Business & Investment

ET Markets Morning Podcast: See Who Invests in Counter-Arbitrage

Good morning.

>> Hedge fund explosions rattle investors
>> Junjunwara-backed Nazara is on a solid list
>> HNI, DII try to cash in counter-arbitrage
>> When the day trader shifts to options, the peak margin rule hits the volume

Hello. Welcome to ETMarkets Morning. This is a show about money, business and markets. This is Sundeep Shin.

Let’s take a quick look at the market situation.

The explosion of top hedge funds has shaken financial markets as it raises fears of potential transmission. However, these concerns were alleviated a bit by closing US stocks flat overnight. Stocks fluctuated in most Asian markets in early trading this morning, while Nifty futures traded on the Singapore Exchange suggested a rise in Daral Street futures. In currencies, the dollar continued to rise, but the yen traded at its weakest level of the year. In fixed income, yields on 10-year Treasuries have risen above 1.70%. When traders turned to this week’s OPEC + meeting, oil peaked in almost two weeks, despite the reopening of the Suez Canal. Demand concerns have renewed, and speculation is circulating that the group will continue to curb production.

That said, this is what else makes the news.
The turmoil in Arquegos Capital Management, a former hedge fund manager Bill Fan’s investment firm, has shaken financial markets around the world. Stocks of some of the world’s largest banks plunged in trading on Monday: both Nomura Holdings and Credit Suisse could face significant losses as they fell by more than 14% and were exposed to false bets by hedge funds There are $ 20 billion in positions related to New York-based family offices. US stocks have receded from record highs as traders weigh the levels of transmission.

Upon returning home, Nazara Technologies, led by ace investor Rakesh Junjunwara, appears ready to list bumpers on today’s stock exchanges. Unlisted stocks of mobile gaming companies are trading on the gray market one day before listing at a premium of 71% above the IPO issue price, indicating a good listing pop. It was the first gaming company to be listed on India, with Big Bull Rakesh Jhunjhunwala holding a 10.82% stake. Jhunjhunwala did not participate in the sale of 583 rupees from March 17th to 19th.

Rich traders and some DIIs are looking to take advantage of counter-arbitrage opportunities on Daral Street. In the wake of the Covid case surge in India, FII purchases of index futures over the past two days have partially offset cash market sales, raising Nifty’s futures premium to over 100 points, the highest in two years. I pushed it up. It created the risk-free counter-arbitrage opportunities that HNI and domestic institutions are trying to capture. In counter-arbitrage, futures contracts are sold and cash stocks are purchased in anticipation of a reduction in spot futures premiums. This premium usually ranges from 30 to 35 points and spreads are sold for profit. Some rich clients and DII have begun selling Nifty futures and buying cash stocks from index companies to profit from narrowing spreads.

To reduce information asymmetry, Sebi has decided to publish audio / video recordings of analyst meetings to its website and stock exchange within 24 hours, or before the market opens, whichever comes first. Stipulated in the company. Companies also need to upload a written record of the meeting within 5 days. Some say this step can affect analysts’ payment of information over the phone.

Sebi’s new framework for peak margin requirements appears to have impacted cash and future segment volumes, with the options market making a profit at the expense of the former. Average daily trading volumes on both exchanges’ cash and futures segments decreased by 19% and 13% in March compared to February, respectively. In contrast, trading volumes in the options segment in March increased 16% and 39% compared to January.


Franklin Templeton has used a diplomatic channel for Sebi’s “fair and equitable” hearing in ongoing regulatory and legal proceedings, including the liquidation of six debt schemes of domestic asset managers. “If you are hit by unreasonably large penalties, whether fine or injustice, you will not only discriminate against major US-based global investment managers, but also reduce jobs or withdraw your business in India. “We will do that,” said Franklin Templeton. Jennifer M. Johnson, Global CEO and President, said in a memo to Washington’s Ambassador to India.

Well, before we go, let’s take a look at some of the busiest stocks this morning …

Piramal Capital & Housing Finance, which plans to acquire DHFL, may sell the latter real estate developer loan portfolio of approximately Rs 53,165 to become a retail mortgage lender.

Dipam tweeted that the government has received multiple statements of interest regarding the proposed sale at Neelachal Ispat Nigam.

IDBI Bank plans to accelerate growth, regain lost corporate clients and sell shares in insurance, capital markets and technology after withdrawing from the PCA framework for weak lenders of bank regulators.

· Microrender Credit Access Grameen inventories have fallen 15% in the last three months amid concerns about third-quarter net losses due to increased provisioning for expected credit losses.

Also check out over 20 recommended stocks for today’s trading from top analysts on

That’s it for now. Stay with us for all market news throughout the day. Happy investment!

ET Markets Morning Podcast: See Who Invests in Counter-Arbitrage ET Markets Morning Podcast: See Who Invests in Counter-Arbitrage

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