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Love your enemies. And pray for those who persecute. –Matthew 5:44

13 Jun 2018

SHARE MARKET--What is under ASM? Just introduced by BSE and its impact.

On 31 May 2018, SEBI, the stock market regulator, issued a circular[1] (including annexure) with the applicability of Additional Surveillance Measure (ASM) for a consolidated list of 105 companies. They also provided a disclaimer that the shortlisting of securities under ASM Framework is purely on account of market surveillance and not be construed as an adverse action against any company.

Those 105 companies are include many popular, fundamentally strong, high growth oriented stocks. The only caveat being that most of the stocks are from the small and midcap segment and many investors/traders were over leveraged in these stocks from the middle of 2017.

What does this mean? Other than the stocks which are in T-2-T segment, which basically means that there is no intraday square-off possible for those stocks, for buying other stocks the investors have to provide 100% margin money, thereby reducing manipulation by certain entities/individuals who trade using a small margin money.
Is this good? Well, there are two sides to it. As a retail investor, I don’t like this at all & I am invested in quite a few of these stocks from a long time - some as back as 3 years. I am perturbed by the fall in some stocks, with continuous LC’s.
However, SEBI also has a valid point. The traded volumes of most of these companies would have hit the roof over the last 18 months or so and might have been subjected to stock price manipulation by certain entities. Hence, it was necessary to stop that process and avoid stock manipulation.
Therefore investors please refer the list which is available in BSE site and take vigilant in these stocks especially fundamentally week shares.
 Wish you good luck.

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