Bombay HC adjourns MCX-SEBI case to 9th September

MCX-SX has approached the high court challenging a SEBI order that had rejected its application seeking permission to launch equity operations. The exchange is already operating in currency derivatives segment

Mumbai: The Bombay High Court on Friday adjourned hearing on the MCX-SX-SEBI case to 9th September, reports PTI.

The court heard the arguments from both, the Securities Exchange Board of India (SEBI) and the private sector bourse MCX Stock Exchange (MCX-SX).

MCX-SX has approached the high court challenging a SEBI order that had rejected its application seeking permission to launch equity operations. The exchange is already operating in currency derivatives segment.

Earlier this month the Bombay High Court had asked SEBI whether it would accept an undertaking from the promoters of MCX-SX that they would maintain their equity holding at 5% and not exercise the option of converting warrants into equity.

SEBI representatives had responded by saying that they would seek instructions from the regulator's board in this regard. As per the SEBI guidelines, no promoter of a stock exchange can hold more than 5% equity stake.

In the above case, Financial Technologies (FTIL) and Multi Commodity Exchange (MCX), promoters of MCX-SX, had reduced their equity stake to 5% by evolving a method wherein they gave warrants to 18 PSU banks.

They assured the court that the warrants would not be converted into equity.

In a petition filed on 19th July last year, Jignesh Shah-led MCX-SX had urged the high court to direct SEBI to grant clearance for commencing operations in the equity segment as it had complied with the guidelines issued by the regulator.

Three days prior to filing the petition, MCX-SX came out with a public notice expressing anguish at the delay in getting license and also at the misinformation campaign launched by rivals.

MCX-SX pleaded that although it had complied with all SEBI regulations and norms to commence operations, it was not given the permission to commence equity trading. It also alleged that the market watchdog was favouring a rival stock exchange.

In an advertisement earlier, MCX-SX, without naming the National Stock Exchange, had alleged that its rival was killing competition by offering free trading in currency derivatives, and thus making it difficult for it to get business and investors.

"There have been attempts by some elements at spreading misinformation to create doubts among our shareholders and to undermine our reputation and business for their benefit," MCX had said.

In an apparent attack on SEBI, it had said the go-ahead for doing full-fledged business was elusive despite MCX-SX having taken all the necessary steps to make it compliant to the relevant regulations about trading in equities, equity derivatives, interest rate derivatives, mutual fund and debt market among other instruments.

Although MCX-SX became operational in October 2008, it is offering only currency derivatives products at present.

The stock exchange had said that one of the key conditions put on it was related to bringing down promoters' stake and it did so with a 'capital reduction-cum-arrangement' scheme and that SEBI was informed about the same, way back in December 2009.

While the scheme was already approved by the board and shareholders, it also got the nod of the Bombay High Court in March 2010 and the same was also notified to SEBI on 7 April 2010, MCX-SX said.

But the exchange has got 'no response from SEBI in this regard' as of July 2010, it had noted in the public announcement.


Anna’s fast enters 12th day, Parliament set to discuss Lokpal

In a late night meeting between the government and Team Anna, law minister Salman Khurshid conveyed to the Gandhian's emissaries that a consensus should be built around the note struck by prime minister in his speech in Parliament on the Lokpal issue

New Delhi: Social activist Anna Hazare's fast entered into the 12th day Saturday as Parliament is all set to discuss the Lokpal (anti-corruption ombudsman) issue which could lead to the Gandhian calling off his hunger strike, reports PTI.

Concerns over his health were raised on Saturday morning after doctors said they were more worried than Friday night as the 74-year-old Gandhian's blood pressure has dipped while heart beat has increased.

"Anna is continuing his determination. But next few hours are decisive both ways. He is looking forward to the resolution of Parliament. Dr Naresh Trehan has examined him.

He looks cheerful and determined. But there are concerns," Team Anna member Kiran Bedi said.

Team Anna will be looking at the Parliament debate and adoption of a resolution would lead to the end of the fast.

The issue will now come up in Lok Sabha (Lower House of Parliament) when finance minister Pranab Mukherjee makes a statement on the Lokpal issue, setting the stage for a debate.

In a late night meeting between the government and Team Anna, law minister Salman Khurshid conveyed to the Gandhian's emissaries that a consensus should be built around the note struck by prime minister Manmohan Singh in his speech in Parliament on the Lokpal issue.

Asked whether the government had received any commitment from Team Anna, he said, "There are expectations but not a commitment."

The government hopes that "emergence of any form of consensus or convergence" during the day will persuade Mr Hazare about its "seriousness and willingness" to ensure there is good and strong Lokpal Bill.

As the fast crossed 260 hours, the Ramlila ground witnessed a thin presence of supporters.

The absence of the usual wave of umpteen number of supporters took the crew of TV news channels stationed at the ground and Hazare's supporters by surprise.

However, the volunteers said they expected strong numbers as the day progresses. Since it is a weekend, the number of supporters would increase, they said.

Security at the ground has been strengthened by police after a group of people clashed with cops in the wee hours of yesterday and created a ruckus.

The VIP gate, where the incident occurred at around 3am yesterday, has been secured by a strong posse of police and CRPF personnel. A Delhi Police videographer armed with a handycam has also been stationed there.


Share prices to fall further: Friday Closing Report

Nifty may see the lows of 4,680 again after 19 months

Worries about domestic economic growth following a cut in the growth forecast for the current fiscal by the Reserve Bank of India (RBI) and global concerns resulted in the market closing in the negative for a third day. Today, the Nifty broke the support of 4,750 which we have been suggesting for the past few days. With this drop, the Nifty dipped to the level last seen on 6 February 2010, which means that we are trading at nearly a 19-month low. The downtrend is expected to continue and we may see the index fall to 4,680.

The market opened flat this morning on domestic concerns, as the RBI noted in its annual report for 2010-11 that was released yesterday that economic growth could moderate to 8% during the current fiscal, from 8.5% recorded a year ago, due to unfavourable developments. Near double-digit food inflation for the week ended 13th August also weighed on the sentiment. The Nifty opened one point lower at 4,839 and the Sensex resumed trading at 16,156, up 10 point from its previous close.

The market gained in the first hour, registering an intra-day high of 4,872 on the Nifty and 16,526 on the Sensex. But, continuous selling by institutional investors dragged the indices lower by noon. The market extended its losses through the post-noon session, dipping to the day’s low in the last 30 minutes of trade. Both the benchmark indices dropped to below their psychological levels, the Nifty to 4,720 and the Sensex to 15,756.

However, the market closed off these lows, on a marginal pull-back. The Nifty declined settled at 4,748, down 92 points, while the Sensex ended the day at 15,849, a loss of 298 points.

The advance-decline ratio on the National Stock Exchange (NSE) was a dismal 263:1447.

The broader indices underperformed the Sensex today as the BSE Mid-cap index tanked 2.25% and the BSE Small-cap index tumbled 2.65%.

All sectoral indices settled in the negative with the BSE Realty (down 4.09%) emerging as the biggest loser. It was followed by BSE Metal (down 3.69%), BSE Oil & Gas (down 3.19%), BSE PSU (down 2.58%) and BSE Bankex (down 2.50%).

The gainers on the Sensex were Hero MotoCorp (up 2.70%), Mahindra & Mahindra (up 1.20%) and Infosys (up 0.68%). The losers were led by Jaiprakash Associates (down 7.58%), DLF (down 5.76%), Tata Steel (down 4.77%), Reliance Industries (down 4.61%), and Coal India (down 3.90%).

The major gainers on the Nifty were Hero MotoCorp (up 3.14%), M&M (up 1.23%), Infosys (up 1.13%), Jindal Steel (up 0.13%) and TCS (up 0.03%). The main losers on the index were Reliance Capital (down 12.33%), Reliance Communications (down 11.11%), JP Associates (down 7.42%), Reliance Infrastructure (down 6.53%) and DLF (down 6.25%).

Markets in Asia settled mostly lower as investors awaited announcements by US Federal Reserve chairman Ben Bernanke, who is expected to chalk out the road ahead for the world’s largest economy in a speech later tonight. Japan’s benchmark Nikkei 225 rose 0.3% in volatile trade as prime minister Naoto Kan announced that he was resigning 14 months into the job.

The Shanghai Composite lost 0.12%, the Hang Seng fell 0.86%, the Jakarta Composite shed 0.07%, the KLSE Composite declined by 1.36% and the Straits Times slipped 0.63%. On the other hand, the Seoul Composite surged 0.81% and the Taiwan Weighted rose 0.46%.

Back home, foreign institutional investors were net sellers of stocks worth Rs1,440.55 crore on Thursday. On the other hand, domestic institutional investors were net buyers of equities worth Rs385.01 crore.

Indian drugmaker Indoco Remedies has entered into agreement to make generic products sold by South Africa’s Aspen Pharmacare in Australia. With this new development, the company’s existing relationship with Aspen will be strengthened. Indoco ended 5.08% lower at Rs386 on the NSE.

Private sector carrier Kingfisher Airlines has received its board’s nod to raise up to Rs2,000 crore through a rights issue. The board has also amended the terms for the issue of optionally convertible debentures that were issued on 3rd January. The stock plunged 6.40% to end at Rs23.40 on the NSE.

Diversified industrial company Ingersoll Rand today announced its entry into the cold chain consultancy segment in India. The company plans to provide a host of services and solutions to address issues of storage, transportation and delivery of perishable products. The stock closed at Rs438.10, down 3.17% on the NSE.


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