Mid Cap Crash:Will SEBI do something to protect retail investor

By | February 25, 2013 3:14 pm

Today once again Retail Investor were taken off guard with a carnage in Mid caps stocks. Core education lost more than 60% of its market capital in few hours, Many other stocks dived more than 20% of their market cap.The sharp selloff was in contrast to the benchmark Sensex and Nifty which traded flat.

Core Education shares plunged around 60 percent, leading the wave of distress sales in many mid-cap shares today. The reason for the free fall is not yet clear, but brokers said it could most likely be due to financiers selling the shares pledged with them by promoters or market operators. Another theory doing the round is that the slide may have been sparked off by some brokerages liquidating derivative positions of some of their large clients, because of their inability to honor margin commitments.

Another story doing round is Sanjay Danghi an Operator barred from SEBI has to liquidate his position due to their inability to honor margin commitments.I did a search and found out the portfolio of Mr Danghi, well this story make sense as most of stock in his portfolio has taken the beating. Please look at the Table below:

 

Sanjay Dangi

Also the Stock which has fallen have pledged shares by promoter as seen in below table:

Core Education has a bad history of falling more than 50-70% within few sessions, be it be in OCt 2008 when stock went down till 40 or Mar 09 where again it saw a steep fall.

Mid Cap Carnage

Retail Investor who just started coming into market has got a major set back, The Kind of wealth erosion seen in today’s session will again held back people from investing in market and money will again flow in Real Estate and Gold. Many traders are confused why their are no circuit filters on Core Education even though its not in F&O. Well as per BSE they have a norm of keeping stocks without any filter and core is one of them.

 

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