Dec 14, 1999|
BSE slaps margins on stocks to curb volatility
Small-sized infotech, finance stocks have attracted special margin in the last settlement on the Bombay Stock Exchange (BSE).
According to a report in a leading financial daily, BSE has slapped a special margin on low profile infotech and finance stocks in B1 and B2 group so as to restrain volatility. Total number of scrips that have attracted margins amount to 70, as compared to 51 in the previous settlement. A few months ago, only 25-30 scrips were targeted by the BSE for special margins.
The recent trend in rising share prices, even of companies lacking merit, does not bode well for the investment community. While everyone is happy when the stock is appreciating, a steep downfall in stock prices, alarms the genuine investors. This affects the sentiment of the investment community, and genuine investors shun the markets. This is what had happened in the immediate aftermath of the stock scam in 1992. In view of the increasing volatility, the only option left for the stock exchange is to impose a margin on specific companies.
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