Street signs: Focus on nine F&O stocks, Coal India's m-cap, and more

Focus on nine F&O actions

The decision by the Securities and Exchange Board of India (Sebi) to tighten trading standards for derivatives highlighted nine actions in the derivatives segment. Analysts say Adani Enterprises, Indiabulls Housing Finance, Vodafone Idea, Jindal Steel, Just Dial, NCC, Punjab National Bank, PVR and YES Bank will enter the “blackout period”, where new positions will be banned and only settlement existing positions will be allowed. In addition, more than a dozen other companies may be on the verge of entering the “blackout period”. “Although it cannot be said with certainty whether these actions will correct or rally. However, we can expect frantic activity as traders align with the new rules, “said an analyst. Samie Modak

MF distributor commissions will be affected

The persistent sale in the markets has considerably eroded the assets of investors linked to commissions, managed by mutual fund distributors (MF). Industry participants say it will further erode the commissions on which MF distributors depended after Sebi removed the initial commission. “A large asset base helped some individual distributors, as it still produced decent leads based on leads. However, the erosion of the asset base would worsen the reduction in distribution income,” said an individual adviser. “A higher asset base had become crucial in the industry to absorb customer acquisition costs and other operational costs after the abolition of the initial payments,” he added. Jash Kriplani

Coal India M-cap lower than dividends paid

Coal India shares plunged to an all time low of Rs 122 last week. At this price, the state-owned company was valued at Rs 75,000 crore – less than the total dividend of Rs 79,000 crore paid by the company in fiscal years 14 and 15. Coal India made its stock market debut in October 2010 At the time of the IPO, the security was listed at Rs 245. Now the security is trading at almost half the issue price. Even if we add all the dividends paid since the listing, the adjusted stock price amounts to Rs 290. Market players have said that the stock has proven to be a value trap. “It has been a decade since Coal India’s registration has taken place. The stock has always outperformed dividend yield charts, but failed to make a real appreciation. This is an example of why the market does not value power supplies, “said an analyst. Samie Modak

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