Exchange-traded futures to be in currency next quarter: SEBI

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Corporate houses and investors will be able to trade in currency futures at exchanges in three months. Capital market regulator Securities & Exchange Board of India (Sebi) said here on Tuesday it was working with the Reserve Bank of India (RBI) to help companies and investors hedge their currency risks by introducing exchange-traded currency futures.

Sebi chairman C B Bhave said the next priority was introducing interest rate derivatives, in line with the regulator’s intention to let market participants offer as many products as possible.

Sebi is also working on providing a trading platform for small and medium enterprises (SME), Mr Bhave said addressing a meeting of industry body Assocham.

Exchange-traded currency futures will provide a hedging option in the currency market. The move comes in the backdrop of a sharp volatility the rupee has witnessed by rising to a three-decade high last year and weakening to a 13-month low in 2008.


A Sebi-RBI panel set up to advise on the futures had recommended introduction of currency futures market, initially for dollar-rupee contract, to enable investors manage volatility in the currency market.

The committee had suggested the minimum size of the currency futures contract at the introduction should be $1,000. The government allows trading in currency derivatives, including forwards and options, that are contracts bought and sold on demand and not traded on exchanges. The Sebi chairman said the regulator will also start working on interest rate derivatives.

Small and medium size companies can hope to raise capital from the market without going through the rigorous compliance requirements that bigger companies have to.

“We also have to see that we give access to markets. There are a variety of issuers in the country. It cannot be that there are only top 500 companies in the country.

Therefore, the next thing that’s engaging our mind is creation of an exchange for small and medium enterprises,” the chairman said. Sebi also ruled out relaxing curbs imposed last year on participatory notes, a derivative tool that enables unregistered foreign investors to invest in stock markets.

“Sebi has notified the regulations that arose out of October decisions,” Mr Bhave told reporters when asked if there was a proposal to amend the regulations on participatory notes.

India allows sovereign funds to buy shares directly

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India's stock market regulator on Thursday allowed sovereign wealth funds, university funds, endownments and charitable trusts to register as foreign institutional investors (FIIs).

The Securities and Exchange Board of India (SEBI) said in a statement asset management firms founded by overseas Indians can also register as FIIs, which will enable them to buy and sell shares directly through a broker.

Last year, the regulator had curbed the use of participatory notes, or P-notes, used by unregistered foreigners to take exposure in Indian stocks.

At that time, SEBI had said it wanted portfolio investors to register to help it track the source of funds.

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IPO scam: SEBI starts disgorgement process

Securities market regulator SEBI on Thursday passed the first set of consent orders in the case relating to the IPO share allotment scam of 2006, signalling that the process of compensating retail investors who had lost out in share offerings is on course.


SEBI has signed the first set of consent orders with members of the Dadia family, who were identified as errant financiers in the IPO scam. In the process the regulator has said it had managed to collect Rs 71.75 lakh. Other entities such as financiers and market operators are also expected now to adopt this course of action to settle the proceedings initiated against them by SEBI.


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SEBI is expected to sign consent orders with several other entities who were accused of irregularities in the scam. The ill-gotten gains of these entities after disgorgement will then be used to compensate thousands of retail investors who had applied for shares in a raft of IPOs in the boom time period of 2005-06, but got short-changed as the allotment process was manipulated.


Retail investors who applied but failed to gain allotment in over 20 IPOs during 2005-06 will be compensated in line with the recommendations of the Justice Wadhwa Committee. For that to happen, SEBI will need to complete the consent orders with several other entities (reckoned to be over 80) disgorge the funds and then ensure that the total kitty is adequate to compensate investors. This could take some time but the process of disgorgement is now on track, an official said.


Last month, the Securities Appellate Tribunal in its order on Karvy said “it appears that after identifying financiers and beneficiaries of the scam, the board turned a Nelson’s eye towards them and chose to proceed against depositories and their participants and that too ex-parte.”


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“It is just a matter of days now,” said an official familiar with the development. “There are quite a few consent orders that are past their final draft stage and will be released as soon as they are signed by the authority concerned,” he added.


The SEBI-mandated committee headed by Justice Wadhwa, appointed to work out the modalities of compensating investors who were cheated in the IPO scam, had suggested that they be compensated in monetary terms. It had worked a compensation of Rs 92 crore for the investors who had applied for shares in the retail category in the said IPOs.


This money was to be part collected through selling the frozen shares of the entities implicated in the scam, an amount estimated to be between Rs 60 crore and 90 crore. The case goes back to 2006 when SEBI barred various individuals and entities from dealing in the securities market directly or indirectly until further directions.


These included Roopalben Panchal, Karvy Stock Broking, Magnum Equity Services, Deep Stockbroking, Anagram Securities, Jhaveri Securities and Indiabulls Securities, among others. Further, entities like HDFC Bank, IDBI Bank, Centurion Bank of Punjab, Motilal Oswal Securities and Jhaveri Securities were barred from opening fresh demat accounts for failing to adhere to ‘Know Your Client’ norms. However, few of the aggrieved parties managed to get some respite by appealing against the order.


Meanwhile, the compensation package was to be based on the closing price on the listing day for all these IPOs, which include IDFC, Jet Airways and Suzlon. In essence, investors who lost out in these IPOs should be paid the difference between the offer price and the closing price on the listing day, the committee had said in its report. People who did not get any allotments were to be compensated first. Recently, SAT vacated the appeal file by SEBI against the depositories, saying since the depositories were not actually directly responsible in the scam (as in not ‘gorged’ any money, disgorging from them was illegal.)


Interestingly, legal experts are not surprised that the market regulator has taken recourse to consent orders for winding up the IPO scam investigations. Entities that request for a consent order have to furnish a written waiver from taking any legal proceedings against SEBI concerning any of the issues covered by the consent order. The recent past has been witness to few instances where the Sebi order was turned down by the Securities Appellate Tribunal (SAT).

Bond yields at 1 year high - Stock market updates

Federal bond yields rose to one-year highs early on Friday, after hawkish comments by the central bank and on concerns soaring inflation may dampen investor appetite at a 100-billion-rupee ($2.3 billion) auction.

At 9:04 a.m. (0334 GMT), the 10-year benchmark bond yield was at 8.21 percent, its highest since late-June 2007, according to Reuters data and above 8.19 percent on Thursday. It has gained 11 basis points so far this week on top of a rise of 18 basis points in May. Reserve Bank of India Governor Yaga Venugopal Reddy said on Thursday the central bank was ready to take recourse to its full range of instruments to anchor inflationary expectations.


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June 2008 | BSE Closing Rates | NSE/NIFTY | NASDAQ | Closing rates

June 27/2008 - FRIDAY Closing rates :

BSE - Closing rate - 13802.22 - Down(-619.60)

NSE - Closing rate - 4136.65 - Down(-179.20)

NASDAQ - Closing rate - 2321.37 - Down(-79.89)


June 25/2008 - WEDNESDAY Closing rates :


BSE - Closing rate - 14220.07 - Up^113.49

NSE - Closing rate - 4252.65 - Up^61.55

NASDAQ - Closing rate - 2368.28 - Down(-17.46)



June 24/2008 - TUESDAY Closing rates :


BSE - Closing rate - 14106.58 - Down(-186.74)

NSE - Closing rate - 4191.10 - Down(-75.30)

NASDAQ - Closing rate - 2385.74 - Down(-20.35)



June 23/2008 - MONDAY Closing rates :

BSE - Closing rate - 14293.32 - Down(-277.97)

NSE - Closing rate - 4266.40 - Down(-81.15)

NASDAQ - Closing rate - 2406.09 - Down(-55.97)


June 18/2008 - WEDNESDAY Closing rates :

BSE - Closing rate - 15422.31 - Down(-274.59)

NSE - Closing rate - 4582.40 - Down(-70.60)

NASDAQ - Closing rate - 2457.73 - Down(-17.05)


June 17/2008 - TUESDAY Closing rates :

BSE - Closing rate - 15696.90 - Up^301.08

NSE - Closing rate - 4653.00 - Up^80.50

NASDAQ - Closing rate - 2474.78 - Up^20.28


June 16/2008 - MONDAY Closing rates :

BSE - Closing rates - 15395.82 - Up^206.20

NSE - Closing rates - 4572.50 - Up^55.40

NASDAQ - Closing rates - 2454.50 - Up^50.15


June 13/2008 - FRIDAY Closing rates :

BSE - Closing rates - 15189.62 - Down(-60.58)

NSE - Closing rates - 4517.10 - Down(-22.25)

NASDAQ - Closing rates - 2404.35 - Up^10.34


June 11/2008 - WEDNESDAY Closing rates :


BSE - Closing rates - 15185.32 - Up^296.07

NSE - Closing rates - 4523.60 - Up^73.80

NASDAQ - Closing rates - 2448.94 - Down(-10.52)


June 10/2008 - TUESDAY Closing rates :


BSE - Closing rates - 14889.25 - Down(-176.85)

NSE - Closing rates - 4449.80 - Down(-51.15)

NASDAQ - Closing rates - 2459.46 - Down(-15.10)



June 9/2008 - MONDAY Closing rates :


BSE - Closing rates - 15066.10 - Down(-506.08)

NSE - closing rates - 4500.95 - Down(-126.85)

NASDAQ - closing rates - 2474.56 - Down(-75.38)


June 5/2008 - THURSDAY Closing rates :


BSE - 15769.72 - Up^254.93

NSE - 4676.95 - Up^91.35

NASDAQ - 2503.14 - Up^22.66



June 4/2008 - WEDNESDAY Closing rates :


BSE - Closing rates - 15504.88 - Down(-457.68)

NSE - Closing rates - 4585.60 - Down(-130.30)

NASDAQ - Closing rates - 2480.80 - Down(-11.05)



June 3/2008 - TUESDAY Closing rates :


BSE - Closing Rates - 15962.56 - Down(-100.62)

NSE - Closing Rates - 4715.90 - Down(-23.70)

NASDAQ - Closing Rates - 2491.53 - Down(-31.13)


June 1/2008 - Markets closed - Sunday

Government opening forex trade in stock exchange for common man

Indian government is seriously considering of easing the norms(terms and conditions) for common man to start forex trading through indian stock markets including BSE(Bombay Stock Exchange) and NSE ( National Stock Exchange) or Nifty in near future.

The finance minister and members of all the stock exchanges of india had a meeting and final consent was given for the move. Common man must feel somewhat relaxed now as he/she can directly do forex trading in Stock exchange which was earlier possible for business houses and exporters as in earlier days the terms and conditions applicable for forex trading in stock exchanges were too restrictive and common man could not ever think for such trading in stock exchanges.

Also see How to start online share trading in stock markets?

This move would also make investment firms rethink of bringing back their investments back to indian subcontinent which were stopped due to government restrictions, so indians can see US dollar weakening with respect to Indian Rupee in near future and US $ will again come at under INR 40 due to this move.

Do's and dont's of Online trading in share market