Trading volume reveals investors’, arbitrageurs’ interest

Shares of the CPSE Exchange Traded Fund (ETF) made a stellar debut on Friday, both on the price and volume fronts.

The ETF ended 11.17 per cent higher at ₹19.40 on the NSE as against the issue price of ₹17.45. In intra-day trades, it touched a high of ₹19.43.

Especially significant was the high trading volume, signalling investor/ arbitrageur interest, as 8.35 crore shares changed hands during the day. Of this, 7.07 crore or 84.75 per cent shares were up for delivery.

CPSE ETF comprises stocks of 10 public sector enterprises -- ONGC, GAIL (India), Coal India, REC, Oil India, Indian Oil, Power Finance Corporation, Container Corporation of India, Bharat Electronics and Engineers India.

The new fund offer, which closed on March 24, attracted bids worth ₹4,400 crore against the Government target of raising ₹3,000 crore.

About 40,000 investors put in funds through the new fund offer.

As the ETF served as an additional and effective mechanism to monetise its shareholdings in public sector companies, the Government is likely to come up with more such exchange-traded funds comprising shares of public sector units as part of its divestment programme.

“May be in the coming times, we will introduce more such ETF products because the main idea behind launching the CPSE ETF was to do the disinvestment programme in a manner in which markets are not disrupted. So, once having achieved that (purpose), this process can be taken forward,” a PTI report quoting Alok Tandon, Joint Secretary in the Department of Disinvestment, said.

(This article was published on April 4, 2014)
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