Ambani dispute hurts markets, says Pranab

The ongoing spat between the Ambani brothers over the pricing of natural gas will negatively impact domestic capital markets and the larger interests of industry and government, finance minister Pranab Mukherjee said on Wednesday.

Speaking at an Idea Exchange programme organised by The Express Group, Mukherjee said the controversy between Mukesh Ambani’s Reliance Industries Ltd (RIL) and the Anil Dhirubhai Ambani Group (ADAG) has also been unfortunate for the larger interests of the economy.

“It will have its adverse impact on the capital markets because they (the two groups) are too big. They are much bigger than they were in the seventies,” he said. As of August 26, the two groups combined accounted for more than 10% of the market capitalisation of the two major stock exchange BSE and NSE.

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Trickles of woes, torrents of panic

India's equity markets continued to move in inverse proportion to crude prices, which touched a historic $144 a barrel on Tuesday, as the calendar year passed into the second half on Tuesday. Extending the losses for a third consecutive session, key Indian share indices breached psychological levels on Tuesday as investors started dumping more stocks.

The sharp fall in the stock market, combined with high crude prices and a record monthly trade deficit, took the rupee down to a 15-month low on Tuesday. The local currency ended at 43.34/36 a dollar, taking its fall this year to more than 9%. It briefly fell to a low of 43.50, it weakest since April 2,2007.

The 30-share Sensex of the Bombay stock Exchange (BSE), after witnessing subdued opening,turned south wards with weak opening in the European markets to end the day with a loss of 499.92 points, or 3.71%, to end below 13k-mark at 12,961.68 points.

The broader S&P CNX Nifty of the National Stock Exchange (NSE) posted a loss of 143.80 points or 3.56% breaking the 4k level to close at3,896.75 points.

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Tough terms for broker-client ties

The Securities and Exchange Board of India (Sebi) has proposed a new, stricter policy for improving the sales practices of stock brokers. The proposed policy has put a slew of obligations on the brokers with respect to their non-institutional clients, or retail investors.

Sebi wants to strengthen the know your client (KYC) norms for retail investors. It wants retail investors to know more about the brokers with whom they are entering into a trading relationship.Sebi also wants brokers to know more about their clients,their financial standings and, based on these details, the broker should hand the clients investment advice.

The capital market regulator has proposed this policy following the suggestions it received.In a discussion paper posted on its website on Monday, Sebi said the matter was discussed with the stock exchanges (SEs). There is a need,it said,to enhance the regulatory framework and also to create a sense of awareness among investors.

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