Cautious start expected: Wednesday Market Preview

Wall Street closed lower on Tuesday on tepid economic news while most markets in Asia softened after opening higher in early trade despite analysts’ optimism on the Japanese economy

The Indian market is likely to see a cautious opening on mixed global cues. Wall Street closed lower on Tuesday on tepid economic news while most markets in Asia softened after opening higher in early trade despite analysts’ optimism on the Japanese economy, brushing aside negative US economic indicators. The SGX Nifty, which opened in the green, was 12.50 points at 2,481.50, down from its previous close of 2,494.

The market continued its upmove yesterday despite the Asian pack witnessing a mixed trend in the morning. But volatility soon crept in, taking the indices to the day's lows in mid-morning trade. Seizing the opportunity, investors resorted to buying at lower levels, pushing the market up into the positive zone. Fluctuations continued for some time until another upmove gave the market some momentum. But the uptick was short-lived as the indices pared most of the gains, albeit ending in the green for the third straight day. 

The Nifty closed 25 points up at 5,481, while the Sensex ended 72 points up at 18,274. The Nifty's next resistance is at 5,555. As we mentioned on Monday, if this level too is crossed in the next two days, the market will move up substantially-towards 5,700 and 5,800.

Stock markets in the US closed lower overnight on weak economic indicators. Data from the Labor Department showed import prices climbed 1.5% in January, boosted by higher costs for commodities like food and fuel. Besides, US retail sales rose just 0.3% in January, less than the 0.6% rise economists had expected. Besides, business inventories in December rose to their highest levels in nearly two years, pointing to a slowdown.

The Dow fell 41.55 points (0.34%) at 12,226.64. The S&P 500 shed 4.31 points (0.32%) at 1,328.01 and the Nasdaq declined 12.83 points (0.46%) at 2,804.35.

Markets in Asia softened a bit after opening higher in early trade on Wednesday, despite analysts’ optimism on the Japanese economy. Nomura Research Institute in a report dated 14th February said that Japan will emerge stronger in the first half of 2011, instead of its earlier prediction of the second half. Upgrades of corporates by analysts also lifted investor sentiments in the region.

The Nikkei 225 gained 0.39%, the Seoul Composite rose 0.05% and the Taiwan Weighted added 0.11%. On the other hand, the Shanghai Composite declined 0.28%, the Hang Seng fell by 0.26%, the Jakarta Composite lost 0.21%, the KLSE Composite fell 0.15% and the Straits Times was down 0.23% in early trade.

Back home, media reports said that the Central Bureau of Investigation (CBI) on Tuesday questioned a top executive of Unitech as part of a probe into a telecom corruption scandal that has roiled politics and spooked investors in Asia's third-largest economy.

Unitech managing director Sanjay Chandra was summoned by the CBI to answer questions over his role in a case that charges his firm was favoured by a former telecom minister when telecom licences were issued in 2008.


SEBI proposes XBRL reporting system for mutual funds

To start with, SEBI is likely to make the new XBRL business reporting mechanism mandatory for mutual funds and then expand this system to other segments in phases

New Delhi: The Securities and Exchange Board of India (SEBI) has proposed a new reporting system for mutual funds based on XBRL technology-a globally accepted standardised business reporting tool that enables easy dissection of bulk documents without delay, reports PTI.

SEBI, which regulates fund houses, has issued a draft structure of the proposed XBRL (eXtensible Business Reporting Language) system for all the regulatory filings to be made by mutual funds.

XBRL technology enables computers read and divide the information provided in the filings under various heads and thus makes it easy to find any relevant details and to identify any irregularities.

The market watchdog has been working to put in place a unified regulatory filing system for all listed companies and market entities in a standardised format based on XBRL technology.

To start with, SEBI is likely to make the new business reporting mechanism mandatory for mutual funds and then expand this system to other segments in phases.

"SEBI intends to set up a comprehensive reporting, filing and dissemination system for filing of information reports in XBRL by listed entities, registered intermediaries and other entities," a senior official said.

The new system, called SUPER-D (SEBI Unified Platform for Electronic Reporting - Dissemination), is being developed in such a way that it is capable to manage simultaneous filing of 500 documents on normal days and have peak-period capacity to handle 15,000 simultaneous filings.

Besides disseminating the information on real-time basis to investors and others, the XBRL technology-based new system will also help SEBI, as also other regulatory and investigative agencies in monitoring any irregularities in the affairs of companies and market intermediaries.

In addition to mandatory regulatory filings, including financial statements, the entities would have to use the new XBRL-based platform for all their reporting purposes to the regulator, the official added.

The system would also help in analysing the data for research and regulatory purposes and would have provision for automated report generation for regulatory purposes.

Once the system is put in place, all listed companies, as also market entities like foreign and domestic institutions and brokerages would need to make all their regulatory filings, including financial reporting and other disclosures, to the new unified platform in a common standardised format.

Currently, BSE and NSE have a XBRL-based financial reporting platform for listed companies for all their filings and the system helps the investors get real-time access.



R Balakrishnan

6 years ago

It is sad that mutual funds have to incur a cost for doing all this. In any case they are so over regulated, wonder why this ? SEBI should have first gone to the companies and started the reporting in whatever the eff language they want. This seems like a favour to someone.
SEBI used to have EDIFAR, which they discontinued. Cos do not disclose subsidiary accounts.
Leaving all this, SEBI is promoting some stupid language at the expense of an already tortured industry.

Helios & Matheson fined Rs50 lakh by SEBI for financial irregularities; vMoksha co-founder also penalised

H&M was investigated for making false announcements to influence the stock price and hiding information about acquisition of vMoksha

The Securities and Exchange Board (SEBI) of India has finally imposed a Rs50 lakh penalty on controversial Helios and Matheson (H&M) Information Technology, which has long been under the scrutiny of regulators for alleged financial irregularities.

The SEBI order was issued on 31 January 2011 and the company reported the matter of the fine to the Bombay Stock Exchange (BSE) on Friday. The issue mainly concerns some fake and favourable announcements that the company made to the stock exchange in order to influence the movement of the stock price.

SEBI had said in a show-cause notice to the company that "H&M had made various favourable corporate announcements during the investigation period, that is about the issue of bonus shares, dividend, and declared favourable unaudited quarterly results, etc., besides the announcement of acquiring three entities of vMoksha Technologies Pvt Ltd." SEBI also charged the company with not disclosing the status of the profitability of vMoksha companies that it allegedly acquired.

Incidentally, Rajeev Sawhney, a co-founder of vMoksha Technologies, has been fighting a relentless battle, even knocking on the doors of various regulators, including SEBI and the Reserve Bank of India (RBI), as well as the Ministry of Corporate Affairs, to expose dubious issues over the acquisition of vMoksha.

The company levelled counter charges of 'insider trading' against Mr Sawhney and this was also investigated by SEBI. Interestingly, on the same day that SEBI issued orders against H&M, it also passed orders against Mr Sawhney and fined him Rs 25 lakh.

H&M has filed winding up proceedings against vMoksha in Bengaluru and there is a separate arbitration proceeding pending between H&M and vMoksha which has been delayed due to the death of the arbitrator and the lawyer.

SEBI's order says that H&M "failed to make announcements/ disclosures with regard to price-sensitive information" and "had not informed the stock exchange about the interim developments such as (the fact that) its attempt to acquire three vMoksha companies had not materialised in the stipulated time period, i.e. within 120 days as specified in the SPA (share purchase agreement) and the judicial/arbitration proceedings which started in relation to the same".

H&M was under the scanner of the Enforcement Directorate (ED) in March 2008 and raids were conducted at the company's headquarters in Chennai. Moneylife learned that the raids were based on investigations by the RBI which revealed foreign exchange violations in the vMoksha deal and the reports were given to the ED in November 2007.

Moneylife has also reported about financial irregularities in the acquisition of vMoksha by H&M. The battle started in 2005, when H&M announced a $19 million buyout of vMoksha, co-founded by Mr Sawhney and Pawan Kumar (former CEO of the controversial DSQ Software). Mr Sawhney put in the money and Mr Kumar managed the operations.

Mr Sawhney realised that he had been kept in the dark about many aspects of the deal. For instance, he found that instead of receiving $19 million, a bank account had been 'fraudulently' opened with the State Bank of Mauritius in the name of vMoksha that was used to borrow US$13.5 million with the help of a fake board sanction and some false entries. That money was remitted to H&M ostensibly for subscription of redeemable preference shares on 28 June 2005.  (Read: Helios & Matheson under the scanner)

H&M has also informed the BSE that it plans to appeal to the Securities Appellate Tribunal (SAT) against the SEBI order. Mr Sawhney has also said that he will appeal against the SEBI order against him.


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