Cover
Story
Demutualization
of Stock Exchanges --R Ramaseshan
Stock
trading has seen it all; outcry system to paperless trading
to Internet revolution and so on. But the facilitators or
the exchanges have changed little over the years. Many of
them still operate as per the same good old established norms
and succession system. Albeit, the process continued to be
unquestionable till now. Success of global exchanges with
a different management structure throws up interesting possibilities
for other exchanges. It's time to identify the faint message
from the noise. All the exchanges that have embraced the new
culture are competitive, efficient and ambitious, ready to
operate on a global scale. There is a scope for improvement
in all the activities of an exchange. This article demonstrates
how a change in ownership structure can make a difference.
©
NSE India Newsletter June 2002. Originally published as `Issues
in Demutualization of Exchanges'. Reprinted with permission.
Demutualization
: The Sooner the Better --Kamakshya
Prasad Prusti
Stock
exchanges have created wealth out of thin air for many. Often
seen as a source of uninterrupted flow of money for outsiders,
these are one of the most respected temples of wealth. Not
anymore. If global exchanges are to be taken into account,
there is a tremendous pressure on the exchanges to evolve
and continue to provide value added services to the customers
at no extra cost. Led by innovation in technology, a group
of bargain hunting customers don't mind switching to other
exchanges and often to alternate platforms of trading. Time
for the exchanges to shift or shut down. This article suggests
that a change in ownership brought in by demutualization can
just be the tonic the doctor prescribes to the exchanges.
© IUP. All Rights Reserved.
Industry
Analysis
Passenger
Cars and MUVs Moving in Low Gear --S
Muralidhar
The
Multi Utility Vehicle (MUV) industry invites a lot of attention,
solely for the excitement generated by products falling under
this category. Vehicles coming under the `MUV' category typically
serve both the commercial sector and the retail consumer segment.
A trend in growth of the `MUV' industry augurs well with the
overall economy; because that means good news for the steel
industry, tyre industry, paint industry and ancillary units
etc., among several others. At a time when consumers have
started looking beyond the two wheelers, coupled with easy
financing schemes, the manufacturers are trying hard to beat
the slowdown in their own little ways. On top of that, it
is a comprehensive feeling among the industry watchers that
the worst is behind them. Looks like the industry is in for
a long drive.
©
Business Line, December 15, 2002. Reprinted with permission.
Technical
Analysis
Zigzag
Zig! -- DG Praveen and Vivek
Jain
The
markets swing but an expert trader enjoys the joyride. Volatility
gives the thrill of trading and the joy of taking decisions
based on the available information. When a technical analyst
is armed with cutting edge analysis of the latest tools, the
outcome takes everybody by charm. Be it a rising market or
a falling, all types of market are an opportunity to harvest.
It all boils down to identifying the pattern. Especially with
trading revolution, there is no looking back for a modern
technical analyst.
© IUP. All Rights Reserved.
Investor
Relations
The
Challenges of Investor Marketing
-- Hermann Simon, Bernhard Ebel and Markus B Hofer
Existing
gap between the company's actual performance and its market
value prompts action from value hunters. In a scenario like
this, there is a new found initiative needed from the company
management too; from a perspective that goes far beyond traditional
investor relations. Existing communication strategies of many
companies are sadly potent enough to convince the investors
either to purchase or hold the company's shares. The question
is, whether the processes of investor marketing can completely
transform the way capital markets work. It may not, but it
can always bring thes investors and companies together and
help them address issues of mutual concern. In the long run,
a well-targeted strategy of investor marketing can bring a
sizable difference in the way a company is being perceived
at the exchanges bringing satisfaction to the investors and
value premium to the companies.
©
www.ebfonline.com. Reprinted with permission.
Primary
Markets
Green
Shoe : What is Good is Never Plentiful --
Surabhi Agarwal and Namita Gupta
After
more than 40 years of heavy regulation and anemic growth,
the Government in 1991 dramatically opened the economy to
market forces and promoted modernization of financial institutions.
Government control of the prices of Initial Public Offerings
(IPOs) has ended. The number of public companies rose considerably
from 1,000 in the late 1980s to 6,000 by 1994. The historical
experience of investors, wherein an IPO was an almost automatic
winner, created an acceptance in the marketplace for any new
issue. Finally, better regulation, enforced disclosure, and
investor protection have greatly improved the integrity of
the private capital market. While the capital market reforms
are impressive, there are still areas that present major problems.
The market has still not recovered from its skittishness about
IPOs. Indian capital market institutions are still not completely
up to world standards.
© IUP. All Rights Reserved.
Derivatives
Markets
Derivative
Instruments : Why and Why Not?
--GRK Murty
Academicians
claim that derivatives offer certain economic benefits such
as risk sharing, efficient allocation of capital, information
gathering and price discovery. And yet, there are widely held
apprehensions about their potential to destabilize financial
markets. Indeed the losses suffered in the recent past by
even some of the well-managed companies vindicate the statement
that derivatives trading is risky. This article juxtaposes
the economic benefits along with the inherent risks of derivative
products and cautions that they must be traded with care to
maximize benefits and mitigate risks.
© IUP. All Rights Reserved.
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