☼ BSE is ready to launch trading in commodity derivatives (Share Market News)
BSE is ready to launch trading in commodity derivatives and is waiting for the final approval of markets regulator SEBI to commence operations, its chief Ashish Chauhan has said.
☼ SEBI introduces GSM, stricter surveillance for stocks (Share Market News)
Sebi has introduced new surveillance measure to check stock price manipulation.
Sebi has decided that stocks that witness abnormal price rise not commensurate with financial health and fundamentals like Earnings, Book value, Fixed assets, Net worth, P/E multiple, etc of a company will now fall under the Under the new Graded Surveillance Measure (GSM).
Under GSM, stocks will be placed in trade to trade category and brokers and traders will have to deposit additional amount as surveillance deposit, which shall be retained for an extended period that may be reviewed weekly and monthly basis. This will be in addition to other surveillance measures including freezing of price on upper side of trading in stocks.
☼ SEBI to tighten algo trading rules (Share Market News)
The strengthened regulations would aim to minimize instances of flash crashes. Algorithmic trading can be used to execute complex trading strategies at a very high speed. Algorithmic trading refers to the use of software program to execute trading strategies at a much faster pace. India is one of the very few countries in the world which have some mechanism for controlling the misuse of algo.
On the National Stock Exchange (NSE), algo trades accounted for close to 16% of all trades. On the BSE, it was 8.56% in January.
☼ India may soon allow institutions to trade commodity futures (Share Market News)
India could start allowing institutional investors to trade in its annual $1 trillion commodity futures market as soon as in a month. The government targets deepening of the market. India has allowed futures trading in commodities since 2003 but has so far kept out foreign investors, banks, mutual funds and other institutions. The move to open up to institutional investors will give large companies hedging opportunities and help in integrating the spot and futures markets. Mutual funds are likely to be the first to get access to the commodity futures market, may be in a month, Sinha said.
In the last few years commodity futures markets have stopped growing. This step will boost commodities trade and restore confidence of retail investors. For better price realization you have to have a mix of all the participators in the market apart from speculators. Goldman Sachs Investments (Mauritius), Blackstone GPV Capital, Matthews Asia Growth Fund and Inter Continental Exchange (ICE) are among foreign investors that hold stakes in Indian commodity exchanges. With the entry of institutional investors liquidity will rise. SEBI is also planning to allow options trading in commodities.