Govt limits number of commodity bourses at eight

New Delhi: The government has decided to cap the number of national commodity exchanges at eight to foster sustained growth of the commodity futures market, reports PTI.

"The consumer affairs ministry in consultation with the sector regulator Forward Markets Commission (FMC) has decided to allow only eight commodity exchanges to function at the national level," a senior official told PTI.

At present, four national exchanges - MCX, NCDEX, NMCE and ICEX are operating at national level, while the rest two - Ahmedabad Commodity Exchange (ACE) and the Universal Commodity Exchange (UCE) are yet to be launched.

Recently, Gontermann Peipers (India), promoted by Pramod Mittal of the Ispat group, has placed an application with FMC for setting up a national commodity exchange.

The consumer affairs ministry frames policies for commodity futures market, while the Forward Markets Commission (FMC) regulates the functioning of four national and 19 regional exchanges.

"If UCE and Gontermann get permission from FMC, then there would be a total of seven national commodity exchanges in the country," the official said, noting that the number of national commodity bourses are higher as compared to three stock exchanges in the securities market.

Though there is no such cap for stock exchanges in the equity market, the regulator Securities and Exchange Board of India (SEBI) has permitted only NSE, BSE and MCX-SX to function at the national level, the official said.

Meanwhile, an FMC official said: "It was felt that the mushrooming of national commodity exchanges would not be a good sign as quality growth was more necessary than just having a mere number of exchanges."

So, it was necessary to put a cap as there was rush of applications to set up a national commodity exchanges in the last few months, the official said.

The official further said that the ministry has also decided to set up a committee to review the performance of the existing national commodity exchanges.

According to FMC, the turnover of 23 commodity exchanges was a record Rs 70 lakh crore in 2009 and is expected to rise further by 15% to Rs 80 lakh crore this year-end.


PE deals zoom seven-fold to over $1 billion in Aug

New Delhi: Private equity firms have invested over $1 billion in Indian companies in August, more than 7% from the year-ago period, with investors increased preference towards telecom and financial services sector, reports PTI.

"Total private equity (PE) investment in India grew 7.5 times to $1.3 billion as against $179 million in August 2009," according to data compiled by deal space research firm VCCEdge.

While comparing from July, deal value in August was up 60% due to some large deals during the month.

"August 2009 had seen the lowest monthly deal value since the beginning of 2009, with the exception of March '09 which was at $136 million. Since then an upward trend has been witnessed with deal value peaking during August 2010, suggesting a recovery from last year's slowdown," the report noted.

Upturn was also witnessed in terms of the number of deals recorded in the last month. In August this year 35 PE transactions were posted, against 24 deals registered in same period in 2009.

As many as 35 companies saw PE investment pouring during the period, while PE firms made an exit from 18 other companies.

PE firms generally exit from their investment through buyback of shares by promoters, open market transactions, merger and acquisitions and public offers.

During the month, industrial, telecom and finance were the most targeted sectors for investment with deals valued $309 million, $304 million and $298 million, respectively.

Two of the largest investments in the month were made by Macquarie-SBI Infrastructure Fund. It invested $304 million in Viom Networks and $200 million in GMR Airports Holding.

Besides, other large deals include the $290 million investment made by Blackstone Advisors in Moser Baer Projects.

At the same time, there were 18 exits worth $249 million in August 2010. These included private equity firms - Kubera Cross Border Fund Ltd, Walden International, Global Internet Ventures - $100 million exit from Venture Infotek Global and Citi Venture that exited its investment in Emaar MGF Land Ltd.


FM expects industry to grow by 12%-13% this year

New Delhi: Enthused by 13.8% industrial growth in July, finance minister Pranab Mukherjee today pegged industrial expansion at 12%-13% this year, reports PTI.

He also said the manufacturing sector, which generates jobs, was performing well.

"I expect average industrial growth to be between 12%-13% per cent this year. Manufacturing, which generates employment, is doing well," Mr Mukherjee told reporters.

When asked whether the Reserve Bank of India (RBI) will further tighten monetary policy to combat inflation, the finance minister said, "The government and RBI are watching. Let us see. We will take actions as the situation demands."

The RBI is expected to raise its short-term borrowing and lending rates at its 16th September mid-quarter review.

Overall inflation for the month of July was 9.97%, while figures for August are expected next week. Food inflation shot up to 11.47% towards the end of August from 10.86% in the previous week.

Industrial growth figures for July exceeded expectations by accelerating to 13.8% in July from 7.2% a year ago. Most experts had earlier pegged the growth to be lower, in single-digit figure.

Manufacturing grew by 15% in July against 7.4% a year ago. However, industrial growth stood at 11.4% in the first four months of this fiscal.

The government expects the industry sector, which constitutes little less than 20% to India's economy, to grow by 8.5% this fiscal.


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