Brokerages flag near-term pain for BSE on expiry shift

The move in line with global trends, says Ramamurthy

- ANANYA GROVER

BROKERAGES HAVE RAISED concerns about BSE's market share following the Securities and Exchange Board of India's (Sebi) approval on Tuesday of NSE's proposal to shift its derivatives contract expiry to Tuesdays. Analysts believe that the country's oldest exchange could see a drop in volumes as well as profitability after the change in the expiry day to Thursday.

However, BSE MD & CEO Sundararaman Ramamurthy maintained that a Thursday expiry is ultimately beneficial for the exchange. "A Thursday expiry aligns well with global market practices, with most foreign institutional investors having algorithms aligned with that day of the week," he said. Ramamurthy added that since most investors initiate their derivatives strategies at the start of the week, a Thursday expiry provides more time to react to market developments and optimise positions. He also noted that the shift is well spaced from NSE's Tuesday expiry, offering a balanced trading calendar.