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SEBI's CAS shake-up boosts BSE shares
15 Sep
Summary
- SEBI proposed changes to the closing auction session impacting trading hours.
- Two options for extending trading hours and F&O settlement prices were proposed.
- JP Morgan upgraded BSE to Overweight with a new price target.
SEBI has proposed significant changes to the closing auction session (CAS), including two options for extending trading hours and new methods for calculating F&O settlement prices. These proposals are viewed positively by market experts, who anticipate they will alleviate concerns surrounding CAS and support a recovery in BSE and related capital market stocks.
Option A suggests extending normal trading to 3:30 pm, with CAS and F&O trading continuing until 3:45 pm. Option B proposes ending normal trading at 3:15 pm, followed by CAS and F&O trading until 3:30 pm. Under both scenarios, the closing price would be determined swiftly, followed by CAS and additional derivatives trading.
Furthermore, SEBI is considering two approaches for F&O settlement prices: one based on the volume-weighted average price (VWAP) of the last 30 minutes plus CAS trades, and another that initially uses the last 30 minutes' VWAP, with CAS inclusion to be assessed later. These potential adjustments aim to address market disruptions that have affected BSE since CAS was introduced.
Global brokerage JP Morgan has upgraded BSE to 'Overweight', citing the expected easing of CAS-related concerns and potential for increased trading volumes. The firm has set a target price of Rs 3,950, reflecting confidence in BSE's recovery path following the SEBI consultation paper. These developments could also influence the National Stock Exchange's IPO prospects.
