Markets now scaling down
Mumbai: Bull operators had to retreat after a two-day rampage on the bourses as market regulator Securities and Exchange Board of India stepped in to curb excess and extraordinary volatility. The weakening of global markets, especially the Nasdaq, also contributed to the sudden reversal. The Sensex of the Bombay Stock Exchange shed 134 points in a day to close at 5357 after remaining at peak levels for two days. The trend was evident on the National Stock Exchange too, where the S&P CNX Nifty lost 39.5 points to end the day at 1599.

The new market leader, Infosys Technologies, lost the maximum eight per cent in its price, to reach Rs 15,557. Other infotech stocks, notably NIIT and Pentafour Software, also crashed to the lower end of the price band. Market watchers said foreign funds were reported to be selling these stocks. Another index pivotal, Hindustan Lever, also remained weak. Stocks that withstood the crash were Reliance and MTNL as well as infotech stocks like Wipro, Aptech, Digital Equipment, Global Telesystems and Satyam Computers, which, in spite of the pressure, scaled to new 52-week highs.

As for trading volume, the combined turnover of the BSE and NSE crossed the Rs 12,000-crore mark to reach Rs 12,342 crore. This is a record.
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Sebi to reconsider new volatility rules
Mumbai: The Securities and Exchange Board of India is likely to review its decision to impose higher margins to curb volatility in the markets. Leading stock exchanges have represented to the regulator that frequent changes in regulations may lead to confusion and may also be difficult to implement in view of the corresponding changes required in computer software. The stock exchange officials are also not sure whether these regulations will have the desired effect as the margins are normally calculated on the basis of six-week average figures.

Sebi had asked the stock exchanges to impose additional margins of 20 per cent to 50 per cent to curb excessive volatility. Sebi confirmed that it has received representations from the bourses and that it is considering them.
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Reliance for New York SE listing
Mumbai: Reliance Industries is understood to be planning to list its proposed American depository receipts on the New York Stock Exchange. The company is awaiting formal approval from the stock exchange in January, and the listing may happen immediately. The company is reportedly planning to give its global depository receipt holders an option to convert their instrument into ADRs.
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Melstar plans IPO
Mumbai: Melstar Information Technologies is coming out with an initial public offering on 17 January. The company will offer 22.61 lakh shares of Rs 10 a share at a premium of Rs 62 per share. In addition, some existing shareholders of the company – Usha Martin Ventures, Brij Investments and Multibis Financial Services -- are also offering a total of 8.89 lakh equity shares on the same terms, aggregating Rs 6.4 crore. The shareholders are divesting a part of their holding to meet the Securities and Exchange Board of India’s norm of a minimum 25 per cent equity offer.

Melstar will use the funds to set up subsidiaries abroad and to open two software development centres in Mumbai.
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Geojit ready for Net trading
Mumbai: Geojit Securities, a Kochi-based NSE member, will be the first to start Internet-based stock trading using NSE’s proprietary software. It will kick off Internet-based trading on 17 January. The company, which targets non-resident Indians, says it has received an encouraging response from NRIs in the Gulf region.
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Governance code finalised
Mumbai: The Securities and Exchange Board of India’s committee on corporate governance has finalised a schedule for compliance with the corporate governance code set by the committee. The committee, headed by industrialist Kumar Mangalam Birla, submitted its final report to the regulator on 5 January. It has recommended that all companies going in for new listing should comply with the code and that.all the companies in Group A of the Bombay Stock Exchange and the National Stock Exchange’s S&P CNX Nifty should comply with the code by 31 March 2001. The committee feels the code should also be part of the listing agreement of the stock exchanges.

The code has two parts – a voluntary section and a mandatory section.
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