Articles by Jairaj Kapadia

Still Wanting for OTC Exchange THE month of May roiled by, June ended and July has started already, but the proposed OverThe-Counter (OTC) market in securities of companies not listed on the stock exchanges is still nowhere near coming. It had been said by no other than the chief executive of the Over-The-Counter Exchange of India, Ravi Mohan, way back in March, that the OTC market would finally become operational in May But that was not to be as was observed in these columns (April 4). Let alone May, the position is the same in July and a report just published now puts off the OTC market's start to August.

'Contaminated' Securities Jairaj Kapadia IT was much ado about nothing, the Unit Thist of India refusing deliveries of shares in the names of the suspects in the securities scam. Following that trading was suspended by brokers on the Bombay Stock Exchange for 15 days from June 10 to June 25 with their counterparts on the other major stock exchanges also refraining from transacting business. The UTI objecting to the share deliveries and ordering the Stockholding Corporation of India, handling institutional investments, to refuse acceptance as *bad deliveries' threw the market out of gear. The stock exchanges maintained that the shares delivered were in order and the brokers did not budge in the matter. The Securities and Exchange Board of India and its chairman, G V Ramakrishna, who has looked ever eager to safeguard the interests of common investors, also did The Week's Companies nothing in this situation. The SEBI chair man first declared that the market must go on with trading and subsequently expressed an opinion against the UTI's assuming an adverse stance on the share deliveries.

Fears of Corporate Downturn Belied Jairaj Kapadia CORPORATE results are belying fears of an adverse turn in the performance of companies. The results for the year 1990-91 were good. For 1991-92 as the companies have started declaring their results, they have turned out to be still more positive. And this not because the fears of an adverse turn were unfounded, but despite that. Which, it may be claimed with some justification, not only shows the resilience of the corporate sector, but, what is more important, demonstrates the business acumen of the managements of companies in the private sector.

Finance Companies Bear the Brunt Jairaj Kapadia NOT until the reports of the investigation into batiks' securities scandal are out will speculation about it die down. Estimates of the amount involved have varied vastly from the figure of Rs 622 crore of State Bank of India to start with to Rs 2,000 crore in no time and now to as much as Rs 5,000 crore. Speculation has thrived with tfic Reserve Bank of India ordering Bank of Karad into liquidation and put- ring Metropolitan Co-operative Bank in Bombay on hold due to these two banks' apparently irretrievable involvement in the business. The mist may clear to some extent with the RBI making public the report of its investigation which as the Hie Week's Companies finance minister said during his recent visit to Bombay the RBI would be doing very shortly, Meanwhile, the stock market, which took a body blow as the CBI was asked by the government to investigate Harshad Mehta's involvement, has started showing signs of levelling after a sharp decline in share prices. The sensitive share price index of the Bombay stock exchange, which in two days, April 28 and 29. had caved in from 4,467.32 to 3,674.41 and was down still further at 2,963.49 on May 28, was seen to be levelling at around 3,000. And while scrips of all description suffered as prices declined all round, in relative terms (Rs lakh) finance company shares fared far worse. These shares had been running ahead of the others in the bull, market after the budget following the concessions announced for equity investments and the permission to the private sector to establish mutual funds. But as the banks' securities scandal affected the financial sector, finance company shares have moved more rapidly in the reverse gear.