The National Spot Exchange (NSEL), the spot trading arm of India’s largest commodity exchange, has appointed National Securities Depository (NSDL) and Central Depository Services (India) (CDSL) as its clearing house for settlement of trades pertaining to warehouse receipts (WR) for commodities.
The development is significant as the association of NSDL and CDSL will allow movement of WR through depositories without actual movement of goods from sellers to buyers with the exchange being the counterparty. This will allow participants even to trade WR electronically fearlessly.
“Till now, the exchange was handling daily settlement of agri and non-agri commodities through manual transfer of WR by courier or postal routes. This was not only risky but also fearful of loss of certificate in the transit. But, the electronic transfer of WR would create confidence into the system,” said Anjani Sinha, MD and CEO of NSEL. The electronic exchange of WR will attract more participants on online spot trade. It will also ease traders’ physical problems of handing warehouse receipts from broker to sub-broker and the clients thereafter, he added.
NSEL has intimated to NSDL that it would be empenalling participants for providing depository services for warehouse receipts to the clients/clearing members of the spot exchange, the depository informed its participants through a circular.
Although, a separate demat account is required for NSEL transaction, the circular clarified that independent account is not required if the participant is a member of MCX for futures trading. The existing account opened for holding electronic warehouse receipts of MCX can be used for NSEL as well.
If the participant is exclusively empanelled with NSEL, clients need to open a demat account and execute the enclosed agreement with the participant for holding electronic warehouse receipt of NSEL.
The exchange launched compulsory delivery castorseed trade on its platform for Palanpur, Gujarat, delivery. It is also working on launching wheat spot trade by the beginning of new wheat season towards the end of February.
Recently, NSEL also launched compulsory delivery based customized contract for Nafed Cotton. This necessarily means that cotton traded on NSEL would be made deliverable only when it matches the quality parameters set by Nafed. The delivery should not necessarily be from the Nafed warehouses.
Saturday, January 31, 2009
Satyamgate prompts FIIs, MFs to offload stocks
Foreign and domestic fund houses turned net sellers immediately after the Satyam accounting fraud came to light on January 7.
Foreign Institutional Investors (FIIs) and domestic mutual funds (MFs) got into ‘sell’ mode starting January 7, when Satyam founder-chairman B Ramalinga Raju admitted to committing the fraud over several years. FIIs sold shares worth Rs 5,484 crore (over $1 billion), while MFs reported a record net outflow of Rs 2,232 crore between January 7 and January 28. However, domestic institutions other than mutual funds, mainly insurance companies, saved the day with a net investment of Rs 5,550 crore since then.
The last time such a big selling of equities by domestic mutual funds was recorded was in March 2008, when they sold stocks worth Rs 1,971 crore.
“Since the market outlook is biased towards a downward trend, mutual funds have been selling at higher levels and remaining in cash to grab opportunities when the market falls further…,” said Amar Ambani, research head, Indiainfoline.
Fund managers say that redemption requests coupled with the fear factor that there could be yet another major fall in share prices before the parliamentary election have driven them to sell stocks. “There is a general feeling among players that markets could be in the range of 7,500-10,000 and any further rise is possible only after the election. Therefore, the current rally, which had started in December and faced obstacles due to the Satyam episode, may fizzle out by February end as the election draws closer,” said the Chief Executive Officer (CEO) of a fund house.
The Sensex had risen 16 per cent from 8,839 on December 1, 2008 to 10,335 on January 6, 2009 before the Satyam scam came to light. The Securities and Exchange Board of India (Sebi) data also show that till January 28, out of 14 trading days, FIIs were net sellers on 12 occasions and mutual funds on 10. During this period, FIIs sold equities worth Rs 5,584 crore. On the other hand, mutual funds sold equities worth Rs 3,082 crore and bought stocks worth Rs 850 crore during the remaining four trading days.
So far in the current month up to January 28, domestic mutual funds have been net sellers to the tune of Rs 1,978 crore, nearly 51 per cent of this was done on January 7 after Raju admitted to the fraud.
Foreign Institutional Investors (FIIs) and domestic mutual funds (MFs) got into ‘sell’ mode starting January 7, when Satyam founder-chairman B Ramalinga Raju admitted to committing the fraud over several years. FIIs sold shares worth Rs 5,484 crore (over $1 billion), while MFs reported a record net outflow of Rs 2,232 crore between January 7 and January 28. However, domestic institutions other than mutual funds, mainly insurance companies, saved the day with a net investment of Rs 5,550 crore since then.
The last time such a big selling of equities by domestic mutual funds was recorded was in March 2008, when they sold stocks worth Rs 1,971 crore.
“Since the market outlook is biased towards a downward trend, mutual funds have been selling at higher levels and remaining in cash to grab opportunities when the market falls further…,” said Amar Ambani, research head, Indiainfoline.
Fund managers say that redemption requests coupled with the fear factor that there could be yet another major fall in share prices before the parliamentary election have driven them to sell stocks. “There is a general feeling among players that markets could be in the range of 7,500-10,000 and any further rise is possible only after the election. Therefore, the current rally, which had started in December and faced obstacles due to the Satyam episode, may fizzle out by February end as the election draws closer,” said the Chief Executive Officer (CEO) of a fund house.
The Sensex had risen 16 per cent from 8,839 on December 1, 2008 to 10,335 on January 6, 2009 before the Satyam scam came to light. The Securities and Exchange Board of India (Sebi) data also show that till January 28, out of 14 trading days, FIIs were net sellers on 12 occasions and mutual funds on 10. During this period, FIIs sold equities worth Rs 5,584 crore. On the other hand, mutual funds sold equities worth Rs 3,082 crore and bought stocks worth Rs 850 crore during the remaining four trading days.
So far in the current month up to January 28, domestic mutual funds have been net sellers to the tune of Rs 1,978 crore, nearly 51 per cent of this was done on January 7 after Raju admitted to the fraud.
Satyamgate prompts FIIs, MFs to offload stocks
Foreign and domestic fund houses turned net sellers immediately after the Satyam accounting fraud came to light on January 7.
Foreign Institutional Investors (FIIs) and domestic mutual funds (MFs) got into ‘sell’ mode starting January 7, when Satyam founder-chairman B Ramalinga Raju admitted to committing the fraud over several years. FIIs sold shares worth Rs 5,484 crore (over $1 billion), while MFs reported a record net outflow of Rs 2,232 crore between January 7 and January 28. However, domestic institutions other than mutual funds, mainly insurance companies, saved the day with a net investment of Rs 5,550 crore since then.
The last time such a big selling of equities by domestic mutual funds was recorded was in March 2008, when they sold stocks worth Rs 1,971 crore.
“Since the market outlook is biased towards a downward trend, mutual funds have been selling at higher levels and remaining in cash to grab opportunities when the market falls further…,” said Amar Ambani, research head, Indiainfoline.
Fund managers say that redemption requests coupled with the fear factor that there could be yet another major fall in share prices before the parliamentary election have driven them to sell stocks. “There is a general feeling among players that markets could be in the range of 7,500-10,000 and any further rise is possible only after the election. Therefore, the current rally, which had started in December and faced obstacles due to the Satyam episode, may fizzle out by February end as the election draws closer,” said the Chief Executive Officer (CEO) of a fund house.
The Sensex had risen 16 per cent from 8,839 on December 1, 2008 to 10,335 on January 6, 2009 before the Satyam scam came to light. The Securities and Exchange Board of India (Sebi) data also show that till January 28, out of 14 trading days, FIIs were net sellers on 12 occasions and mutual funds on 10. During this period, FIIs sold equities worth Rs 5,584 crore. On the other hand, mutual funds sold equities worth Rs 3,082 crore and bought stocks worth Rs 850 crore during the remaining four trading days.
So far in the current month up to January 28, domestic mutual funds have been net sellers to the tune of Rs 1,978 crore, nearly 51 per cent of this was done on January 7 after Raju admitted to the fraud.
Foreign Institutional Investors (FIIs) and domestic mutual funds (MFs) got into ‘sell’ mode starting January 7, when Satyam founder-chairman B Ramalinga Raju admitted to committing the fraud over several years. FIIs sold shares worth Rs 5,484 crore (over $1 billion), while MFs reported a record net outflow of Rs 2,232 crore between January 7 and January 28. However, domestic institutions other than mutual funds, mainly insurance companies, saved the day with a net investment of Rs 5,550 crore since then.
The last time such a big selling of equities by domestic mutual funds was recorded was in March 2008, when they sold stocks worth Rs 1,971 crore.
“Since the market outlook is biased towards a downward trend, mutual funds have been selling at higher levels and remaining in cash to grab opportunities when the market falls further…,” said Amar Ambani, research head, Indiainfoline.
Fund managers say that redemption requests coupled with the fear factor that there could be yet another major fall in share prices before the parliamentary election have driven them to sell stocks. “There is a general feeling among players that markets could be in the range of 7,500-10,000 and any further rise is possible only after the election. Therefore, the current rally, which had started in December and faced obstacles due to the Satyam episode, may fizzle out by February end as the election draws closer,” said the Chief Executive Officer (CEO) of a fund house.
The Sensex had risen 16 per cent from 8,839 on December 1, 2008 to 10,335 on January 6, 2009 before the Satyam scam came to light. The Securities and Exchange Board of India (Sebi) data also show that till January 28, out of 14 trading days, FIIs were net sellers on 12 occasions and mutual funds on 10. During this period, FIIs sold equities worth Rs 5,584 crore. On the other hand, mutual funds sold equities worth Rs 3,082 crore and bought stocks worth Rs 850 crore during the remaining four trading days.
So far in the current month up to January 28, domestic mutual funds have been net sellers to the tune of Rs 1,978 crore, nearly 51 per cent of this was done on January 7 after Raju admitted to the fraud.
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