Heard on the Street

Jury still out on extended trading hours
The Association of National Exchange Members of India (ANMI) is meeting senior NSE officials on Friday. The word on the Street is that the discussion is likely to centre around the proposed extension of trade timings and reduced trading holidays. A lack of consensus amongst market participants has kept the issue on the backburner, with both the stock exchanges (BSE/NSE) yet to fix a timeline on when the trade timings are to be implemented. While a majority of frontline brokers are keen on a quick implementation of extended trading hours, the mid- and small-sized brokerages are said to have concerns relating to banking infrastructure support.

Trading platform spawns mutual distrust
The decision to allow National Stock Exchange (NSE) to start trading mutual funds on their platform has not gone well with a few Bombay Stock Exchange (BSE) loyalists. According to broking industry sources, brokers who are only empanelled with BSE are miffed with Sebi, which allowed NSE to start mutual fund trading well before BSE set its fund trading platform. “By doing so, the regulator has favoured the other exchange (NSE) and its top officials.

The move to start mutual fund trading in NSE will push Asia’s oldest exchange to a deeper crisis. It will force smaller brokers, who are only listed on BSE, to take membership in NSE. Brokers who do not have the means to have two trading memberships will lose all their clients,” said an old BSE loyalist. If sources are to be believed, a few brokers are planning to approach Sebi to stall NSE’s fund platform until BSE is ready with its own infrastructure.

US-India talks may spur defence stocks
Analysts are expecting defence stocks to do well in the coming quarters in the wake of the US-India bilateral talks for increased cooperation. The Obama administration has sought for opening up the economy, particularly by lifting the foreign direct investment cap in the defence sectors, from 26% to 49%. Recently, Prime Minister Manmohan Singh said that industrialisation and use of dual-use technology can play a crucial role in fostering India’s growth.

The above statement signals a relaxation in FDI in the defence sector, analysts say. L&T, Astra Microwave, Zen Technologies and Bharat Electronics are likely to benefit greatly if the government decides to increase the FDI limit, say brokers. The mandatory clause to include Indian firms in projects (for Indian defence forces) that are handed over to foreign defence companies assure a steady order book for Indian companies. In line with broader markets, key defence stocks such as L&T, Astra Microwave, Zen Tech and BEL ended lower in the range of 1-2% on the BSE.

Contributed by Deeptha Rajkumar, Shailesh Menon & Reena Zachariah