FM Chidu Asks Stock Brokers To Corporatize Their Business. Yeah!! It’s High Time To Do

FM Chidu today asked stock brokers to corporatize their business to compete successfully with global players in the domestic as well as overseas capital markets.”Corporatization brings better standards of governance, brings better transparency, increases the confidence level of customers. Therefore, I believe that stock broking and stock market activities should also be corporatized, Chidambaram said while addressing the 3rd annual conference of the Association of National Stock Exchanges Members of India.It will help brokers to access overseas markets and tap the funds of Indian Diaspora for domestic markets apart from attracting professionals to the “family- controlled business,” he said.

In his Budget for 2008-09, the Finance Minister has favored listing of more Central Public Sector Enterprises.

He said the BSE and NSE should also consider helping the small brokers to access overseas markets.

While enumerating steps taken by the government to broaden the capital market in the past 10 months, Chidambaram said the government attached “highest importance to capital market.”

“We will continue to strengthen, deepen and broaden capital market,” he said.

Announcing: Hyderabad BarCamp6 – I will be there!!

Barcamp6 Hyderabad is back with BANG!! For me its a bit of surprise, last Barcamp 5 was held @ google on Feb 16(not so far you see). Slated for March 28th at IIIT Campus, Hyderabad.

Theme is Product. Join me for this event by registering yourselves here. The event will be an opportunity for the technology and products fraternity to interact and network as also to highlight the support eco-system available in Hyderabad for new products and startups. Apart from showcasing products being built out of Hyderabad, leaders from Product companies and the VCs/Academicians share experiences building IP and products. Spread the word!

Not Only ICICI, PSUs With Global Presence May Also Be Hit By Financial Crisis In The Global Markets

ICICI Bank may not be the only victim of the financial crisis in the global markets, other public sector banks like State Bank of India, Bank of Baroda and Bank of India, who also have significant international operations, may also have to take some hit.  But, this hit is likely to be nominal, reports CNBC-TV18’s Krupali Pandit Yadav.

Sources at Bank of India say its exposure is to the tune of USD 400 million in credit linked notes which are backed by FCCBs of Indian corporates. They have, till December, provided for a marked to market loss of USD 1 million and this quarter, Bank of India may have to provide another USD 1 million.

Meanwhile State Bank of India says that it has an exposure of only USD 20 million through collateralized debt obligations which are held to maturity and the bank has made provisions to the tune of USD 1 million.

Now Sebi Looks To Reduce IPO Closure and Listing Gap

Mr.Chandrasekhar Bhaskar Bhave conducted his first Board meet as the Chairman of market regulator SEBI. Bhave told that SEBI has okay’d the MoU between the Madras Stock Exchange, and the NSE. He also said that SEBI is looking into cutting the gap between an IPO’s closing and listing dates. Bhave said the SEBI Board did not take up issue of uniform face value for shares.Finance Minister P Chidambaram’s address to the Sebi board today set the tone for CB Bhave, the new Chairman of SEBI, to chart out a road map of priorities. As desired by the FM, carrying on with reforms in the primary market and investor protection are high on his radar.

SEBI Chairperson CB Bhave believes in black and white. So, his first priority is to ensure the grey market for IPOs is considerably reduced if not totally eliminated. At the SEBI Board meet in the capital today, a decision was taken to compress the time gap between opening of an issue to its listing. Typically, the process takes about 21 days, a period which is used by grey market operators to manipulate the IPO price.

We have moved to T+2 settlement in the secondary market. So, many felt similar compression was not done in the primary markets, said CB Bhave.

The FM also addressed the Sebi board today where he raised the issue of developing the Indian capital markets. The new Sebi Chief has responded by rationalising fees charged from intermediaries to increase volumes.

The ad valorem fee for filing of an offer document by a mutual fund has been reduced from 0 .03% to 0.005% subject to a maximum of Rs 50 lakh. The ad valorem fee for filing of an offer document, in case of public issue, has been reduced from 0.03% at present to 0.005% subject to a maximum of Rs 3 crore.

Since the volumes in these segments are quite large now, we felt there is a case for rationalisation and reduction of rates, added Bhave. But he was tight lipped on issues of speculation, IPO price fixation as well as when the stock lending and borrowing scheme comes into effect.

Excerpts from CB Bhave’s speech at his Press Conference:

The Board considered the issue regarding the proceedings that SEBI has started or intends to start with reference to NSDL. For this purpose, the Board decided that it will form a committee of three independent Board members headed by Dr Mohan Gopal, Director of the National Judicial Academy and one of the independent members of the SEBI Board. The other two members of this Committee are V. Liladhar, Deputy Governor, RBI, and Anurag Goel, Secretary in the Ministry of Corporate Affairs. The Committee will, if it so desires, seek the advice of Ravi Kadam, Advocate General of Maharashtra in its work.

The Board also looked at the question of rationalizing the fees that SEBI charges from intermediaries. As you all are aware, since the volume of transactions in the market was very high this year compared to what could have been expected, we felt that there was a need to consider whether the fee charge, to some intermediateries or for some activities, can be reduced or rationalized by the Sebi. The Committee under the Chairmanship of Mr Chopra who is a whole-time member of Sebi, was found to examine this structure, their Report was examined by the board, and the Board took a decision, to reduce the fees from between 50%, to 80%, in certain category of cases. A press release will detail out all the areas where this fee reduction will be effective. This fee reduction will be effective from April 1, 2008.

There was also a proposal before the Board on the basis of an application submitted by the National Stock Exchange and the Madras Stock Exchange. They have entered into an MoU whereby the members of the Madras Stock Exchange, can trade on NSE. The Board gave an in-principle approval.

NCFM Courses in Hyderabad

The Financial scene in India has long way to go before it has to get saturated. Beginnings have been made and efforts are made by Market Regulators in this direction. The financial markets in India are going to be the turf of certified professionals very soon due to regulatory compulsions and also remarkable initiatives of the industry.

NSE’s Certification in Financial Markets (NCFM) provides a very critical element of the financial domain reforms by developing a pool of human resources having right skills and expertise in each segment of the industry to provide quality intermediation to market players. This seems to be a great opportunity for young people and financial professionals alike.

Institutions teaching NCFM and other financial courses can contact us for details of readers who need to know course details and alike all over India.  Here we do get,  loads(coupla hundreds per week) of queries regarding NCFM, other financial courses and ofcourse NCFM certification too.   And please don’t send me your queries, unless it’s taped to some cash.

Foot note: This blog admin is planning to make payment structure through Paypal within short time.

Indian Stock Market Returns Second Best

The country’s equity story is not of recent origin — and certainly not 3-5 years old. A study by Dun & Bradstreet India indicates the domestic stock market has produced the second-best returns over a 10-year time frame, and also the second-best over the last year.

In the 10-year bracket, only South Korea is ahead at 28.71% compared to India’s 20.43%.  In the one-year timeframe, Brazil has returned 75.35% versus India’s 71.23%, the report notes citing data from MSCI Barra.   Specifically talking about the Indian equity markets, the report notes that in calendar 2007, the National Stock Exchange (NSE) had the maximum number of brokers (1,077), followed by Calcutta Stock Exchange (960), Inter-Connected Stock Exchange (925) and Bombay Stock Exchange (BSE, 901).

Power Turmoil Over?

After a bit of a break from the volatility and uncertainty, markets tried to get some momentum in the pre-budget sessions. However, the process was hampered by the anti-market budget and contributed only to worsen the wounds. Markets fished to even lower levels in March and breached the 17,000 mark to reach 16,400. It is still not clear whether the markets are bottomed out or, worse, the bleeding is still on. In this whole bear run, the sector that saw its worst days in the last few years was the power sector. The big names got down to earth, with their share prices dipping. Further here

CTT May Lead To Rampant ‘Dabba Trading’

The proposed imposition of the commodity transaction tax (CTT) in the Union Budget by Finance Minister P Chidambaram is expected to divert hedgers and speculators to rampant ‘dabba trading’ (illegal trading), a top industry official said.”The commodity transaction tax will attract hedgers and speculators to ‘dabba trading’, where traders settle their transaction on exchange prices, without paying any margins or taxes,” National Commodity and Derivatives Exchange (NCDEX) Chief Economist Madan Sabnavis told PTI here.

The transaction in illegal trading is almost equal to commodities exchanges’ turnover of Rs 40-lakh-crore and the activity is present in Gujarat, Uttar Pradesh, Madhya Pradesh and Punjab.

Marketmen say the two categories most affected would be jobbers and hedgers. Jobbers or day traders contribute almost three-quarters of daily volumes in commodities such as bullion, natural gas and crude oil. Further read here

Stock Markets In India Closed For Today

Stock markets in India closed for today on account of Mahashivarathri yesterday!