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Our Market Bureau
Mumbai, Dec 3: The Securities & Exchange Board of India (SEBI) will bring trading by all investors in stocks which constitute the S&P CNX Nifty and Sensex indices within the ambit of compulsory dematerialised trading from April 5, 1999.
At a meeting of the working group on depositories on Thursday, it was decided that 29 scrips would be added to the list of 31 securities in which mandatory dematerialised trading has been announced from two specified dates. This will take the number of securities to be traded in dematerialised form to 60 by April 5, and cover the Nifty and Sensex stocks.
The 29 stocks include Arvind Mills, BHEL, Cipla, Colgate, EIH Ltd, GE Shipping, Glaxo India, Grasim Industries, HDFC Bank, Hindalco, HLL, IFCI, Indian Hotels, Indian Rayon, IPCL, ITC, MTNL, Nestle, Oriental Bank, Procter & Gamble, Reliance Capital, Reliance Petroleum, Reliance Industries, Smithkline Consolidated, Tata Chem, Tata Power, Telco, Tisco, and Novartis.
Meanwhile, SEBI has extended the December 15 deadline forcompulsory trading in four stocks by institutions, as the companies failed to sign up with the depository on time.
They are Bharat Earth Movers, Garware Polyster, Indian Shaving Products, and ITC Agro-Tech.
The working group also reviewed the depository's progress. It was revealed that in the past few settlements, dematerialised shares constituted 52 per cent of delivery in all scrips in value terms at the Bombay Stock Exchange (BSE), and 40 per cent at the National Stock Exchange. It was also pointed out that 85 per cent of vyaj badla shares were being delivered in dematerialised form on the BSE. SEBI also convened a meeting with mutual funds and the National Securities Depository Ltd to take stock of the progress made by mutual funds in dematerialising their portfolios.
JM Mutual Fund and Templeton Mutual Fund have dematerialised 95 per cent of their holdings, and others have dematerialised 60 per cent of their holdings.
All mutual funds, however, said that by end-January, 1999, around 75 per centof their holdings would be in dematerialised form. Some of them would achieve over 90 per cent dematerialisation by end-January, 1999.
The funds also indicated substantial savings in transaction and custodial costs as a result of trading in the dematerialiased form. The savings ranged from 33 per cent to 85 per cent. They are likely to improve in the near future owing to addition of scrips in the mandatory dematerialised trading segment.
This will be reflected in higher net asset values (NAVs) of mutual funds, and result in enhancing unitholder value. SEBI advised the funds to expedite the process of dematerialisation of their portfolios in the interests of unitholders.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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