Hi all
The new ESM (introduced June 5) guidelines which put all small-cap stocks in the ESM Stage 2 (trading is restricted to once per week and that too by auctions) are extremely devastating to micro-cap equity buyers.
Essentially the moment a small-cap stock starts rising well its trading is halted.
Is anyone else dramatically affected by this?
I was planning on writing to NSE to complain.
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Its good move actually, will close pump and dump forever. For good company it will also be good as people can accumulate at lower price .
Pump and dump is applicable if the company is not a quality business but the regulation has nothing to do with the quality of the business its a blanket restriction.
For a good company, there is no point accumulating it at a lower price if it is prevented from reaching a good price by the government. The moment a good stock rises the trading a blocked . It makes no sense
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Its just for short time , if its really good business than price would rise and over the years. It might be bad for short term traders but really good move for investors. Micro cap can easily manupilated how good the business is.
I really like the move to be honest from investors point of view might not be great for short term traders
What is the definition of quality business ? Every business listed went through the vetting process and “good” is very relative term. For some Zomato, Paytm are bad business now or shoould not be invested but were “good” business when listed 2X . So , again these valutions and fundamentals should be taken with a pinch of salt