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Our Bureau

Mumbai, Jan. 6

The number of stocks not traded on a daily basis in December on the stock exchanges constituted close to 25 per cent of the total number of scrips listed on the two major bourses – NSE and BSE.

Illiquid shares are those in which the trading frequency is less than 80 per cent of the total trading days in the previous six months.

On NSE, there were 397 illiquid stocks between December 1 and December 31, said a circular from the exchange, where there are 1,621 stocks available for trading. On BSE, 1,836 of the 7,740 listed stocks were illiquid in December, said a circular from that exchange.

The list of illiquid stocks on NSE includes some well-known names such as Bajaj Electricals, Blue Dart Express, Gokaldas Exports and Ramco Systems.

There are also some exchange-traded funds of the asset management companies such as Franklin Templeton Capital Protection Oriented Fund that figure among the illiquid stocks.

Stock exchanges have advised their members to take extra precaution while trading in these illiquid shares.

“Trading members are advised to exercise additional due diligence while trading in these securities either on own account or on behalf of their clients,” said a BSE circular.

Stock exchanges have been directed by SEBI to review the list of illiquid securities on a monthly basis, the BSE circular said.

It is important to note that trading volumes are typically lower on the bourses in the latter half of December on account of reduced trading activity, as institutional investors are on holiday.

Even the number of shares traded on the BSE had dipped to just around 2,000 stocks or below on some trading days in December as compared to an average of 2,414 shares traded in November.

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