Over 50 stocks moved to ‘restricted’ trade since April

Concerned over any possible manipulation in stock markets, bourses have identified more than 50 companies so far this fiscal for only restricted trade.

The decision to move stocks to ‘trade—to—trade’ segment — where no speculative trading is allowed and delivery of shares and payment of the consideration amount are mandatory — was taken after a sharp move of up to 107 per cent was noticed in small period in their share prices.

According to the BSE, the exchange has shifted 57 stocks to the trade-to-trade segment since April 1, 2012, while the NSE has also moved many stocks to this segment.

The move is part of the preventive surveillance measure taken by bourses to ensure the market safety and to safeguard the interest of investors, as surge in these small and midcap stocks was not in line with the market’s overall bearish mood.

Also, the exchange has advised exercise of caution while trading in these stocks.

Besides, these stocks attract a low circuit filter — the maximum permissible limit within which the share price can move — of up to 5 per cent.

Market analysts believe that stocks are being shifted to the ‘trade-to-trade’ segment, as prices may be moving sharply on speculative activities without any fundamental support.

There are also fears that the market operators could be pushing up or beating down the stock price in consultation with the company promoters.

“There is no fixed guidelines about shifting any stock to ’T’ group. A scrip is shifted after a sharp rally in prices due to speculative activities, which were not supported by fundamentals,” CNI Research Head, Mr Kishor Oswtal, said.

Another market analyst, Mr Vivek Negi, Vice President (Research) at Wellindia, said, “If a stock is being shifted to the ‘T’ group, the exchange takes into account various factors like performance of a company in the last six month and corporate governance issue.”

While shares of most large-cap companies have been moving in a narrow range in the current fiscal (2012—13) so far, shares of many mid, and small—sized companies have risen sharply during the same period.

Out of the 57 stocks shifted by BSE to the T group, mostly there has been a sharp move upward, while in some cases the shares prices have witnessed a significant fall.

While the gains have been as high as 107 per cent, the BSE’s sensitive index Sensex has gained about six per cent so far in the current fiscal.

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