While broker shareholders of the Bombay Stock Exchange (BSE) are concerned over the prospects of the exchange amid falling trading volumes, they can take solace from the fact that the exchange's unlisted shares are valued at a substantial premium over the book value.
According to a broker, a few thousand shares recently changed hands between two brokers at Rs 207 per share through off-market transaction. The price was 22% higher than the fair value of Rs 169.9 calculated by the exchange to help its members in computing their net worth as on March 31, 2011 and September 30, 2011.
Over the past few years, the BSE share price has declined sharply due to lack of demand amid uncertainty over the listing of Asia's oldest stock exchange and its prospects. Many brokers and other non-broker shareholders, however, continue to stay invested on expectations that they will earn much better returns in the long run.
Being cash-rich, the BSE has been paying good dividend to its shareholders who hope that the exchange's efforts to revive the sagging F&O segment will get boost with Sebi's decision to allow marketmaking in illiquid equity derivatives.
Source: www.economictimes.com
Ravi Jhawar
Summer Intern-Technical Analyst
DENIP Consultants Pvt. Ltd.
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