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Vivek Law & Parul Monga
Mumbai, Sept 16: OTCEI has identified more than 500 scrips which will be put on the permitted segment of the exchange. These include about 364 existing blue chips at the National Stock Exchange (NSE). About 300-odd common NSE and OTCEI members are set to reap a bonanza through a major arbitrage opportunity which is going to be thrown up from mid-October, when a revived OTCEI kicks off operations.
Speaking to The Financial Express after having got all the requisite approvals, OTCEI managing director, Joseph Bosco said that the exchange has identified about 257 additional NSE scrips (107 were in the permitted category of NSE which is now dead), about 100 B1 and B2 group stocks listed at the Bombay Stock Exchange (BSE) and about 40 scrips which are regional in nature. All these securities will be put on the permitted category.
The listed segment on the other hand, will be injected with a fresh lease of life with improvements in the market making system and better settlement systems.
For an NSEbroker who is common to OTCEI as well (and there are 300 of them which are fairly highly capitalised) there is a bonanza. On the one hand, the OTCEI system will be connected to the V-Sat network of NSE. More importantly, the exchange has timed the pay-in of its settlement with the pay-out at NSE.
The clearing house of the two exchanges will be the same. "On Tuesday, the NSE member will be able to shift his position to OTCEI. OTCEI will have a Friday to Thursday settlement cycle. The pay-out at NSE will therefore coincide with the pay-in at OTCEI (ie the following Wednesday).
As the clearing house is the same, the member will practically be collecting his pay-out from one part of a room and depositing his pay-in at another corner of the room. This is going to be a major incentive for the common brokers", said Bosco.
Market players point out that this may also see a reduction in shifting of positions of NSE members to Bombay Stock Exchange (BSE) which is the only alternative right now.
The scrips(including some of which were earlier in the permitted category) which will throw up the arbitrage opportunity for common members will include stocks like Reliance, SBI, Telco, Tisco, Infosys, Aptech, Asian Hotels, Balrampur Chini, Bayer India, Bausch & Lomb, BPL, Brittania Industries, Carrier Aircon, Crisil, Crompton Greaves, Essar Oil, Essel Packaging, Flex Industries, Garware Polyster, Godrej Soaps, Hero Honda, Knoll Pharma, Lakme, Lupin Laboratories, Marico Industries, Nirma, Novartis, Pfizer, Philips, P&G, Siemens, Tata Infotech, Videocon, Wipro, Asian Paints, Baja Auto, Bata India, Cadbury, Castrol, Colgate Palmolive, Glaxo, HLL, and Nestle.
The other advantage for an NSE member who also has an OTCEI card will be an access to trading in top B1 and B2 group stocks listed at rival BSE.
About 109 such scrips have been identified and will be put on the permitted category.
"We have shortlisted these companies as they are fundamentally very good. At the end of the day, the charter for OTCEI is toprovide a platform for small and mid-cap companies to trade their shares. These category of stocks are going to provide the best returns to the investors. While the aim to create arbitrage is aimed at increasing the total volumes at the exchange which int urn will lead to revival of trading interest at the bourse, the focus is going to be on small and mid-cap companies. A critical ingredient of this exercise will be targeting IT industry stocks", said Bosco. Some of the scrips identified from the B1 & B2 category of BSE are Alembic Glass, Bajaj Electricals, CMC Ltd, Camlin, Corn Products, Cox and Kings, Cyber Tech Systems and Soft, Bombay Oxygen, Fem Care Products, Cheviot Ltd, Goa Carbon, Grand Master Unit Scheme-1993, Hoechst Schering Agrvo, Dhunseri Tea and Industries, Elgi Auto parts, Information Technology, JL Morrisson, Kirloskar Brothers, Neyvelli Lignite Corporation, NRB Bearings, PCS Industries, Sierra Optima, Sintex Industries, Sony Corp India, State Trading Corporation, Sri Adhikari Brothers,Steelage India, Unicorp Industries and Zenith Computers.40-odd scrips which are currently traded primarily at regional exchanges will be brought on to the national network of OTCEI. "We have over a 1,000 members. These companies and others that are being added are all going to be available to an investor across the country now", said Bosco.
Among the 40 scrips recognized on the regional exchanges the prominent ones are Archies Greetings & Gifts Ltd, Geojit Securities, Ace Laboratories, Gujarat Mineral Development, ITI Ltd, Punjab Communications, Canfin Homes, SPIC Electronics, RS Software, Vikrant Tyres, State Bank of Mysore, Fujitsu-ICIM, Amrutanjan, Mysore Breweries, Infotech Enterprises and PSI-Datasystems among others.
The exchange is not losing its grip on its pure listed segment which about 100 small cap companies listed. This segment will be revamped with better systems. Rolling settlements will go. It will be back to paper form of trading till such time OTCEI gets on to the demat map. A new marketmaking mechanism will be put in place.
"The aim is to provide a one-stop-shop to investors. The new look OTCEI will allow an investor to pick up a good NSE scrip, a small mid-cap and small-cap scrip of BSE and a very small cap scrip listed at OTCEI, all through one system", said Bosco.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.
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