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Markets: Weekly round up

	June 22, 2009

Beginning last Monday, the Sensex finished lower at 14,875 down 362 points while the Nifty lost 99 points to close at 4484 due to profit taking in heavy weights.



The Bombay High Court has directed Reliance Industries to supply 28 mmscmd (million metric standard cubic metres per day) of gas from its Krishna-Godavari basin to Reliance Natural Resources Ltd for $2.34 per mmbtu (million metric British thermal unit).



The pricing was the bone of contention between Reliance and RNRL as RIL went by the figure of $4.2 per mmbtu, as decided by the Empowered Group of Ministers (EGoM). The verdict on Monday is being seen by observers as a shot-in-the-arm for RNRL which is part of the Anil Ambani group.



The Securities and Exchange Board of India (SEBI) has asked mutual funds to bring down their net investments in money market instruments in a single entity to 30 per cent by September 5, the market regulator said in a circular on Monday.



The Sensex on Tuesday ended up 82 points at 14,958, and the Nifty closed higher at 4,518 edged up 34 points in a choppy trade.



The markets witnessed significant selling pressure in the late session on Wednesday. It seems that the sluggish Asian markets and worries on global economic recovery, and profit-booking dragged the Sensex sharply lower at 14,523, down 435 points.



The Nifty eased 161 points to settle at 4356. Broad market indices lost even more as the BSE Midcap and BSE Small Cap index slid 3.92% and 3.74% respectively.



Heavy selling in realty, commodity and infrastructure stocks coupled with weak overseas markets led to plummeting of the Indian bourses for the second straight session on Thursday.



The Sensex closed at 14,265, slips 257 points and the wide-based Nifty ended at 4,251 eased 104 points. FIIs were net sellers both in cash & derivative segements.

The Sensex closed the week on Friday with a handsome gain of 256 points at 14,521 and the Nifty too rose 62 points to settle at 4,313 on hopes of disinvestment in BHEL to the extent of 10 per cent.



Sebi ushers in the concept of “Anchor investor”



The market regulator, SEBI, has introduced the concept of ‘anchor investor’ purportedly to ensure greater certainty and better price discovery in the issue process.



"This provision has been made in response to requests from issuers that if some investor is ready to come in with prior commitment, it will enhance their ability to sell the issue and generate more confidence in the minds of retail investors," CB Bhave, chairman of the Securities and Exchange Board of India (Sebi) said.



The anchor investor would be a qualified institutional buyer (QIB) and an issuer can allot up to 30% of its institutional quota to such investors.The investor cannot be related to the promoter or promoter group or the lead managers. The minimum size of the application by such investors would be Rs 10 crore, of which they would have to pay 25% upfront and the remaining 75% within two days of the closure of the issue.There would also be a 30-day lock-in period.



Companies looking to make public issues of equity but afraid to hit the market in view of the choppiness can now have the security of an 'anchor investor'.

A number of exchanges are also looking to come out with IPOs. The changes may be particularly beneficial for them.



Sebi also clarified on the holding period for shares.



Currently, a shareholder can make an offer for sale of equity shares obtained from the conversion of securities if he has held them for at least one year. In the case of convertible securities, such as depository slips or warrants, the one year period would be from the date of issue of the warrant and not from the conversion into shares, Sebi said.



The regulator has also made it necessary for all unlisted companies to list the securities on at least one stock exchange having nationwide trading terminals, in a bid to provide a liquid trading platform to investors. No listed company can now come out with shares that have superior voting rights to regular shares, it said. It also rationalised disclosure norms for rights issues to make the process cheaper and faster. Since rights are issued to shareholders who have already been receiving information about the company on a regular basis, the issuer need not give a summary of the industry and its business or information on its past performance or management, Sebi said.



The Securities and Exchange Board of India (Sebi) further announced that there would not be any entry load for the new as well as the existing mutual fund (MF) schemes and the investor could decide on the commission that he wishes to pay.

The MF distributor will also have to disclose the commissions that he is getting on the schemes. The Sebi board which met on Thursday announced a slew of path breaking pro-investor measures.



Fees charged by brokers for sale and purchase transactions in securities and the derivative segment, filing fee for offer document by mutual funds, FIIs registration fee etc have all been slashed by 50 per cent.