CA Online

Foreign portfolio investors (FPIs) — the largest investor group in the Indian stock market — want the regulator to make life easier for them.  At a meeting with the Sebi chairman this week, about 30 officials and custodians of some of the large offshore funds appealed to the stock market regulator to do away with the rule that requires most offshore funds to be broad-based — having at least 20 investors with each holding not more than 49%.  They have also voiced their concern about the practice where copies of passport, social security numbers, and other national identification documents such driver’s licence of senior management officials and directors of many foreign funds are shared with brokers and intermediaries. The regulator has typically preferred ‘broad-based’ funds to minimise round-tripping of money and trades where FPI vehicles are used by a small club of investors to manipulate stock price. “However, it was argued that since Sebi has directed funds to disclose...

Reserve Bank of India’s projection of lower inflation and assurance on enough liquidity would be positive for banks’ treasury operation which could well boost earnings of many stressed governmentowned lenders, two people familiar with the matter said. These banks sold a net of ?12,036 crore of debt securities on Wednesday, this year’s largest single day sale, capturing gains from falling bond yields. On the same day, the benchmark yield dipped 13 basis points as prices rose. The benchmark paper Thursday yielded 7.43%, the lowest since April 10. The sovereign gauge plunged about 57 basis points past two months. Bond prices are yield move in opposite direction. “It seems, India is heading towards a comparatively lower interest rate scenario,” said Kamal Mahajan, head of treasury and global markets at Bank of Baroda. Banks are likely to post higher profits because of the fact that the hefty provisions against treasury losses made between March and June will now get a scope of reversal...