India’s top two stock exchanges NSE and BSE today asked market traders to be extra-careful about trade in about 2,000 securities,sensing a high-level of risk in executing trade on these counters.
While most of these securities are little known,NSE has also listed stocks of well-known stocks such as 3M India,Arrow Textiles,AstraZeneca Pharma,Celebrity Fashions,Cyber Media,Emkay Global Financial Services,Heritage Foods,Mukta Arts,Kirloskar Industries,Salora International and Vipul. In separate circulars issued today,the Bombay Stock Exchange and the National Stock Exchange today released lists of securities found to be “illiquid” on their platforms and asked the market “to exercise additional due diligence while trading in these securities either on own account or on behalf of their clients.”
Such stocks are identified on the basis of their liquidity being very low,thus,enhancing the risks for the investors in finding buyers or sellers. The illiquid stocks are traded infrequently and any large deals in these stocks can cause huge fluctuations in their prices.
While BSE listed out as many as 1,987 securities in its list of ‘illiquid securities’,the NSE found 260 such securities being traded on its platform. There are many stocks that are common on both the lists.
SEBI has directed the two exchanges to draw up a list of illiquid securities every month based on criteria jointly decided by SEBI,NSE and BSE.
The number of illiquid securities has gone higher at both BSE and NSE from the month ago level. BSE had listed out a total of 1,907 illiquid stocks,while there were total 237 such securities at NSE last month.
While more than 7,500 securities are listed on BSE,the total number of listed securities at NSE is much lower at about 2,300.
Those termed as illiquid stocks this month by BSE also include Crisil Ltd,Pantaloon Retail (India) Ltd,Kinetic
Engineering,Modi Rubber,Advani Hotels & Resorts,Alfa Laval India,Batliboi,Chemfab Alkalis,Cinevistaas,Creative Eye,Cambridge Technology and Deccan Cements.
There are also names like Gokaldas Exports,Gujarat State Financial Corp,Kalyani Forge,Uniply Industries,Chettinad Cement,Oriental Hotels and Mysore Petro Chemicals.