MCX-SX cuts promoter’s stake to 10%; may enter equity trading soon

With the completion of the MIMPS compliance, MCX-SX may soon enter the equity trading space dominated by two warring bourses, the NSE and BSE.

MCX Stock Exchange Ltd (MCX-SX) said it has completed the shareholding compliance under the SEBI (Manner of Increasing and Maintaining Public Shareholding in Recognised Exchanges) Regulations, 2006 (MIMPS Regulations) in order to commence other segments of capital market, subject to regulatory approvals. This will allow the newest stock exchange to enter equity trading, subjected to regulatory approval.

MCX-SX, promoted by Commodity Exchange (MCX) and Financial Technologies (India) Ltd was given a time till September 2010 to reduce promoter's shareholding to 10%. According to the new shareholding pattern, IFCI Ltd has emerged as biggest shareholder in MCX-SX with a13.23% stake, followed by Union Bank of India (11.5%) and Punjab National Bank (9.2%).

MCX-SX has also expanded its board member to 18 from 12 and had inducted six nominees from banks and financial institutions. This includes Atul Rai, chairman and managing director, IFCI Ltd, Shahzaad Dalal, vice chairman, IL&FS, M Narendra, executive director, Bank of India, SK Dubey, general manager for treasury, Punjab National Bank, S Rajendran, general manager, Union Bank of India and CVR Rajendran, general manager, Corporation Bank.

Market regulator Securities and Exchange Board of India (SEBI) had kept on hold an application of MCX-SX to commence equity trading for more than one and a half year due to the MIMPS compliance.

With the completion of the MIMPS compliance, MCX-SX may soon enter the equity trading space dominated by two warring bourses, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

According to regulations, no single entity, except other stock exchanges, depositories, banks, insurance companies and public financial institutions, can hold more than 5% in a stock exchange.
 

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HDFC announces new dual-rate scheme, despite RBI diktat on teaser rates

In yet another case of a regulator’s stance being thrown to the winds, HDFC has decided to ignore the Reserve Bank of India’s observations
on teaser loans


Moneylife
had earlier reported (see here) on how the RBI has repeatedly expressed its displeasure over teaser rates, saying that these schemes are unfair to existing borrowers.

But HDFC has gone ahead and launched a new dual-rate scheme, despite the clear stance of the central bank.

The financial institution today lowered its home loan rate to 8.25% for the first year in its dual-rate scheme, commonly known as a teaser loan, applicable on fresh loans.

Under the scheme, the country’s biggest mortgage provider would offer a fixed rate of 8.25% up to March 2011, then 9% for the next one year and the prevailing floating rate for the remainder of the loan tenure.

“This is a flexible product with dual rates. The fixed rates are applicable for all new loans irrespective of the loan amount,” stated HDFC.

The teaser rates have been a major issue in the home-loan market in the recent past, with public sector lender SBI walking away with a big pie of the market through its own teaser rates. A number of lenders, including HDFC, had followed SBI last year in offering teaser rates, but most of these offers were discontinued earlier this year in a rising interest rate scenario.

Although SBI has continued with its teaser rates, it had raised the effective interest rate on its scheme at the beginning of this month.

SBI has extended its 8% special home loan scheme till 30th April, but revised the rate for the second and third years to 9% from 8.5% earlier.

HDFC today said that besides the new dual-rate scheme, its existing floating rate product would continue without any change, where rates are 8.75% for loans up to Rs30 lakh, 9% for loans between Rs30 lakh and Rs50 lakh and 9.25% for loans of Rs50 lakh and above.

Announcing the new scheme, HDFC managing director Renu Sud Karnad said that the company received “overwhelming” response to its earlier dual-rate offer and its cost of funds has now allowed launching a “lower initial fixed rate.”

“This special offer is applicable to all new home-loan customers who apply before 30 April  2010, and take at least part-disbursement before 30 June 2010,” she added.

Without naming SBI, HDFC said that the effective rate on its new scheme was “very attractive” and “much better than other large players in the market offering similar products” for a loan tenure of 15 or 20 years.

SBI is the only other major player currently offering teaser home loan rates.

“We would also allow the option to all customers whose loans are fully undisbursed as of 14th April to convert to this product without any conversion fees,” Ms Karnad said, adding that the special rates would also be available to NRIs, persons of Indian origin and self-employed customers.

HDFC recorded a growth of 22% in loan approvals during the nine-month period ending 31 December 2009, to Rs44,110 crore, from Rs33,820 crore in the corresponding period last year.

Loan disbursements during the nine-month period ending 31 December 2009, amounted to Rs33,527 crore compared to Rs27,211 crore in the corresponding period last year, representing a similar growth of 23%.

The company said that its non-performing loans have also been declining on year-on-year basis for 20 straight quarters.

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COMMENTS

R Balakrishnan

9 years ago

RBI has to issue a circular. Even then, it would not be applicable to housing finance companies, which come under the jurisdiction of NHB. RBI is not the licensing authority for HFC's.

CMIE pegs FY10 growth at 7.1%; projects 9.2% increase in FY11

For FY11, the think-tank has said that it expects all three broad sectors of the economy—agriculture, manufacturing and services—to improve their performance

Driven by an estimated 8.4% growth in the fourth quarter, the economy was expected to have grown by 7.1% in the just-concluded fiscal and by a robust 9.2% in the current financial year, economic think-tank Centre for Monitoring Indian Economy (CMIE) has said, reports PTI.

“We estimate the real gross domestic product (GDP) would have risen by 7.1% in fiscal 2009-10 and (will grow) by 9.2% in 2010-11,” CMIE has said in its report.

While GDP growth for the just-concluded fiscal is a tad lower than the 7.2% expansion that finance minister Pranab Mukherjee as well as the Central Statistical Organisation have been projecting, the current year’s projection is much above the minster's 8.75% forecast.

In the fourth quarter, the economy is estimated to have grown by an “impressive” 8.4%, the CMIE report said, adding that during the first three quarters of the past fiscal, real GDP grew by 6.7% compared to 7.1% in the same period of 2008-09.

“The growth in 2009-10 would be driven by the rise in GDP from the industrial sector including construction,” CMIE said. “We estimate that the industry sector would have grown by 9.4% in 2009-10, with the manufacturing segment clocking a robust 10.3% growth.”

Real GDP from mining and quarrying is estimated to have grown by 10.3% in 2009-10, on top of a 9.7% growth in 2008-09.

“Coal, natural gas and iron ore are the few items whose production has recorded impressive growth,” the report said. Growth in the services sector is estimated to have come down to 8.2% in FY10 from 9.8% in FY09, it said.
“This slowdown is largely on account of a steep deceleration in growth in the public administration and defence segment to 8% from 22.1% in 2008-09,” CMIE said.

Real GDP from the agricultural sector is also estimated to have declined by 1% in FY10 because of a decline in kharif crop production, it said.

This would be the first fall after 2002-03, when the sector had witnessed a 7.2% decline, the report said.

For FY11, the CMIE report said that it expected all three broad sectors of the economy—agriculture, manufacturing and services—to improve their performance.

The industrial sector, including construction, is projected to grow by 9.6% in FY 11, better than the 9.4% in FY10, the report said.

Growth in the construction sector will be led by the food products segment, particularly sugar and edible oil, the CMIE report said.

“Acceleration in consumption and investment growth in 2010-11 will contribute to a higher growth in consumer durables and capital goods output,” it said.

Around Rs6.5 lakh crore worth of projects are scheduled to be commissioned during FY 11 as against an estimated Rs4 lakh crore in FY 10, it said.
 

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COMMENTS

Gaurav

8 years ago

What's the projected growth rate of services segment in 2010-11?

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