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Shares of BSE Ltd, the oldest stock exchange in Asia, increased by 4.9% on Tuesday reaching Rs 5,408.95 whereas on the National Stock Exchange (NSE) brokerage house Jefferies upgraded his rating on the said company from an ‘Underweight’ to a ‘Hold’ and hiked its target price to Rs 5,250 from the previous 3,500.
The bullish target points to an increase of more than 2% from the closing levels of Monday.
During that time, Jefferies mentioned that the exchange earning is likely to be beefed up although some brokers will have to increase their pricing in response to the new market.
The F&O policies recently introduced by the Securities and Exchange Board of India (SEBI) have already affected the volume of options at first but there was a drop of 70% in the contract count that month. But, January (the current month) premiums have already dropped by less than 10% in comparison to Jeffries previous forecast of 25%.
Remarkably, due to the increase in lot sizes, the industry’s average ticket size has increased threefold in the second week of January 2025 compared to November 2024.
According to Jeffries, this means that the discount broking volumes are set to reduce by more than 40%, but the prices have to be drastically increased for the aftereffects to be balanced out.
Moreover, Goldman Sachs also set coverage for BSE initiating with a target price of Rs 5,060 which is a neutral rating. In support of BSE growing in the future, it is said that the markets will have nominal earnings growth consecutively over the years due to India’s equity capital growth.
Indicating that BSE is on the higher end of its pricing meant that the risk-reward range remained comparatively equal which seems unsettling considering BSE pricing is meant to be on par with its global competitors.
As per the latest updates, BSE’s market capitalization stands at Rs 69,691.75 crore. The current stock has a relative strength index of 46.8 meaning it is in the middle ground fluctuating between being over bought or sold. Normal RSI value ranges between 30 to 70 with values lower than 30 considered oversold.
According to a survey conducted, out of 9 analysts that endorsed BSE, 5 suggest buying, 3 suggest holding and finally the last analyst suggests selling.
On Monday, BSE closed off at Rs 5,148 an increase of 0.51%, in the last year alone the share price has increased by percent 130%.
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