• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Virendra Verma

MUMBAI, Dec. 2

WITH the SEBI board giving clearance for adding more securities in the derivatives segment, trading volumes are expected to overtake the cash market, stock brokers and analysts said.

They said the stock exchanges are likely to increase the list for futures and options to around 60-80 securities from the current level of 29 securities on the NSE.

Volumes in the derivatives segment on the NSE have increased on month-to-month basis; on November 28, volumes were Rs 3,113.98 crore, which was 97.37 per cent of the cash market volumes of Rs 3,198 crore reported on the same day. Trading volumes on the BSE, however, have not taken-off so well.

Mr Vineet Bhatnagar, Chief Executive, Refco-Sify Securities, said "Volumes on the NSE's derivatives segment are around 60-80 per cent of the cash market with just 29 securities on various occasions and with additional securities, volumes in the derivatives would cross the cash market".

Prof. J.R. Varma, Chairman, Advisory Committee on Derivatives, said "India is among the very few countries in the world where stock futures have taken-off so well and with additional list of securities volumes would increase".

Mr Anil Desai, Vice-President, ICICI Securities, said "Volumes would increase after the additional list and will further increase with the introduction physical settlement". He said with the physical settlement, number of institutional investors would also be active.

Mr Bhatnagar, however, said there would not be any major impact on volumes after moving from cash to physical settlement. "Volumes have grown in the market with the cash settlement," he said. But Mr Bhatnagar said volumes will get a boost after the reduction in the contract size from Rs 2 lakh.

SEBI would write to the Government for reduction in the contract size.

Asked on the number of securities that would be added for derivatives trading, Prof Varma said the initial sample of securities would be around 300-350 (based on market cap and volumes) and with the criteria of median quarter-sigma order size, the list would get reduced to 100-150 securities. However, he said these are the securities list, that are eligible but the final list of securities would be decided by the stock exchanges.

According to market players the stock exchanges are likely to add 30-50 more securities and taking the total list to around 60-80 securities. Some of the stocks on which futures and options are likely to be introduced are — Zee Telefilms HCL Technologies, Polaris Software, NIIT, Hero Honda. Even some players are expecting Wipro to be included in the list.

Send this article to Friends by E-Mail
Comment on this article to BLFeedback@thehindu.co.in

Stories in this Section
AMFI registration mandatory for intermediaries

Copyright © 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line