The "statistics" are not even of any significance. Based on one day’s data, the BSE yesterday claimed to be the No. 1 exchange! Today it is back to reality

The Bombay Stock Exchange's (BSE) turnover in the cash segment yesterday suddenly hit a record-breaking high of around Rs12,832 crore, "the highest amongst all Indian stock exchanges," the BSE claimed in a press release. All exchanges? There is only one more -- the National Stock Exchange -- which has beaten the BSE hollow in every way over the past decade. And how durable is thisone day lead of the BSE? Just a day earlier, the BSE's volumes stood at Rs3,391.27 crore, a fraction of that of the NSE. Can one day's data lead us to any conclusion?

For months together, the BSE's cash market turnover has been under Rs4,000 crore. A turnover of Rs5,000 crore-Rs6,000 crore has been rare. The sudden jump in turnover yesterday was obviously a one-off situation. Indeed, it was entirely caused by a block deal of Cairn India shares valued at $2.1 billion. So, the BSE set off on a major self-congratulatory binge.

It was so mighty pleased with the one-day wonder that it issued a press release where it hinted at the source of this sudden volume growth on Tuesday: "The exchange initiated several innovative initiatives such as mobile trading (currently being promoted by several broking firms), BSE's NEW BOLT trading terminal features, Fast Cast, E-Cast (allowing greater visibility on depth of market) and pre-open trading in common scrips and also in scrips listed only on the BSE. Implementation of faster processing systems has led to an increased response time of less than 10 ms from the earlier speed of 200 ms. Order-trade ratio has also gone up from 5:1 to 19:1 in the last one year. There has also been an increase in capacity from 1,000 orders per second to 20,000 orders per second."



This elaborate gibberish would have made sense if only the BSE's claimed leadership had lasted even for a day. The turnover on the BSE today slumped back to Rs3,747 crore, whereas the turnover on the NSE was four times that number, which is the daily norm.

In fact, the BSE was not number one even yesterday, if one judges on the basis of the volume of shares traded. For while the BSE clocked a volume of about 59 crore shares, the volume on the NSE was 60.59 crore shares. It is said that one can twist data in any way to peddle a lie. But the BSE has not bothered to twist a fact. Its leadership claim was a complete hoax. What the whole episode really reveals is the mindset of the top leadership at the exchange, which is struggling to stay relevant.

More importantly, the stock exchanges are the first line of regulation. If they indulge in such obfuscation, merely as an act of oneupmanship, can they be expected to discharge their regulatory functions with maturity? Also, how much more devious will they get if they are allowed to list and are under pressure to protect their stock price with a continuous improvement in financial performance quarter on quarter. 

This ought to be a wake up call for the Securities and Exchange Board of India (SEBI) which ought to come down hard on the BSE's mischievous one-upmanship, where it falsely attributed a one day jump in turnover to various actions initiated by the bourse's expensive top management team.