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Opinion

Give us our Daily Tickers

I make the case at Yahoo for a common stock ticker set.

Have you heard of RELIANCE? Yes, that Ambani company. The fellows that keep arguing about how much gas they’re producing. But it’s also called RIL. And RELIND. Or RELI.

Whoa, you think. These are the same company? Why so many names? Or, in twitter parlance, “Why U No Call It Reliance?”

Because we don’t have a common ticker system for stocks. The NSE has its own set of stock codes. The BSE gives stocks both a code and a 6 digit number, which old-timers are proud to know by heart. Because the exchanges wouldn’t settle on a common naming convention, brokerages that needed to sell stocks decided that they will have their own names; ICICI Direct calls it RELIND, while NSE calls the company RELIANCE and BSE uses RIL.

Given that there are at least 10 large brokerage outfits, with each one using the symbols they want, the “ticker” confusion remains. Does RELINFRA mean Reliance Infrastructure? Or Reliance Industrial Infrastructure? Both are run by an Ambani, but a different one. My broker had  the RELINFRA for the latter company, and I tried to buy shares online thinking it was the former – I was lucky that their prices were so different (the first one was in three digits, the second in two) that the order was rejected for being way out of range. The brokerage in question has since shifted to the NSE symbols (which use RELINFRA and RIIL respectively) possibly to avoid frantic support calls from people less fortunate than me.

Ticker symbols on TV and web sites take their own hues; if you watch the price disappear across the screen by the time your mind has decoded the symbol, you are not alone.

And then, you get the symbol changes. Companies change names often, and then their ticker symbols change. HEROHONDA dropped the Honda name after the Japanese giant dropped out of the partnership – the company is now HEROMOTOCO. The famous Infosys was “INFOSYSTCH”, and we had a “TCSCONS” – they were recently changed to “INFY” and “TCS” respectively. Demergers and mergers impact name changes – Larsen and Toubro (L&T) was demerged into, well, Larsen and Toubro (Now LT) and Ultratech Cement (ULTRACEM).

While one can’t really ban name changes, a standardized ticker will make a change undesirable, since the ticker adds to the brand value. We can’t underestimate the power of a ticker symbol – even when Bombay was rechristened Mumbai, they didn’t want to change the “BEST” name for the electricity and transportation provider, so it became “Brihanmumbai Electric Supply and Transport” – still “BEST” in short.

In the US, each stock has a ticker symbol that remains the same everywhere. I look for a symbol – say GE – and it is GE no matter where you look: on TV, on a web site, on the SEC site or in a newspaper. The ticker symbol also has few characters – AMZN (Amazon) and YHOO (Yahoo) have four but you’ll even find single letters (G for Genpact).

In India, SEBI has standardized a number of things across exchanges. For instance, the reporting standard for financial results has been made standard – the exact headings have been determined and each company has to produce the same information – Revenue, Total Expenditure, Net Profit, and Diluted Earnings per Share and so on. (Note: the actual headings are longer and unintuitive but at least we have a standard) Before these rules each company would have a different format – some called it Revenue, others called it Income, yet others called it Sales. The standardization process helps in keeping companies comparable.

Secondly, they have standardized, to an extent, the filing of certain types of transactions. Insider trading information – where company management or promoters buy or sell stock – were reported by different companies in different ways, which made it difficult for anyone to know what really was going on. The standard now ensures that companies file such information in a standard format – telling us when they bought or sold, how many shares were involved and what was their holding after the transaction.

Similar standardization has occurred in reporting of promoter share pledges, shareholder details (released every quarter), substantial acquisitions (above 5% of holding) and so on.

Soon, with a shift to XBRL (an XML based report that has a predefined structure) this will go a step further in terms of standardization across exchanges – and indeed, with SEBI, The Ministry of Corporate Affairs and the Reserve Bank of India adopting XBRL together, a single unified standard of reporting across different regulators.

With that level of standardization, it is indeed a shame that we can’t have a common “ticker symbol” for each company. Sure, they have a long name which is unique, but who uses that? It would be terribly difficult to have a conversation about Carborundum Universal Limited if you weren’t allowed to use some sort of abbreviation; and its best that we have a unique abbreviation as well.

Note that I don’t call for SEBI to choose a symbol – the companies must have that choice. But certain ground rules must apply – a maximum number of characters, for instance, so an abbreviation doesn’t become alphabet soup, and an element of relevance – so an ABC Toilet Seat Paint Manufacturers Limited doesn’t take the symbol “WIPRO”.

The change is simple, but never really thought of as important. Only brokers needed to care about symbols earlier, since you’d call and mumble the name of the company you wanted to buy. But now, you get a terminal to make your own trades, websites to research and TV channels and running tickers on your mobile phones; a common “short name” would be quite useful.

A rose by any name will smell as sweet, but even if you’re a card carrying BJP member you’re going to find it difficult to deeply connect with a Nelumbo nucifera.

  • Ayon says:

    Totally agree on the ticker pain! I spend so much time in cleansing data.
    I once was using ICICI Direct for online trading and maintained a tracking spreadsheet that pulled F&O stock data from Bloomberg via API macros. Half my effort went into a three way mapping system between NSE, Bloomberg and ICICIDirect and that too required regular tinkering.

  • Raja says:

    Very true. Have faced this pain.
    One question: Are you planning to do a post on latest Quarterly result of piramal healthcare ?

  • Adheer Pai says:

    In the US, 4 letter symbols are for stocks listed on Nasdaq, and 1-3 letters are for NYSE.
    For example, MSFT (Microsoft), AAPL (Apple), ORCL (Oracle) etc are listed on Nasdaq, whereas GE (General Electric), XOM (Exxon Mobil), C (Citibank) are listed on NYSE.
    Five letter codes are reserved for special situations. For example, stocks undergoing bankruptcy are suffixed with Y. For example, the original code for Enron was ENRN, and when it filed for bankruptcy, its code was changed to ENRNY.

  • Dev says:

    “Give us our daily ticker”
    Amen 🙂

  • bemoneyaware says:

    Yes there should be a standardized way of having ticker names for companies. Different names show “we are same same but different..” Which Ticker System should be adopted…would be the next question. But the main question is “who is going to bell the car?”

  • feltra says:

    Deepak ji,
    I am so glad to see this point raised. In fact, I must say that I am more than surprised that so many “professionals” (in finance) continue to waste hours on trying to match this (or do they?). At least I do… In fact, I have a file which is supposed to list the names in BSE and NSE and their codes all in one row.. but as one would expect, its perenially broken.
    NSE is the worst – at least BSE doesn’t change the codes in case of company name changes. NSE simply changes the codes too and there is no reference to the earlier codes at all!!!! In BSE, they get “creative” with which page displays the names. The names in Bhavcopies do not match the online names.
    In both sites (NSE & BSE) it is not possible to get a simple list of codes-names of all companies listed on the exchange. I actually got my initial list from ICICIDirect (and then I don’t know how many companies they left out).
    While we are on the subject, would like to raise a related point: Why should retail investors try to go to various free and paid sites simply to get the results data for all companies? Sure, NSE and BSE have some results pages, but they do not have for example Cash Flow. IMHO, SEBI should mandate that ALL the results of all companies should be available on the exchanges in spreadsheet form. This alone will make the task of comparing companies so much easier for the retail person and therefore be a big incentive for value based approach to investing…. Would like to know your thoughts on the same.
    Sorry for the long post. This is an area I am still struggling with….
    Best Regards,
    -feltra

    • I agree, Feltra-ji. This is such a mess and for no reason!
      It is possible to geta list of all names on BSE (Go to older version, use Company Information link).
      Yes, you are also correct that fin results must be in spreadsheet form. In fact XBRL will change that – everything will be available in a single format and no one will be able to change things to whatever they want (calling revenues income etc.)
      I am also struggling with it, but have written programs to try and sort these issues out. Very painful!

  • sometimesbullsometimesbear says:

    This country and its institutions are run not by candidates chosen on merit but based on other considerations.
    Same goes for SEBI
    What more can u expect?
    The merit has migrated to the US which is why u hv sensible decision making there.