Moody`s approves 3-year lock-in of ICRA stake
Mumbai: Global rating agency Moody's Corporation which holds a little above 28 per cent stake in domestic rating agency ICRA through its indirect subsidiary Moody's India, has approved a three-year lock-in of 20 per cent stake in ICRA to facilitate the latter's initial public offer (IPO).

Moody's has also agreed not to sell its remaining 8 per cent stake for at least one year.

The decision comes after the Securities and Exchange Board of India (Sebi) pointed out a "technical violation" by ICRA in the latter's draft red herring prospectus filed before Sebi in which ICRA had said it was a "professionally managed company" not having "any promoters or promoter group".

This violated Sebi guidelines for credit rating agencies, according to which, any person or group holding more than 10 per cent in a credit rating agency is considered a "promoter".

Sebi has insisted on a lock-in by Moody's so that retail investors would be assured of a long-term commitment by a big group like Moody's in ICRA.

It is, however, not known whether Moody's India has agreed to term itself as the "promoter" of ICRA Ltd.
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Primacy may be given to hedge funds following disclosure norms
New Delhi: Looking to create a more transparent mechanism for hedge funds to invest in the local equities market SEBI has said in its new policy that primacy will be given to hedge funds willing to subject themselves to disclosure norms and with a record of having a long-term investment perspective.

Sebi officials said it will shortly submit a policy paper to finance ministry on the subject.

So far hedge funds have participated in the markets by investing in offshore derivative instruments such as participatory notes (PNs). The capital markets regulator estimates that hedge funds account for 5 pc of the market value of total investments by foreign portfolio investors in India.
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LSE, BSE may tie-up, plan cross-listing
London: The London Stock Exchange and Bombay Stock Exchange have held discussions about a possible partnership, which could lead to the two taking shareholdings in each other according to media reports.

The report said a potential deal between the LSE and the Mumbai exchange could also include cross-listings of company shares and technology-sharing.

Earlier this month, the Tokyo Stock Exchange was reportedly in talks with the LSE about an alliance.

An LSE spokesman said the Indian market was a very important market for the UK based exchange. Shares in LSE rose sharply last week on talk that a fresh takeover approach from Nasdaq Stock Markets was imminent.
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IPOs fail Crisil grading test
Mumbai: If the IPO grading system is to be relied on then there are serious quality issues concerning new IPOs, which have not opened for subscription yet. Rating agency Crisil has graded six IPOs to date and all of them have been tagged as either 'poor fundamentals' or 'below-average fundamentals'.

The Securities and Exchange Board of India (Sebi) made grading for IPOs optional and none of the promoters or lead managers asked the rating agencies to grade their issues. The market regulator then asked the exchanges to identify the issues on merit and refer them to rating agencies.

As part of a pilot project of the stock exchanges which also bore the cost of the project at Rs5 lakh an issue, the rating agencies were called by the exchanges and asked to grade some of the small- and mid-cap issues.

Six initial public offers were graded by Crisil out of which three received a grade of 1/5. Others got 2/5.

The six IPOs that have been graded so far are of: Celestial Labs, Bhagwati Banquets & Hotels, SVP Industries, Suryachakra Power Corporation, Shree Ashtavinayak Cine Vision and Minar International. The IPOs of Celestial Labs, Bhagwati Banquets and SVP Industries have received a 1/5 grade, which, according to Crisil, denotes 'poor fundamentals'.

The rest of the IPOs have not fared much better with a 2/5 grading or 'below average fundamentals'. Expectedly, executives of companies that have been graded are not amused. They complain that the benchmarks set by the rating agencies are stringent and should not be applicable for companies that are floating small issues.
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NCDEX to start 100 gm gold mini contract
Mumbai: NCDEX will soon launch 100 gram gold mini contract starting from November 21, 2006. The contract is being viewed as a tool for small investors to share the benefit of the growing bullion trade.

"At the current gold price levels the minimum that an investor would be required to invest is around Rs4,500-Rs5,000 to trade in the contract. Retail investors will benefit from the leverage that futures trading provide. This will allow small investors to be a part of the trade, which so far had a psychological entry barrier as regards to the investment required," said Narendra Gupta of NCDEX.

Three consequent month contracts will run concurrently which is expected to increase volumes traded in gold by many times. Volumes in the gold kg contract during October stood at Rs9,486.6 crore (Rs2,515 crore during October 2005) with number of contracts at 1,06,103 (36,791 during October 2005). Overall on NCDEX trading volume in the contract has increased eight fold during the period April-October 2006 (Rs79,370.7 crore) from April-October 2005 (Rs8,823.3 crore). The increase in number of traded contracts during the period is just under six times from 1,20,631 to 8,39,800 contract. The increase in volumes has been from 1,35,424 kg to 8,43,799 kg, an increase of 5.2 times.
Gold that is also seen as a hedge against inflation is considered to be an important part of a diversified asset portfolio. Indian demand for gold is around 800 MT per year of which 600 MT is imported.
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Gold soars
New Delhi: Gold prices zoomed on the bullion market on Saturday on buying due to a firming international trend amid restricted arrivals and closed with a hefty gain of Rs105 at Rs9,215 per 10 gram. While arrivals were negligible due to a Delhi bandh called by the traders' associations yesterday, a demand for the precious metals picked up as stockists ran to catch it before any further rise, traders said.

Gold in Asia rose to a two-month high by $2.84 to $636.25 an ounce on speculation that China, the 10th biggest holder of gold reserves, will boost purchases of the precious metals to diversify its foreign exchange reserves.

Both the dollar denominated precious metals, silver and gold, also gained notable ground as the dollar tumbled for a second day against the euro after reports that the People's Bank of China may switch some of its currency reserves.

Standard gold and ornaments surged by Rs105 each at Rs9,215 and Rs9,065 per 10 gram respectively. Sovereign also rose by Rs50 at Rs7,650 per piece of eight gram.

Silver ready shot up by Rs470 at Rs19,150 per kilo and weekly-based delivery by Rs370 at Rs19,100 per kilo. Silver coins traded higher by Rs200 at Rs2,200 for buying and Rs22,800 for selling of 100 pieces.
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Base metals fall on global trends
New Delhi: Base metals continued to fall in the wholesale non-ferrous metal market on Saturday on persistent selling by stockists, triggered by overnight weakness at London Metal Exchange.

Marketmen said overnight weakness at London Metal Exchange (LME) and sluggish demand from consuming industries led to a fall in select base metal prices here. Tin ingot and solder (40 per cent) met with stockists selling and lost Rs5 each at Rs535 and Rs155 a kilo respectively.

Nickel plate 4x4, 9x9 and 4x24 were lost Rs 10 each at Rs1905-2005, Rs1915 and Rs1915-1935 per kilo respectively. Zinc slab quoted also softened by Rs5 at Rs225 per kilo
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Garware Offshore to consider interim, expansion
Mumbai: Garware Offshore Services has informed the BSE that a meeting of the board of directors of the company will be held on November 22, for payment of interim dividend for the year 2006 and to review the expansion plans.
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