Readings: Brokerage earnings, Stock lending (Short selling), Commodities trading
- Business Standard: Broking houses delay Q4 results
At least four top brokerages — Religare Enterprise, Edelweiss Capital, Emkay Shares and Stocks and Modern Securities — have delayed their fourth quarter results.
“Brokerage houses are facing tough times as the trading volumes on the bourses have declined by 50 per cent and the clients have suffered huge losses in the market crash. Hence, they (brokerages) are just bargaining for time to try and recover their bad debts and clean up the mess arising from client funding,”
In India, short-selling of shares was disallowed in 2001 after the Ketan Parekh scam came into light. Come April 21, and short-selling will be allowed again. The securities lending and borrowing session will happen between 10 am and 11 am on days when the stock market is open.
. . . no naked short-sales will be allowed. What this means is that anyone (institution or retail investor) looking to sell a share he does not own will have to borrow it first. Investors can borrow shares from the stock lending and borrowing scheme, short it and then buy it back at a lower price, to make a profit.
Those borrowing the stock will have to maintain a margin of 140% of the amount of stock borrowed with his broker. The broker will have to be maintain a similar margin with the exchange.
- Economic Times: CTT fear brings down turnover of commexes
The turnover of commodity bourses has dropped sharply on transaction tax proposal and reports that the government may ban futures trading of more commodities. Analysts fear the turnover may get eroded by another 20-30% once commodities transaction tax (CTT) comes into effect.
The daily volume of trade on MCX, which was at Rs 16,726.03 crore on February 28, a day before Budget 2008 was presented, has come down to Rs 12,448.52 crore as on April 11.
Between that & the ban on futures trading for an increasing number of commodities, MCX & NCDEX are hosed!
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