Stocks
Sensex, Nifty overbought: Monday closing report

While the market is on a firm uptrend, there is a chance of a sharp decline at least on an intraday basis. A fall below 5,530 will signal the first weakness

Today the benchmark back home opened in the positive for the third consecutive trading session. While the Sensex had a 11-day high opening, the Nifty opened at five day high. The indices traded in the positive throughout the session. The Sensex closed in the positive for the fourth consecutive session while Nifty closed higher for the third consecutive session. The Sensex closed at 18,886 (up 266 points or 1.43%) while the Nifty closed at 5,551 (79 points or 1.44%). This is the highest closing since 14 August 2013. The National Stock Exchange (NSE) recorded the rise on a lower volume of 57.25crore shares.

 

The positive move has also got the support after the data showed that China's manufacturing gauge rose to a 16-month high in August.

 

However back home, India's economy grew at the slowest quarterly rate since the global financial crisis in the three months through June, lower than expected and hurt by a contraction in mining and manufacturing, government data showed on Friday, 30 August 2013. The GDP grew 4.4% in Q1 and was the slowest growth since the Jan-March quarter of 2009. Manufacturing fell an annual 1.2% during the quarter while mining fell by 2.8%, the data showed. The farm output rose 2.7%.

 

Petrol price was hiked by Rs2.35 per litre, and diesel by 50 paise per litre effective Sunday, 1 September 2013.

 

Indian factory activity shrank for the first time in more than four years last month, adding to the country's deepening economic malaise even as the Reserve Bank of India (RBI) struggles to defend the battered rupee currency, a survey showed. The HSBC Manufacturing PMI, compiled by Markit, sank to 48.5 in August from 50.1 in July, the lowest reading since March 2009. The count of 50 separates expansion and contraction.

 

The RBI clarified on media reports that there was no such proposal under its consideration at this juncture of various options of converting idle gold, including that available with temple trusts, into bullion.

 

Merchandise export in August is expected to be in double-digits once again and this upward trend is expected to continue in the months to come, according to commerce secretary SR Rao.

 

Except for Jakarta Composite (down 2.24%), KLSE Composite (down 0.58%) and Seoul Composite (down 0.08%) all other Asian indices closed in the positive. Hang Seng was the top gainer, up 2.04%.

 

China's economy is strengthening after a two-quarter slowdown, with a manufacturing gauge rising to a 16-month high in August as new orders jumped and overseas demand rebounded. The Purchasing Managers' Index was at 51.0, the National Bureau of Statistics and China Federation of Logistics and Purchasing said in Beijing. A separate manufacturing PMI released by HSBC Holdings Plc and Markit Economics rose to 50.1 last month from 47.7 in July, the biggest gain in three years and the first reading above 50 since April.

 

US indices closed in the red on Friday. President Barack Obama has decided to seek congressional authority to attack Syria for alleged chemical weapons prompting criticism that he's undermined US credibility.

 

European indices were trading in the green while the US Futures were also trading higher.

 

Strong orders for manufactured goods helped euro zone factory activity rise at the fastest pace in over two years in August and led to backlogs of work for the first time since mid-2011, a survey showed on Monday. Markit's Manufacturing Purchasing Managers' Index (PMI) jumped to 51.4 from 50.3 in July - the first month the index had been above the 50 line that signifies expansion since February 2012. The final reading pipped an earlier flash figure of 51.3.

User

Financial Technologies silent about NSEL scam in its AGM agenda

Financial Technolgies' notice for AGM does not even mention NSEL. Meanwhile, Ravi K Sheth, a longtime director and confidant of Jignesh Shah, has decided not to seek re-appointment

Financial Technologies (India) Ltd (FT), the promoter of scam-ridden National Spot Exchange Ltd (NSEL) does not even mention the name of the Exchange in the agenda for its upcoming annual general meeting (AGM). This is surprising especially as its main promoter, it is the responsibility of FT to answer questions arisen about the crisis at NSEL, especially since NSEL contributed more than Rs120 crore in profits to FT last year.

 

The Jignesh Shah-led financial software company and promoter of several exchanges in India and abroad such as MCX, MCX-SX, DGCX in Dubai etc. is holding its 25th AGM on 25 September at Chennai. The company has sent shareholders three notices dated 22nd August, 27th August and 30th August in a file on a single day.

 

Interestingly, Ravi K Sheth, director of FT for almost 20 years – going back to 1994 -- has become the latest to resign from the company. Sheth is not seeking re-appointment and FT has decided not to fill the vacancy created by his resignation.

 

On the other hand, N Balasubramanian, who was appointed as additional director on 22 August 2013 is seeking appointment as director. Balasubramanian, the former chairman and managing director of Small Industries Development Bank of India (SIDBI) was also associated with the Planning Commission in preparing five-years plan documents, focussed on SME, as the chairman of the sub-committee.

 

Even since the NSEL crisis started, directors have been running away from various companies of the group like rats deserting a sinking ship.
 

Sr No

FinTech

NSEL

MCX

1

Ramanathan Devarajan

Shankarlal Guru

Venkat Chary

2

Padmanabh R Barpande

Ramanathan Devarajan

CM Maniar

3

CM Maniar

BD Pawar

Lambertus Rutten

4

N Balasubramanian

Shreekant Javalgekar

Padmanabh R Barpande

5

Ravi K Sheth

 

Prakash Apte

6

 

 

Shvetal S Vakil

Directors left in the company

1

Jignesh Shah

Jignesh Shah

Jignesh Shah

2

Dewang Neralla

Joseph Massey

Joseph Massey

3

Manjay Shah

 

Paras Ajmera

4

Chandrakant Kamdar

 

RM Premkumar

5

 

 

P Satish

6

 

 

Ravi Kamal Bhargava

7

 

 

Dinesh Kumar Mehrotra


At present, FT board comprises its chairman and group CEO Jignesh Shah, whole time directors Dewang Neralla and Manjay Shah (Jignesh’s Shah brother) and Chandrakant Kamdar.

 

Since the middle of July 2013, trading in NSEL has been suspended. NSEL has failed to make payouts to investors and failed to recover money from those who were supposed to make pay-ins. It now appears that there is not enough stock of commodities in the warehouses of NSEL against which warehouse receipts were issues. In August 2013, trading in e-series was also suspended. This was of concern for large number of investors who had purchased e-series products like e-gold.

 

Following the crisis, FT’s shares have crashed from a high of Rs870 in May to Rs114 today. The shares of MCX have fallen from a high of Rs1,015 in May to a low of Rs238 in August. It has shot up to around Rs400 now, hitting the upper circuit daily for the past two weeks. There are rumours that MCX will change hands.

User

COMMENTS

Vickram Jaitha

3 years ago

The concept of e-gold was introduced for easy trade and safety. Neither can the NSEL investors trade e-gold nor are they feeling safe. What is the Government doing to protect thousands of investors who have invested in e-gold and e-silver?

The laws and rules that govern NSEL should derive from a simple and straightforward concept : all investors, whether large institutions or private individuals (big and small) should have had access to certain basic facts about NSEL prior to investment and so long as they hold the investments. To achieve this, Government should have insisted on NSEL to disclose meaningful financial and other information to the public. This would have provided a common pool of knowledge for all investors to use to judge for themselves whether to buy, sell, or hold a particular commodity like e-gold or e-silver. Only through the steady flow of timely, comprehensive, and accurate information can people make sound investment decisions. Unfortunately, this did not happen in the case of NSEL.

The result of this information flow is so important to our nation's economy. To insure that this objective is met, the Government should continually work with the market participants, including especially the investors, to listen to their concerns and to learn from their experience.

The Government must oversee the key participants in NSEL, including brokers and dealers, borrowers, investment advisors, and mutual funds for maintaining fair dealings, and protecting against fraud. Crucial to the effectiveness in each of these areas is its enforcement authority.

The world of investing is fascinating and complex, and it can be very fruitful. It is not a spectator sport.

Vaibhav Dhoka

3 years ago

We can label this as Technology Slip/Scam.In days to come we have to face many such SCAMS.

nagesh kini

3 years ago

Apparently FTL is selective in mailing the Annual Report to its stakeholders - I've not received any Notice for the AGM nor the Accounts.
What about good Corporate Governance practices? If the Directors fail to disclose why have the Statutory Auditors not said it by qualifying their Corporate Governance Report?

REPLY

Hemant

In Reply to nagesh kini 3 years ago

Well i with my family holds FTL shares in 4 different folios & have received AR by email in all a/c's.Even on BSE web site it is there.

nagesh kini

In Reply to Hemant 3 years ago

Neither have I received any by email. that doesn't answer my corporate governance concerns?

R Balakrishnan

In Reply to nagesh kini 3 years ago

The R&T, Karvy is the one who sends this mail.

Nilesh KAMERKAR

In Reply to Hemant 3 years ago

There are hundreds of listed companies who have NOT uploaded their annual reports on their own websites or with the stock exchanges.

Neither have they sent annual reports through email.

V K JAIN

3 years ago

It would be interesting to see the effectiveness of new Companies Act to ensure that Directors and Independent Directors act as per the new statue or else face the music. Resignation does not absolve directors-whether dependent or independent- of their acts of omission or commission.

Virendra Jain

SAT quashes SEBI order against NSDL in IPO scam

The irregularities during 2002 to 2006 by NSDL related to cases of IPO scam and trading in unlisted shares of DSQ Software upon irregular dematerialistion

The Securities Appellate Tribunal (SAT) has quashed an order passed by Securities and Exchange Board of India (SEBI) in December 2008, but implemented only in July 2011 after being dismissed initially as 'null and void' against National Securities Depository Ltd (NSDL).

 

SAT had passed a similar order last month after hearing another appeal filed by the  NSDL against another order from SEBI in the same case.

 

In its latest order, dated 30 August 2013, the Tribunal observed that the facts in the earlier appeal filed by NSDL were similar to facts in the present case, and therefore it directed that the SEBI order in the present appeal be also "quashed and set aside".

 

The two SEBI orders, passed on 4 December 2008, asked NSDL to conduct an independent inquiry to fix individual responsibility for failure at the Depository in the wake of initial public offering (IPO) and demat scams between 2002-2006. NSDL board was also directed to conduct an independent audit of its systems and operations to identify the remedial measures.

 

After hearing NSDL's appeal against these orders, SAT last month ruled that independent probes have already been carried out by depositories and remedial measures have been taken after ascertaining that there was no individual complicity.

 

"Therefore, at this belated stage directing the appellant (NSDL) to institute fresh inquiry to fix individual accountability...Is wholly unjustified and unreasonable. Accordingly, we quash and set aside the impugned order dated December 4, 2008.

 

"This order, however, will not come in the way of the respondent to seek compliance of any other remedial measures that may be suggested by the respondent with a view to strengthen the Depository system," SAT had said in its order.

 

The orders were originally passed by a SEBI committee in December 2008, but were later dismissed as "null and void" by the board of the market regulator.

 

However, an intervention by the Supreme Court in July 2011 forced the market regulator to revive the matter and SEBI's board on 28th July that year took an unprecedented decision of reviving the charges declared as "non-existent" in the past.

 

Subsequently, SEBI implemented the orders and served them to NSDL on 29th July  for compliance, which included an independent audit of systems and operations within six months.

 

This was the first instance of SEBI revisiting an issue previously dismissed by it, as also an unprecedented case of the regulator being open to a report, where its own role had been criticised.

 

The irregularities during 2002-06 by NSDL related to cases of IPO scam and trading in unlisted shares of a company DSQ Software upon irregular dematerialistion.

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