NSE Changes Bullion ETF Daily Price Range Computing Method: A New Era for Indian Investors
The National Stock Exchange (NSE) has announced a significant change in the computation method for bullion Exchange-Traded Funds (ETFs) daily price ranges. This move comes after confusion arose when the closing price of silver ETFs on Friday was higher than the lower circuit for Sunday’s trades. In this article, we will delve into the details of this change and what it means for Indian investors.
Understanding the Change in Computation Method
The NSE has changed its computation method from trade minus two days (T-2) to trade minus one day (T-1). This change is aimed at addressing the issue of confusion that arose when the closing price of silver ETFs on Friday was higher than the lower circuit for Sunday’s trades. For instance, the lower circuit for Kotak Silver ETF on Sunday, computed on a T-2 basis, was ₹291.65 a unit, which was above Friday’s closing price of ₹286.93.
This change in methodology has been welcomed by fund managers, who believe that it will help overcome the problem of confusion. Satish Dondapati, fund manager at Kotak Mahindra MF, said that the computation on T-1 was likely to continue through Monday, thanks to silver ETFs hitting lower circuits on Sunday.
Impact on Silver ETFs
The change in computation method has had a significant impact on silver ETFs. The Kotak Silver ETF plummeted 10.74% to hit the lower circuit, while the popular SilverBees also hit its lower circuit at ₹252.5. The SilverBees fell 29.86% from its record high of ₹360 on Thursday to Sunday’s closing of ₹252.5 a unit.
The Kotak Silver ETF has tanked 34% to ₹256.11 a unit from Thursday’s record high of ₹388. This significant decline in value has left many investors worried about their investments.
Reasons Behind the Decline in Precious Metals Prices
The decline in precious metals prices can be attributed to a stronger dollar and US President Donald Trump nominating Kevin Warsh as successor to Jerome Powell, whose term ends on 15 May. This news led to a significant decline in precious metals prices, which in turn affected the value of silver ETFs.
Investors who were looking to exit their positions on Sunday found it difficult to do so, as their silver units were locked at the lower circuit half-an-hour post-opening at 9 am. The thin trading volumes on Sunday added to the woes of investors, with the volume of SilverBees being ₹417.12 crore against the one-week average of ₹7511.5 crore.
What This Means for Indian Investors
The change in computation method for bullion ETF daily price ranges is a significant development for Indian investors. It highlights the importance of staying up-to-date with the latest developments in the market and being aware of the factors that can affect your investments.
Indian investors who have invested in silver ETFs need to be cautious and keep a close eye on the market trends. They should also consider diversifying their portfolio to minimize their risk.
In conclusion, the change in computation method for bullion ETF daily price ranges is a significant development for Indian investors. It is essential for investors to stay informed and be aware of the factors that can affect their investments. By doing so, they can make informed decisions and navigate the market with confidence.
Key Takeaways
- The NSE has changed its computation method for bullion ETF daily price ranges from T-2 to T-1.
- The change is aimed at addressing the issue of confusion that arose when the closing price of silver ETFs on Friday was higher than the lower circuit for Sunday’s trades.
- The change in methodology has had a significant impact on silver ETFs, with the Kotak Silver ETF and SilverBees hitting their lower circuits.
- Indian investors need to be cautious and keep a close eye on the market trends, considering diversification of their portfolio to minimize their risk.
