Sebi orders probe, halts payout in four mid-cap scrips

 

 MUMBAI: Market regulator Sebi on Wednesday stopped payout of funds and securities for some trades executed on Monday in at least four midcap stocks that witnessed hectic activity in the last three days.

The stocks included Core Education, Eros International , ABG Shipyard and Welspun Corp, top sources confirmed to TOI. Sebi has also started an investigation into this sudden and sharp fall in about 10-12 mid-cap stocks. The regulatory move came even as there were widespread talks about selling of a large number of mid-cap stocks in which some of the leading speculators in the market had built positions but failed to meet their margin commitments to their respective brokers. Market sources said some of these brokers and clients are scheduled to meet on Thursday to discuss the situation arising out of the regulatory move, which has been taken to mitigate market risks and stop alleged manipulations . In the market, there are some brokers who finance speculators and traders (also called market operators) to take positions in stocks for intra-day trades.

In this case, as the prices of some speculative stocks fell sharply, leading to losses for operators, brokers liquidated those speculative positions, pulling down the prices further . The regulatory direction came on the same day U K Sinha , chairman, Sebi, said in Hyderabad that the regulator was probing crash in the prices of about 10-12 mid-cap shares on Monday. On that day, the stock price of Core Education had crashed 62%. On Wednesday it took a further knock of 46% to close at Rs 60. Last Friday, the stock had closed at Rs 304. So in just three sessions, the stock has lost 80% of its value. Without disclosing any details, Sinha said that the probe was started on Tuesday. "A similar attempt was made sometime in July in about four-five scrips and we identified the people who tried to manipulate the market, passed orders against them and took risk mitigation measures," Sinha was quoted by PTI.

 

                                         Amjad khan

                                          PGDM 2nd