Ghotala.in

Mumbai: Diving into a turbulent stock market can be a dangerous sport, though in recent days, it has proved to be an attractive and profitable activity for many large investors in the share of one company: Satyam Computer Services Ltd.

There was a surge in trading volumes in Satyam shares in the four trading days after the firm’s former chairman B. Ramalinga Raju admitted on 7 January to cooking the books over several years. Even as large institutional investors dumped Satyam stock and the price crashed from Rs178.95 on Wednesday morning to a low of Rs23.75 on 9 January on the National Stock Exchange (NSE)—with the stock market being closed on 8 January—day traders quickly bought and sold profited from the wild lurches in the price of a Satyam share. The scrip ended Tuesday at Rs31.05, down 9.7% from its Monday close.

Satyam was by far the most heavily traded share on both NSE and the Bombay Stock Exchange during these turbulent days. Trading volumes jumped to 473 million shares and 298 million shares on 7 January and 9 January, respectively, or around 45% and 70% of the firm’s total number of shares. Another 173 million shares were traded on Monday, as the government stepped in over the weekend to reconstitute the Satyam board. Volumes were still at a sky-high 101 million on Tuesday.

Many big boys had a field day. Bulk deals made up a quarter of the total traded volumes on 7 January and 9 January. Bulk deals are transactions where the total quantity of shares that are either bought or sold is more than 0.5% of the total number of shares issued by a listed firm.

Of the 44 large transactions that were filed with the stock exchanges, 34 transactions were paired, where investors squared off by the end of trading—buying and selling on the same day to make a killing.

Source / courtesy: LiveMint

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