Shares of the BSE Ltd. surged another 8% on Tuesday, extending its gains for the third straight session. The stock also closed above the mark of ₹2,000 for the first time ever, ending at a record high.

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With Tuesday's move, the stock has surged over 260% so far in 2023, which is its best annual performance since listing in 2017. Interestingly, the only other calendar year when the stock has delivered positive returns is back in 2021, when it had also tripled in value.

Shares of BSE have been on a tear since it announced a share buyback in July this year. With the stock crossing its buyback price, the company revised it higher, only to have the stock cross that too. The stock has nearly doubled from its revised buyback price too. The buyback eventually received a poor response.

What has further boosted the stock price is the revised transaction charges in the equity derivatives segment, which took effect from November 2023.

"Transaction charges shall be levied based on the slab on the Incremental turnover basis (as stated above) on cumulative turnover at the end of the month," the exchange had mentioned earlier.

BSE's current market share in the equity cash segment hovers around 9 percent as of September this year. However, MD & CEO Sundararaman Ramamurthy, has set his sights on achieving a 10 percent market share in the equity cash market. He highlighted this in an earlier interaction with CNBC-TV18.

What Should Investors Do?

"Although BSE looks lucrative due to the unstoppable rally, on the RSI daily scale, bear divergence is gradually popping up, which is a matter of concern," said Jigar Patel of Anand Rathi.

"Having said that, price action is way above all key exponential averages and the Ichimoku cloud. As we advance, there might be a reversion to the mean. Fresh longs are not advised and for those already holding, book profits in the zone of ₹2,000 – ₹2,100.

Ruchit Jain of 5paisa.com believes that even as technical momentum indicators are in overbought territory, it is observed that the stock continues its uptrend in the overbought zone when in a strong trend. "Hence, investors should continue to ride this trend until any reversal is seen," he said. Immediate supports for the stock are seen at ₹1,850 and ₹1,600.

Brokerage firm Investec in a note said that the revision in transaction charges should lead to an increase in revenue for BSE. The firm has a "buy" recommendation on the stock with a price target of ₹2,140.

Investec is the only one among the six analysts that track the BSE stock whose price target is higher than the current market price.

Four out of the six analysts who track BSE continue to have a "buy" rating on the stock, while the other two have a "hold" recommendation.

First Published:Nov 8, 2023 5:40 AM IST