Wednesday, March 29, 2006 

Sensex Touches 11000 Mark

The Bombay Stock Exchange benchmark Sensex on Tuesday reached the 11,000 milestone and also touched an all-time high of 11,017.25 on sustained buying by funds, but lost some ground to close at 10,905.20.
Positive budget proposals, the Supreme Court's judgement on selling of mill land, robust economic growth, expectations of higher than eight per cent GDP growth and last but not the least, first roadmap to be announced by RBI on capital account convertibility by July end this year, cleared the decks for the Sensex to cross the 11,000-mark, dealers said.
The BSE-30 share sensitive index opened slightly better at 10,945.62 against Monday's close of 10,941.11 and later shot up to the new intra-trade high of 11,017.25. Thereafter, the market turned volatile on alternate bouts of buying and selling during the last hour with profit taking pushing the index to a low of 10,863.61. Later, it closed at 10,905.20. IT shares, which were the favourite with investors on Monday, ran out of steam and some of them finished with losses.
The Sensex took 33 trading sessions to cross over the 11,000 mark after it had crossed the 10,000 mark on February 6.

By hitting the 11,000 mark, the BSE Sensex has joined the exclusive club of leading world market indices like the Dow Jones (USA), Nikkei (Japan) and Hang Seng (Hong Kong) that trade above the 11,000 mark.

Wednesday, March 29, 2006 | |

Saturday, March 11, 2006 

MCX-Multi Commodity Exchange of India

MCX an independent and de-mutulised multi commodity exchange has permanent recognition from Government of India for facilitating online trading, clearing and settlement operations for commodity futures markets across the country. Key shareholders of MCX include Financial Technologies (I) Ltd., State Bank of India (India’s largest commercial bank) & associates, Fidelity International, National Stock Exchange of India Ltd. (NSE), National Bank for Agriculture and Rural Development (NABARD), HDFC Bank, SBI Life Insurance Co. Ltd., Union Bank of India, Canara Bank, Bank of India, Bank of Baroda and Corporation Bank.

Headquartered in Mumbai, MCX is led by an expert management team with deep domain knowledge of the commodity futures markets. Through the integration of dedicated resources, robust technology and scalable infrastructure, since inception MCX has recorded many first to its credit.

Inaugurated in November 2003 by Shri Mukesh Ambani, Chairman & Managing Director, Reliance Industries Ltd, MCX offers futures trading in the following commodity categories: Agri Commodities, Bullion, Metals- Ferrous & Non-ferrous, Pulses, Oils & Oilseeds, Energy, Plantations, Spices and other soft commodities.

MCX has built strategic alliances with some of the largest players in commodities eco-system, namely, Bombay Bullion Association, Bombay Metal Exchange, Solvent Extractors' Association of India, Pulses Importers Association, Shetkari Sanghatana, United Planters Association of India and India Pepper and Spice Trade Association.

Today MCX is offering spectacular growth opportunities and advantages to a large cross section of the participants including Producers / Processors, Traders, Corporate, Regional Trading Centers, Importers, Exporters, Cooperatives, Industry Associations, amongst others MCX being nation-wide commodity exchange, offering multiple commodities for trading with wide reach and penetration and robust infrastructure, is well placed to tap this vast potential.

Saturday, March 11, 2006 | |

Sunday, March 05, 2006 

GREEN SHOE OPTION

The brief lecture on Green Shoe option was given by our finance faculty Prof. Tapas Sir are as follows:
  • In case an issuer company is making an initial public offer of equity shares through the book building mechanism, the company can avail of the Green Shoe option (GSO) for stabilizing the post listing price of its shares
  • A company desirous of availing the option granted by this Chapter, shall in the resolution of the general meeting authorizing the public issue, seek authorization also for the possibility of allotment of further shares to the ‘stabilizing agent’ (SA) at the end of the stabilization period.
  • The company shall appoint one of the Lead book runners, amongst the issue management team, as the “stabilizing agent” (SA), who will be responsible for the price stabilization process, if required.
  • The SA shall also enter into an agreement with the promoter(s) who will lend their shares, specifying the maximum number of shares that may be borrowed from the promoters, which shall not be in excess of 15% of the total issue size.
  • The details of the agreements shall be disclosed in the Red Herring prospectus and the final prospectus.
  • The Lead Book Runner, in consultation with the SA, shall determine the amount of shares to be over allotted with the public issue.
  • The stabilization mechanism shall be available for the period disclosed by the company in the prospectus, which shall not exceed 30 days from the date when trading permission was given by the exchange(s).
  • The SA shall borrow shares from the promoters of the company to the extent of the proposed over-allotment. These shares shall be in dematerialized form only.
  • The money received from the applicants against the over allotment in the green shoe option shall be kept in the GSO Bank Account, distinct from the issue account and shall be used for the purpose of buying shares from the market, during the stabilization period.
  • The prime responsibility of the SA shall be to stabilize post listing price of the shares. To this end, the SA shall determine the timing of buying the shares, the quantity to be bought, the price at which the shares are to be bought etc.
  • On expiry of the stabilization period, in case the SA does not buy shares to the extent of shares over-allotted by the company from the market, the issuer company shall allot shares to the extent of the shortfall in dematerialized form to the GSO Demat Account, within five days of the closure of the stabilization period. These shares shall be returned to the promoters by the SA in lieu of the shares borrowed from them.

Sunday, March 05, 2006 | |

Friday, March 03, 2006 

Budget Update on Financial Sector, ....

BUDGET ESTIMATES 2006-07
• Plan Expenditure: estimated at Rs. 172,728 crore, up by 20.4%.
• Non-Plan Expenditure: estimated at Rs. 391,263 crore, up by 5.5%
• Revenue Deficit: estimated at Rs. 84,727 crore, 2.1% of the GDP.
• Fiscal Deficit: estimated at Rs. 148,686 crore, 3.8% of the GDP.

FINANCIAL SECTOR
• Banking, Insurance and Pensions: net capital support to banking sector stands to be Rs. 22,808 crore, it has to be restructured; Bill on insurance to be introduced in 2006-07.
• Capital Market: limit on FII investment in Government securities to be increased to $2 billion from $1.75 billion; limit to FII investment in corporate debt to be $1.5 billion from $0.5 billion; ceiling on aggregate investment by mutual funds in overseas instruments is to be raised to $2 billion from $1 billion with removal of requirements of 10% reciprocal share holding.

FISCAL CONSOLIDATION
• Twelfth Finance Commission: Rs. 94,402 crore to be released as states' share in gross tax revenues.

SERVICES SECTOR
• Tourism: development of 15 tourist destinations and circuits to be undertaken; 50 villages with core competency in handicrafts and other related work to be identified and developed; 4 new institutes of hotel management to come up in Uttaranchal, Chhattisgarh, Haryana and Jharkhand; plan allocation is increased to Rs. 830 crore from Rs. 786 crore.
• Foreign Trade: the share in exports to be doubled by 2008-09.

INVESTMENT
• Equity support from the Government of Rs. 16,901 crore and loans of Rs. 2,789 crore to Central PSEs, including Railways; to make india a hub for gems and jewelry.

SERVICE TAX
• Service tax rate increased to 12% from 10%.
• New services to be included like ATM operations, maintenance and management, share transfer agents, sale of space or time (other than print media), sponsorship of events (other than sports events), ship management, etc.
• Leasing and hire purchase to be treated as loan transactions.
• Proposal to set April 1, 2010 as the date for introducing Goods and Service Tax (GST).

Friday, March 03, 2006 | |

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