MUMBAI: What started as a battle of egos between the country’s top two stock exchanges will end up permanently altering the lifestyles of those Reacting sharply to the Bombay Stock Exchange’s (BSE) move to bring forward trading hours by 10 minutes, the National Stock Exchange (NSE), on Wednesday, said it was advancing its timing by 55 minutes, to 9 am from Friday. The closing timing will remain the same at 3:30 pm. Left with no option, BSE said that it, too, will begin trading hours at 9 am from Friday. “We had extensive consultations with market participants...and the feedback was that now that BSE had changed its timings...so it was inevitable for NSE to change it also...so that there is no uncertainty created in the market,” Ravi Narain, managing director & CEO, NSE, told ET NOW. No exchange can afford to remain closed while the other is open, as the exchange that is open will set the benchmark prices. Also, brokers on the exchange that is closed at that time will not have a chance to react. The dual moves sparked angry reactions from broking firms, especially the smaller firms. “This is absolute nonsense and will inconvenience those employed in the industry. We, too, have our personal lives. This is not some school where timings can be changed arbitrarily, this is business,” said Suresh Mehta, chairman and managing director of Dhyan Stock Broking. | |
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But many are worried about the operational aspects, in addition to the strain that it will put on their daily routine. “Arranging for margin (funds) early on in the day will be a problem since banks don’t open that early,” said Nikhil Jalan of Kamal Kumar Jalan Securities. “If the exchanges are keen on extended hours, why not ensure that other systems too are in place.
And by extending trade timings by an hour, you can’t really snatch volumes from the Singapore exchange, because that market will still open ahead of us and people wanting to trade there will continue to do so,” he said. Some of the brokers who spoke to ET, on condition of anonymity, said that the regulator/exchanges should have conducted a proper poll before increasing the trading timings.
BSE’s move to steal a march on NSE provoked a much stronger reaction than what Asia’s oldest bourse had expected. The BSE was learnt to have been opposed to the idea of extended trading hours all along. Yet, it went ahead and advanced trade timing by 10 minutes, in the hope that it would improve liquidity. Incidentally, surveys conducted by the Association of National Exchange Members of India (ANMI) and the BSE Brokers Forum a few weeks ago, showed that the majority of brokers were opposed to the extension of trading hours.
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Heard on the street
Hostile takeover bid buzz boosts Gujarat
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Shares of Sanjay Dalmia-owned soda ash manufacturer Gujarat Heavy Chemicals surged nearly 10% on reports that the company may face a hostile takeover bid by a disgruntled shareholder, Pramod Jain. Pramod Jain holds a 5% stake in GHCL and Dalmia holds around 18% stake in the company.
This will be the second attempt by Pramod Jain to corner substantial stake in a Dalmia-owned company in a month’s time. Pramod Jain has already made an open offer for 25% of Golden Tobacco (GTC) shares at Rs 101 a share which is awaiting Sebi approval. Pramod Jain’s JP Financial Services and persons acting in concert hold a 6.47% stake in GTC. Gujarat Heavy Chemicals closed the day at Rs 54.85/share on Wednesday. GHCL is expected to hold a crucial AGM on December 31, 2009.
Of Dalmia’s a 18.26% stake in GHCL, 9% is already pledged with Indiabulls against an on-demand loan. The shares pledged with Indiabulls, however, may not be a threat after the two parties agreed to an out-of-court-settlement on December 14 over Dalmia’s default to a Indiabulls loan of Rs 225 crore.
Responding to an email query by ET NOW, Sanjay Dalmia said, “We, the promoters along with our friends, have comfortable levels of shareholding.” Sanjay Dalmia has a financial obligation of close to Rs 250 crore towards the settlement of dispute with Indiabulls Financial Services. Pramod Jain had said that he made the open offer for GTC shares to stop promoters from transferring the GTC-owned land in Mumbai as part of the payment to Indiabulls.
MFs’ asset base shrinks as cos redeem debt funds
Mutual funds are realising their worst fears with companies redeeming their investments from debt mutual fund schemes to make advance tax payments. According to fund industry sources, debt schemes — as a category alone — could see outflows to the tune of thousands of crores in December. Fund houses like ‘Bull-head MF’ ‘Real Care MF’, ‘Icy-Icy MF’, ‘Moon Life MF’ and ‘Reliable MF’ are said to have lost sizeable chunks of assets from their debt portfolios.
Advance tax payments by companies have risen over 30% in the third quarter of current fiscal, market experts opine. Prominent institutional investors like banks, manufacturing and service-related businesses have all paid higher advance tax than previous quarters. Come January, fund houses will compete with each other to coerce corporate treasury heads to reinvest in their debt schemes, in their bid to increase asset bases.
(Contributed by Nisha Poddar & Shailesh Menon)
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Strategy - Dec 17 2009
Morning Note - Dec 17 2009Natco Pharma
Jain Irrigation SystemsSrc: Economictimes, DP BLog