Synopsis:
Jefferies projects that such a shift could materially affect earnings, with BSE’s FY27 EPS potentially falling 20–50% and Nuvama’s by 15–25% because of lower trading activity and reduced arbitrage opportunities. Since July 9, stock prices of affected entities have already declined around 15%, reflecting market anticipation.
Recent speculation in India’s capital markets centers on a potential change in index derivative expiry cycles, moving from weekly to fortnightly or monthly schedules, possibly with same-day settlement mechanisms.
While SEBI and exchanges like BSE and Nuvama have not made any official announcements, the possibility of such a shift has attracted significant attention due to its potential impact on trading volumes, liquidity, and overall market dynamics.
Jefferies on capital markets
Market speculation in India is mounting over a potential shift in key index derivative expiry cycles from weekly to fortnightly or monthly with possible same-day settlement mechanisms. Although SEBI and exchanges like BSE and Nuvama have not officially confirmed changes, analysts are assessing likely impacts.
Jefferies estimates BSE’s FY27 EPS could fall 20–50%, and Nuvama’s 15–25%, due to expected reductions in trading volume and arbitrage-driven revenues. Since July 9, affected stock prices have already declined ~15%, indicating that markets are pricing in these potential changes.
The upcoming SEBI board meeting on September 12 is pivotal, as any official announcement could either validate speculation or ease investor concerns. Overall, while uncertainty persists, structural changes to index derivatives could significantly reshape trading dynamics in India.
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About the companies
BSE Ltd (Bombay Stock Exchange) is Asia’s oldest stock exchange and one of India’s leading securities markets. It provides a platform for trading equities, derivatives, mutual funds, and debt instruments, serving thousands of listed companies and millions of investors.
BSE is also known for its benchmark SENSEX index, which tracks the performance of India’s top 30 companies, making it a key indicator of the country’s financial markets. With market capitalization of Rs. 89,742 cr, the shares of BSE Ltd are currently trading at Rs. 2,205 per share, from its previous closing of Rs. 2,162.80 per share.
Nuvama Wealth Management Ltd is an Indian financial services firm offering a wide range of wealth management, investment advisory, brokerage, and distribution services. It caters to individual and institutional clients, helping them manage investments across equities, derivatives, mutual funds, and other financial products. Nuvama plays a significant role in India’s capital markets by providing research-driven solutions and facilitating trading and investment strategies.
With market capitalization of Rs. 23,000 cr, the shares of Nuvama Wealth Management Ltd are currently trading at Rs. 6,469 per share, rising 5% in today’s market making a high of Rs. 6,495, from its previous close of Rs. 6,169.50 per share.
Written by Manideep Appana
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