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BSE reshuffles A group; turnover exceeds NSE's; card value soars to Rs 17.5m

The Bombay Stock Exchange has announced reshuffling of the 'A' group scrips and decided to include 27 new scrips against the exclusion of 26.

The reshuffling would come into force from September 14, BSE president Anand Rathi told mediapersons in Bombay today.

''The reshuffling was necessitated to reflect current market environment and to impart the facility of carry-forward to more liquid scrips,'' Rathi said and added that the selection has been made by the Index Committee based on the selection criterion framed by the exchange.

The 27 new scrips which have been included belong to healthcare, information technology, oil and gas, media and housing related industries. 26 scrips have been dropped from the existing 'A' group while one scrip had earlier gone out due to merger of Ponds, Rathi said. With this, the total number of scrips in the group will be 150, one more than the earlier number.

Leading share brokers expressed satisfaction over the announcement of reshuffling in 'A' group by the BSE.

In a statement, leading share broker and a member of the BSE, Malini Ajit Sanghvi said that enlargement of a group list reflect emergence of technology oriented new sectors of economy. The information technology and telecom industry gets now more weightage in the A group.

Another leading BSE member said that the BSE would witness sharp rise in the turnover with the reshuffle and by allowing more liquid scrips in the 'A' group.

The market capitalisation of the 'A' group after the reshuffle stood at Rs 3.64 trillion (1,000 billion = 1 trillion; 1,000 millon = 1 billion) out of the BSE's total market capitalisation of Rs 5.84 trillion.

Currently, the market capitalisation of 'A' group is Rs 3.22 trillion out of the BSE's total market capitalisation and works out to 55.23 per cent. After the reshuffle, the 'A' group's market capitalisation as a percentage of the total market capitalisation would stand at 62.27 per cent, Rathi said.

Elaborating on the purpose of 'reshuffling', the BSE chief said that it was done to improve liquidity in 'A' group and considering the current market movements, the Index Committee of the exchange decided to include 27 new scrips.

When pointed out by reporters that majority of the infotech scrips figured in the list of new inclusions, Rathi replied, ''It is the investors' choice who are trading more in some scrips and with their inclusion, it would further boost the volume of turnover in the 'A' group.''

The Index Committee also undertook a review of the BSE-30 index popularly known as the Sensex, but did not effect any changes in it, he said.

The committee is taking quarterly review of the indices and changes would be made accordingly in the future, he said.

According to sector-wise representations, 12 of 27 new scrips belong to IT, three to healthcare, two each two telecom, food and beverages and miscellaneous, two to oil and gas while one belongs to consumer non-durable and one to capital goods.

The newcomers in the 'A' group are: Amara Raja Battery, Aptech Limited, Aurobindo Pharma, BFL Software, Bata India, Bausch and Lomb, Cipla Limited, CMC Limited, Fujitsu ICIM, Global Telesystems, HCL, Infosys, Himachal Futuristics, Hoechst Marrion, India Cements, Indian Oil Company, ITC Agro-Tech, McDowell and Co, Navneet Publications, PSI Data Systems, Reliance Petroleum, Silverline Industries, Software Industries, Software Solutions, Tata Elxi, Tata Infotec, Vikas WSP, Visual Soft and Wipro.

The outgoing securities are: Andhra Valley, Asian Hotels, Balrampur Chini, Ceat Limited, CESC, Essar Steel, Excel Industries, Garware Polyester, Garware Wall, Global Trust Bank, Godrej Soaps, Gujarat Alkalies, Hindustan Motors, Hotel Leela, IFCI, Industrial Oxygen, ITC Hotels Limited, Nagarjuna Fertilisers, SKF Bearings, SPIC, Swaraj Engines. TPL, Tata Hydro, UTI Mastergain, UTI M Plus and Zuari Industries.

With the volume of business witnessing phenomenal increase at the BSE, the card value of the BSE membership has risen considerably of late.

The BSE card value which was steady at about Rs 15 million for the last couple of years, had gone up to Rs 17.5 million on August 12.

The card value was Rs 14.6 million on June 24 this year, shot up to Rs 16.1 million on July 29, over the period of a month, and has recorded a rise of another Rs 1 million now.

According to a BSE statement, the card value had gone up to Rs 17.5 million when the governing board has accepted a bid of Rs 17.5 million for a sale of a defaulting member's card in the meeting held on August 12, 1999, which shows a continued trend of increase in value of the BSE card this year.

In a related development, the BSE's total turnover has surpassed that of its arch rival, the National Stock Exchange.

The BSE has surpassed the daily turnover of the NSE on Friday, August 13 when it recorded a total turnover of Rs 22.22 billion as against Rs 21.73 billion at the NSE, showing a rise of Rs 490 million.

There were at least five such occasions of surpassing the daily turnover by the BSE during the period of April-1998 and August 1999.

Rathi claimed that the BSE's delivery percentage has always remained higher at about 35 per cent than that of the rival bourse by about 25 per cent.

Rathi, however, said that surpassing the daily turnover is certainly not the achievement of the bourse, but it will certainly show continuous rise in the business volume in the coming days.

The BSE's daily turnover was nearly half that of the NSE's in 1996-97. Now it has increased to 85-90 per cent of the NSE's total volume.

UNI

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