Stocks
Nifty, Sensex may rally: Monday closing report

Nifty may head higher if today’s low holds and closes above 6,210

Monday was the fifth consecutive session when the indices closed in the negative but the market recorded the lowest fall, giving some hope to the bulls. The benchmark moved in the narrow range on both the sides of previous week’s close. We expect the market to head higher as a short-covering rally.

 

The Sensex opened at 20,714 while the Nifty opened at 6,168. The benchmark immediately hit its day high and started its down ward journey. The Sensex moved down to the level of 20,638 after hitting the high of 20,765 and closed at 20,660 (down 56 points or 0.27%) while the Nifty hit the low of 6,146 after reaching upto 6,183 and closed at 6,155 (down 14 points or 0.22%). Today the indices hit their lowest levels since 29 November 2013. The NSE recorded a volume of 54.22 crore shares.

 

Among the other indices on the NSE, the top five gainers were IT (1.70%); MNC (1.67%); Nifty Junior (1.01%); Midcap 50 (0.57%) and Media (0.57%) while the top five losers were Energy (1.15%); FMCG (0.73%); PSU Bank (0.64%); Auto (0.57%) and Commodities (0.40%).

 

Of the 50 stocks on the Nifty, 20 ended in the green. The top five gainers were Sesa Sterlite (4.09%); Infosys (2.29%); Power Grid (1.74%); Tata Power (1.61%) and Coal India (1.38%). While the top five losers were M&M (2.89%); Jindal Steel (2.85%); Sun Pharma (2.48%); Reliance Industries (2.28%) and Bharti Airtel (2.23%).

 

Of the 1,210 stocks on the NSE, 475 closed in the positive, 674 closed in the negative while 61 remained unchanged.

 

Inflation based on the WPI accelerated to 7.52% in November 2013, from 7% in October 2013, data released by the government today. WPI for September 2013 was revised upwards to 7.05% from 6.46% reported earlier. Except for NZSE 50 (up 0.39%) all the other Asian indices closed in the negative. Nikkei 225 (fell 1.62%) was the top loser.

 

Chinese manufacturing index fell to a three-month low, the initial results from HSBC's monthly survey showed today. HSBC/Markit China manufacturing Purchasing Managers' Index eased to 50.5, down from November's final reading of 50.8. Shanghai Composite was the second top most loser among the Asian indices fell 1.60%.

 

However, European indices were trading very strong. The latest data showed that Markit's German preliminary manufacturing purchasing managers' index strengthened in December. The German economy is ending 2013 positively, according to a survey released Monday, with new business, confidence and employment all growing in December. Markit's preliminary composite purchasing manager’s index was little changed in December, slipping marginally to 55.2 from 55.4 in November.

 

The French composite PMI fell to a seven-month low of 47.0 and signaled a steady contraction in activity.

 

Markit's Flash Eurozone Composite purchasing managers' index, which gauges business activity across thousands of companies large and small, rose to 52.1 in December from 51.7 last month. Growth in new orders rose the most since June 2011, while the manufacturing PMI rose to 54.8 from 53.1, the highest in nearly three years. US Futures were trading strongly in the positive.

User

Sexual harassment insurance premium rises based on profile of key personnel

Companies employing likes of Phaneesh Murthy and Tarun Tejpal will have to shell out higher premium for directors and officers insurance. Past record of mismanagement or harassment by the key personnel will hike the premium

Sexual harassment cases involving Phaneesh Murthy, Tehelka’s Tarun Tejpal and former Supreme Court judge AK Ganguly have highlighted the need for corporates to buy Directors and Officers (D&O) insurance to cover several business risks and liabilities. The annual growth of D&O insurance in India is at a spectacular 30% to 40%. While the chances of litigation are definitely higher in the US than in India, exposure to scams, hefty legal fees charged by senior advocates and global practices is an impetus for buying insurance rather than taking the risk of having to defend a possibly frivolous lawsuit claiming crores in damages. Some D&O policies may be silent about covering lawsuits due to sexual harassment and hence buyers need to be aware of it. Each policy is usually tailored for the respective clients and hence the clause can be added.
 

Register and attend upcoming (18th December) Moneylife Foundation seminar in Mumbai - SEXUAL HARASSMENT AT THE WORKPLACE
 

What D&O covers and reasons for increase in significance? Satyam scam was a wake-up call for companies. Corporate liability is not just related to sexual harassment, but includes wider aspects like Mis-statement in prospectus, Inaccurate statement of financial conditions, Errors in annual accounts, Conflict of interest, Lack of judgment, diligence, good faith, Mismanagement of funds, Unfair allotment of shares, Using insider information, Unwarranted dividend, salary, compensation payments, Unfair dismissal of an employee and so on. All these are cases for D&O cover.

According to Sushant Sarin, Sr VP - Commercial Line, TATA AIG General Insurance, “Directors and officers take out D&O insurance to protect themselves against a multitude of wrongful act, error or omission allegations against them in the course of their official duties. Sexual harassment allegations are no doubt covered but represent only one of multiple types of allegations. In our experience, D&O insurance is fast becoming recognized by Company managements as a policy they must have to secure themselves against personal liability for managerial acts. That this policy also responds to allegations of sexual harassment makes it that much more important as a risk management tool in addition to setting up Vishakha committees etc.”
 

There is a new reason to consider buying D&O insurance – new Companies Bill 2013. According to Dr Amarnath Ananthanarayanan, CEO and MD, Bharti AXA General Insurance, “New Companies Bill, 2013 has also created a conducive environment for selling D&O insurance in India - a lot of new measures have been taken to bring more clarity; for example, for the first time duties of directors have been defined in this bill, the concept of class action suits has been introduced, the definition of officer-in-default has been widened, restriction on the companies to indemnify its directors has been removed. In view of the above, in my opinion the D&O business is expected to grow significantly say by 60-70%.”
 

Sanjay Datta, Chief – Underwriting and Claims, ICICI Lombard, says, “There has been an increase in interest in the D&O cover across the board both because of the recent high profile cases and also because of New Company’s Act. There is a lot of interest from customers on how the policy deals with these situations. We have written over 500 policies so far this year and have seen about a 30% increase in D&O business.”
 

D&O premium as per key personnel profile Sushant Sarin, says, “Corporate governance standards followed by companies are a factor in pricing the insurance cover. It is a norm to cover all directors and officers of a company rather than only some.” According to Dr Amarnath, “Director’s profile is an important factor while underwriting D&O policy. However, the underwriting philosophy may vary from one insurer to the other in terms of acceptance of risk.”
 

Sanjay Datta, says, “Though the policy covers not only the board of the company, we do look at the profile of the board and the important executives of the company. We are more cautious about underwriting risks where any of the key personnel have a past record of mismanagement or harassment. For a basic cover, a $1 million policy would cost about $2,000.”

 

What D&O won’t cover? Tata AIG view – “Under law, any contract that is against public policy is void. Accordingly, since it would be against public policy to cover fraud, an insurance contract cannot do so. However, this rule applies only if and when fraud has been established. Merely an allegation of fraud does not suffice to void a contract. When faced with an allegation of fraud, a director or officer will want to defend him/her against such allegation. For this, s/he would want to use the services of a capable lawyer which would mean considerable expense. The D&O policy pays such defense expenses incurred by directors and officers. If capable defense helps them establish their innocence the policy has served its purpose.”
 

Bharti AXA – “Any fraudulent act or omission or any wilful violation is excluded from the scope of D&O policy. The D&O cover usually provides for defence cost unless specifically excluded under the policy.” ICICI Lombard – “The D&O policy covers defence costs incurred by or on behalf of directors and officers in defending allegations of fraud. But the cover in the policy ceases in case the director has been convicted for or if he confesses to criminal acts including fraud.”
 

Read

Phaneesh Murthy iGate scandal: Time for Directors and Officers insurance?
 

Phaneesh Murthy: Let off by Infosys, sacked by iGate over sexual harassment charges


Phaneesh Murthy saga: Why insurers should refuse to cover serial offenders of sexual harassment

User

COMMENTS

ABHA CHAWLA MOHANTY

3 years ago

HOW MANY PUBLIC SECTOR UNDERTAKINGS esPECIALLY INSURERS FURNISH DIRECTORS profile???,..,DIRECTORS AND OFFICERS LIABILITY WILL BE SELF SERVING??

SuchindranathAiyerS

3 years ago

Whereas the "sexual harassment" and "domestic violence" laws enable the convenient black mail of men and there are women who are more than willing to take advantage, it doesn't take much for an enterprising insurance industry to put a few women up to hiking up the revenues rather than their whatever?

REPLY

Laazarus Dias Education Akademy

In Reply to SuchindranathAiyerS 3 years ago

Dear Suchindranath the calculation of premium is done by a highly qualified person called an Actuary (In india we have approx 250 persons qualified ) The calculation is based on a very complicated probability and statistical calculation. Do you think Women can be put up in a sexual harrasment case. Dont think so that any women worth her salt will get herself entangled in such a thing. Very rare that it will happen

ABHA CHAWLA MOHANTY

In Reply to Laazarus Dias Education Akademy 3 years ago

LAAZARUS DIAS EDUCATION AKADEMY,SIRS,YOU HAVE SUCCINCTLY PUT FORTH THE RATIONALE,..TROUBLE IS THE MANY SERVING OFFICERS DO DISSERVICE TO INSURANCE SECTOR BY MEDIOCRITY OF THINK ,AND, SERVICE,..THE MANDARINS OF FINANCE MINISTRY COULD NOT CARE LESS,,,UNLESS THE BOARDS OF ESpecially of insurance sectors held accountable AND "LIABLE "notwithstanding , their, clout ,sniggering and snide of insurance covers shall rule,..

Gopalakrishnan T V

3 years ago

a very innovative business with lot of business opportunities.

BSE to suspend trading in 28 companies for non-compliance

Trading in securities of the 28 companies will be suspended from 30th December due to non-compliance of the listing agreement, says BSE

BSE has said it will suspend trading in securities of 28 companies for the companies’ failure to comply with various provisions of the listing agreement. “Trading in securities of these 28 companies will be suspended from Tuesday, 30 December 2013 (being 15 trading days from issue of notice); on account of non- compliance with the provisions of the Listing Agreement,” BSE said.

 

The 28 companies which will face suspension are mentioned in below table.

 

Sr. No

Scrip Code

Company Name

1

532919

Allied Computers International (Asia) Ltd

2

501622

Amalgamated Electricity Company Ltd

3

531678

Anand Credit Ltd

4

517565

Ashco Niulab Industries Ltd

5

532542

Crew B.O.S. Products Ltd

6

531470

Emporis Projects Ltd

7

531337

Iris Mediaworks Ltd

8

531269

KLG Systel Ltd

9

530039

Lords Chemicals Ltd

10

514446

LS Industries Ltd

11

501209

Maestros Mediline Systems Ltd

12

530497

Marvel Capital & Finance India Ltd

13

530375

Nakshatra Infrastructure Ltd

14

501482

Parekh Distributors Ltd

15

504288

Polar Industries Ltd

16

532435

Sanmit Infra Ltd

17

511503

Secure Earth Technologies Ltd

18

523359

Sharp Industries Ltd

19

532029

Sindhu Trade Links Ltd

20

522042

SM Energy Teknik & Electronics Ltd

21

532249

Sql Star International Ltd

22

513530

Stelco Strips Ltd

23

531013

Sun Granite Exports Ltd

24

533639

Taksheel Solutions Ltd

25

522091

United Van Der Horst Ltd

26

521046

Vanasthali Textile Industries Ltd

27

530487

Vibros Organics Ltd

28

512345

Yash Trading & Finance Ltd

 

As per the rules and bye-laws of the exchanges and the provision of Securities Contracts (Regulation) Rules, 1957, a company listed on an exchange is required to comply with various clauses of the Listing Agreement, failing which trading in securities of such defaulting companies is liable for suspension.

 

These 28 companies have not fulfilled the BSE requirements for continuous listing till the quarter ended June 2013, BSE said in a statement.

 

As per the stock exchange, if the companies comply with listing norms on or before 19 December 2013, trading in their securities would be suspended for five trading days up to 3 January 2014. However, if they fail to do so, the suspension would continue till such time the company complies with the procedure laid for revoking suspension.

 

“Suspension of trading in securities of a company will be revoked only if the company has complied with all the provisions of the Listing Agreement up to the latest quarter for which the compliances are required,” BSE said.

User

COMMENTS

Dayananda Kamath k

3 years ago

these rules again show that regulators are the sponsorors of fraud on investors. why a share is to be delisted for the errors of the company management. prosecute the wrong doers and not the investor. that is why they come again and again to dupe the hapless investor.

Nilesh KAMERKAR

3 years ago

What kind of investor protection is this?

Why should outside and passive investors be penalised for the misdeeds of controlling shareholders.

Vaibhav Dhoka

3 years ago

Suspension of trading leads to ultimate loss to small investors.Instead tho directors should be criminally prosecuted.And recovery of dues must be made through civil procedure.

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)