MUMBAI, February 23: The Life Insurance Corporation (LIC) and Unit Trust of India (UTI) have driven up trading volumes on the demat segment over the past couple of weeks by being net buyers at select counters like Reliance, State Bank of India and Tisco.According to brokers, the insurance behemoth has picked up shares from the demat segment on a daily basis. Each empanelled broker has been given the task of picking up 3,000-5,000 shares.
This apart, the demat segment has also witnessed the entry of arbitrageurs who are taking advantage of the disparity in prices between the physical and demat segments.
"Several investors seem to have dematerialised their holdings in a bid to keep a minimum amount of demat stock with them to arbitrage and make a quick buck," said a market source.
"LIC and to some extent UTI have been placing buy orders in some stocks almost every day. This has perked up the volumes in the demat segment," said an institutional broker.
The SEBI diktat allows institutions to buy in thephysical segment provided they dematerialise the shares. The cost of demat would have to be borne by them. In a bid to get away from this additional cost, these institutions seem to be slowly shoring up their holdings in stocks targeted by them for investment.
More importantly, brokers say that the discount at which shares are available in the demat segment could be another reason for these institutions to target the demat segment.
Volumes in the demat segment have been on an upswing since the past three weeks. As of now, the spurt is restricted to the eight securities shortlisted for compulsory dematerialisation for institutions, but brokers and depository authorities alike feel that this would translate to other securities as well post-April 6, when delivery in the physical and demat segment is harmonised.
From this deadline onwards, investors would be allowed to deliver demat shares in the physical segment as well.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
