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Sunday, April 30, 2000

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BSE to float IPO next year -- Rathi

CHENNAI, APR 29: The Bombay Stock Exchange (BSE) is planning to come out with its initial public offer (IPO) some time during the year 2001-2002. India's premier exchange is in the process of restructuring which should see it take a corporate form (presently it is a trust) by March 2001.

These were revealed by BSE president Anand Rathi at a press meet here on Saturday. Speaking on the exchange's future plans, he said that BSE had a vision to become an exchange of choice globally by the year 2005 both in terms of technology and cost of transaction.

BSE, during the year 1999-2000, had posted an average daily turnover of Rs 2,729 crore compared to Rs 1,284 crore in the previous fiscal. The number of trader work stations have gone up from 2,310 (205 cities) to 3,803 (253 cities) during the period. The exchange hopes to be present in 1,000 cities by March 2001.

The exchange, he said, had become one of the safest place to trade with a trade guarantee fund corpus of Rs 1,600 crore and a stringent margin system which calls for margins in cash form to the extent of 60 per cent with bank guarantees making up the rest. He once again reiterated the need for higher cash component in the margin system so as to curtail volatility and make market a safer place to trade.

It is planning to achieve leadership in products, technology and volumes, he said. Derivatives trading in index futures is expected to begin by March 2000, exchange level Internet trading by July 2000, Indian Depository Receipts and badla in rolling settlement are other things that are proposed.

RAIDS ON BROKERS: Rathi urged the government agencies conducting investigations into the dealings and tax liabilities of important brokers, to make such investigations confidential and away from media glare. He said that raids and investigations into the financial affairs of sensitive members of the capital market tended to cause market upheavals.

There was no way the market could be insulated from any repercussions of such investigations except to keep such investigations confidential, he told a questioner.

Rathi said that since the capital market was now globalised, repercussions in a major market such as nasdaq was bound to have impact on other markets, including those in India. However, in the recent past this was limited more to `new economy' stocks such as infotech and communication and old economy stocks were not much vulnerable.

He said the BSE would extend trading facilities to 1000 new cities in the country this year thereby covering the entire georgraphical region of the country. The smaller exchanges would be made member exchanges of the bse, he added. With Insat-3B becoming operational, the BSE would have access to one transponder to have enough bandwidth, he said.

MARGIN ON 3 SCRIPS: The BSE has slapped a 25 per cent special margin on three scrips - Hitech Entertainment, Mascon Global and Sun Earth Ceramics - effective from Friday, April 28.

The price movements of these three scrips are strange, to say the least. Operators on the Mascon Global counter believe in the fastest way to get to a point - so the prices of the shares have been hitting the upper circuit limits virtually every trading day right from last year. On January 14, this year, the scrip was trading at Rs 50.25, on February 3 the price had risen to Rs 323, while on March 14 it was Rs 697.

At the end of the month, the price had sharply increased to Rs 1,024 and on April 17, the scrip breached the 2000-mark. On April 27, the share prices were at Rs 3,445, still at its upper circuit.

Hitech, has adopted the slow and sure growth, increasing by small amounts each day. In January it was Rs 37.20. It dipped to Rs 28.95 a month later but jumped up to Rs 42.50 in March. On April 3, the shares were trading at Rs 57.90, and has made a gradual climb to nearly Rs 64 per share.

Sun Earth Ceramics, which was trading at around Rs 225 in March beginning, went down to Rs 190 by the end of the month. It dipped further to Rs 179 in April first week but has since risen up to Rs 219 on April 27. Some intra-day volatility characterises the movement of the scrip.

Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.


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