MUMBAI, NOV 6: The Bombay Stock Exchange (BSE) is determined to bring back the renewal system -- carrying forward unfinished transactions -- in cash group of shares in order to improve liquidity and volume in the cash group. The BSE will approach the SEBI for reintroducing this system which was banned in 1995 to avoid speculation.

BSE president M G Damani said,``Ever since the ban on renewal in cash group (B2 group of shares), the volume of business has touched the rock bottom and jobbers have almost disappeared from the market.''

However, after the ban of renewal system, no jobber was willing to give two way quotes during weekly settlement due to inadequate delivery of shares. ``As long as the depository system is not in place, the renewal system can be used as an alternative route to protect the jobbers,'' Damani said.

Damani added that due to the disappearance of jobbers from the market, the business volume in the cash group has dropped substantially. Compared to Rs 5,47,728 crore market capitalisation as on September 30, 1997, the volume in all three groups was only Rs 18,910 crore. The situation has further deteriorated in October 1997 when the market capitalisation has come down to Rs 5,26,142 crores and the volume of business in all three groups was Rs 16,706 crore for the month which was only 3.18 per cent of market capitalisation.

``If SEBI is not willing to reconsider this case, we will be forced to take up the matter with the finance minister,'' Damani said.

Meanwhile, BSE is introducing a revised market friently badla system as recommended by SEBI recently from the beginning of the next account. The BSE chief said ``As on today only 125 brokers have opted for carry forward system.''

He is confident that about 50 per cent of the BSE brokers will opt for carry forward system gradually.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.