The Hindu Business Line : B-1, B-2 scrips see rise in trading, turnover

AFTER the cut in short-term capital gains tax to 10 per cent, the number of scrips traded in the B-1, B-2 and Z categories of the BSE is on rise. Along with the rise, there has also been increase in the stock price of several of illiquid counters.

Brokers said that the increase in number of scrips and turnover shows that there has been interest of the market players in small cap and illiquid stocks. They said there has also been sharp rise in the stock price of several scrips in this segment.

"Several players are taking advantage of the changes in tax rate for short term capital gains tax and the rise in the B-1, B-2 and Z groups is part of this," said a broker.

He added that the new changes will come into effect only when the Budget is passed by the Parliament, but warned that several market players have already become active in these scrips.

A look at the trading pattern in the B-1 segment shows that the number of scrips traded increased to 741 today from 729 on July 9 (just after the announcement of Budget proposal). The turnover during the same period jumped from Rs 98.95 crore to Rs 258 crore.

Similarly, in the B-2 segment, the number of scrips traded increased to 927 today from 745 on July 9. Turnover also increased from Rs 6.68 crore to Rs 16.04 crore, a jump of 140 per cent.

The Z-category saw the number of scrips traded going up to 99 from 69 during the same period while the turnover jumped from Rs 0.9 crore to Rs 10.90 crore.

However, in the T group, the number of scrips traded remained almost the same at 7-8 but the turnover increased from Rs 0.03 crore to Rs 0.13 crore.

"It is risky for the overall market if there is sudden spurt in the illiquid and scrips from the Z group. Stock exchanges should take extra precautionary measure in order to avoid such practice in future," said a broker who caters to large number of retail investors.