The website has a useful section where members can share details of defaulter clients who might disturb the market equilibrium
Market participants would now need to think twice before they default as a new website launched by the BSE Brokers Forum has a section where members can share information about defaulting clients.
The BSE Brokers Forum (incorporated in 1993) launched its website (www.bsebrokersforum.com) yesterday at the BSE Convention Hall, Mumbai. The website was launched by JN Gupta, executive director, Securities and Exchange Board of India.
The website has powerful features for assisting the trading members of the stock exchanges in their day to carry out daily activities—like a compliance calendar where compliances deadlines would be readily available to members.
Those looking for a job in the financial markets have a reason to cheer as the website also has an employer’s corner wherein job-seekers can find vacancies.
The striking feature of the website is the section dealing with client defaults.
Here, members can share between themselves details of defaulter clients. Due to the transparency created by the information shared in this process, it is expected that activities of rouge elements who try to disturb the market equilibrium by ‘broker hopping’—defaulting at one member and trading at another—would be curtailed.
Any important documents and new rules by either the NSE or BSE can be downloaded from the ‘downloads’ section.
US President’s comments weighed heavily on Indian and Asian markets
The Indian market continued its downtrend following weak global cues after US President Barack Obama proposed limiting risk-taking at US banks. The market however recovered from the day’s low (16,608) on the back of Reliance Industries’ (RIL) better-than-expected December quarter result and the comment by Kaushik Basu, chief economic adviser to the finance ministry, that the economy will return to a 9% growth rate by the next fiscal year.
At the end of the day, the Sensex declined 191 points from the previous day’s close to 16,860 while the Nifty closed at 5,036, down 58 points. India VIX, which measures the market’s expectation of volatility over the next 30 calendar days, surged for the second day in a row by 5.74% to 24.85. India VIX is a volatility index based on the S&P CNX Nifty index option prices.
At 12:00 hrs IST, the Sensex was trading at 16,905, down 145 points from the previous day’s close, and the Nifty was trading at 5,047, down 46 points.
At 15:00 hrs IST, the Sensex was trading at 16,861, down 189 points, while the Nifty was down 56 points at 5,038.
Index heavyweight RIL ended flat after the company announced its December 2009 quarter results. Net profit rose 14% to Rs4,008 crore and sales were up 80% at Rs56,856 crore. Analysts had estimated Rs3,954.60 crore net profit and Rs48,785 crore sales.
Idea Cellular shot up 8% after reporting better-than-expected third-quarter numbers. The telecom service provider saw a 25% growth in revenue and a 12% rise in profit after tax over the same period last year.
Hindustan Copper surged 10% on reports that the mines ministry has approved selling a 10% stake in the copper miner.
Dynamatic Technologies signed an exclusive agreement with Reuben Power Plc to establish a national electric vehicle (EV) charging infrastructure network in the UK. The stock shot up 9%.
As per reports, the December 2009 results of 469 companies showed an average gain of 42.20% in net profit on a 20.30% increase in sales over the December 2008 quarter.
During the day, Pronab Sen, chief statistician, said that India’s October-December 2009 quarter economic growth is expected to be lower than the previous quarter, due to a contraction in farm output. He also said that the Indian economy, which grew at 7.9% in the September 2009 quarter, is expected to grow 6%-6.5% in the December 2009 quarter.
During the day, Asia’s key benchmark indices in China, Hong Kong, South Korea, Japan, Singapore and Taiwan were down by between 0.65%-2.56% on concerns of China’s economic growth leading to policy tightening.
According to research firm EPFR Global, investors have pulled $348 million from China equity funds in the week ended 20 January 2010, the biggest outflow in 18 weeks. Asia ex-Japan equity funds took in only $29 million because of the China-related outflows though global emerging market equity funds attracted $748 million in fresh money in the week to 20th January.
In the US markets on Thursday 21 January 2010, the Dow Jones Industrial Average slipped 213 points while the S&P 500 and the Nasdaq Composite were down 22 points and 26 points, respectively. The US markets slumped after Barack Obama proposed that banks be prohibited from running proprietary trading operations or investing in hedge funds and private equity funds. The move, intended to limit the risk of another financial crisis, comes as banks around the world are recovering from $1.7 trillion in losses and write-downs since the start of 2007.
The Indian market is expected to open lower on Monday 25 January 2010 on the back of weak European and US markets on Friday. However the Sensex will have support at 16,600. If this support is breached, we may see a severe sell-off.
The just-concluded Infomedia18 rights issue was undersubscribed, requiring promoters TV18 to pump in up to Rs12 crore of the unsubscribed portion of the issue, even as TV18 is haemorrhaging cash
It appears that media and entertainment company TV18’s promoters have bailed out its publishing unit Infomedia18’s just-concluded rights issue. A large part of minority shareholders of Infomedia shunned the Rs99.90 crore rights issue. So, the promoters of TV18 decided that the shareholders of TV18 should pony up Rs12 crore towards the expected under-subscription of the rights issue.
The TV18 group had bought Infomedia in 2007, hoping to add print publications to its bouquet of offerings. Infomedia publishes business directories (Yellow Pages), eight consumer titles and 12 trade titles. The business has been draining cash ever since TV18 took it over. In 2008-09, it lost Rs84.65 crore and in the first nine months of this year, it lost another Rs43.15 crore. To sustain the losses, Infomedia chose to make a rights issue which shareholders were lukewarm to.
While it is all right for the ambitious promoters of TV18 to continue to support and bail out an ill-advised move into print media, it leads to a piquant situation for the shareholders of TV18. Money has been flowing out unabated from the coffers of TV18—for the last six quarters at least. Almost all group companies like Infomedia18, Web18 and IBN18 have been reporting losses, unable to sustain the high-cost operations of businesses that have little edge. Indeed, as we reported yesterday, faced with negative cash flows, the companies are being forced to pile on debt in large quantities. But borrowing has its limits. The group has been making rights issues to keep the businesses afloat. A few months ago, TV18 concluded a rights issue to keep its own business going. Now it has supplied Rs12 crore from its own cash-strapped business to Infomedia18.
Last year, in a very ambitious move, Infomedia launched Forbes magazine in India. The magazine was priced at Rs50 in an inaugural offer, which has not been changed so far. The product was pushed through the traditional and primitive print distribution channels, such as hawkers, at enormous cost. Hawkers were given generous incentives to stock the copies. It is not clear whether it has been able to create a niche in the crowded business magazine market. Subsequently, it launched Entrepreneur, a magazine for the small business segment priced at Rs75. These initiatives have only added to the losses so far.
While declaring the results of the December quarter, the company management claimed that “the company is in the process of introducing new technologies in its product offering, so as to cater to newer markets and de-risk the revenue streams. New lines of business are also being added, which along with consolidation of existing products and introduction of new products in the publishing segment are expected to improve the revenues.” However, shareholders obviously remain sceptical about what these new winning products are and whether these would steady the boat.