-
Swiggy vs Eternal: Food Delivery's Two Rivals Are No Longer In The Same Race
Eternal is building a private AI assistant, dark.ai. Swiggy is still working out how to make Instamart pay, with an operating loss of Rs 895 crore in the July-September quarter while Blinkit stayed profitable.
-
Where You Live Shapes How You Get To Work | The Reason Why
Two-wheelers are the most popular way to get to work in India, accounting for nearly 43% of workplace commutes.
-
Unhedged Position: Can India See An Indonesia-Style Time Correction?
The Nifty is trading below levels it first clocked in 2024. Is there, then, as I have suggested in the headline, potential that the current time correction drags on painfully for the next three-five, even ten years?
-
Navigating Friction And Energy Realities: An Analysis Of Marco Rubio's October Visit To India
Occurring at a critical juncture marked by stalled trade negotiations and escalating geopolitical pressures over global energy supplies, the visit offers a profound window into modern US-India relations.
-
India Exports Capital. Why Not Export Trusteeship?
The big question, then, is whether India can build an institution that global borrowers, investors, banks, and lawyers can trust, even without an Indian connection.
-
France's Economy & Politics Are In Crisis | The Reason Why
Let's look at how the French economy and politics evolved under Nicolas Sarkozy, Franois Hollande and Emmanuel Macron.
-
You May Inherit The Business. You Must Earn Its Credibility.
Succession tests the founder's ability to share authority as much as it tests the next generation's readiness to assume it.
-
Signing Deals Is One Thing; Making Them Work Is Another | The Week In Whys
Sometimes, things don't turn out as planned. Indian companies have lost some bids to rivals, some projects won't produce until 2030.
-
FOMC Wall, PERM Suspension, Hospital Stocks | Talking Points This Week
A PERM suspension would directly affect green-card sponsorship rather than H-1B visas, so the near-term earnings impact could remain relatively limited. The key question is whether this marks a new phase in US scrutiny of Indian IT.
