India’s top two stock exchanges National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) today sent a warning to the stock exchange participants,asking marketmen to be extra careful about trade in over 1,900 securities,sensing a high-level of risk in executing trade on these counters.
While most of these securities are little known,there are also stocks of some well-known companies such as Asian Hotels,IRCON International,Arrow Textiles,AstraZeneca Pharma India,Celebrity Fashions,Cyber Media,EIH Associated Hotels,Mukta Arts and Zodiac Clothing Company.
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 marketmen “to exercise additional due diligence while trading in these securities either on own account or on behalf of their clients.”
While BSE listed out as many as 1,907 securities in its list of ‘illiquid securities’,the NSE found 237 such securities being traded on its platform. There are many stocks that are common on both the lists.
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.
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 1,814 illiquid stocks,while there were total 204 such securities at NSE last month.
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.
Those termed as illiquid stocks this month include Advani Hotels & Resorts,Alfa Laval India,Batliboi,Chemfab Alkalis,Chettinad Cement,Cinevistaas,Creative Eye,Cambridge Technology and Deccan Cements.
There are also names like Emkay Global Financial Services,Gokaldas Exports,Gujarat State Financial Corp,Heritage Foods Kalyani Forge,Uniply Industries,Kinetic Engineering,Kirloskar Industries,Oriental Hotels,Salora International and Mysore Petro Chemicals.