Financial Daily
from THE HINDU group of publications

Friday, June 22, 2001





Global war on corruption - II: Picking up momentum
THE World Bank president, Mr James Wolfensohn, soon after he assumed office in 1995, made the war on global corruption an inalienable part of the Bank's holistic strategy for eradication of poverty. The Bank itself has been setting the tone and the stage by incorporating its evaluation of the effectiveness of measures against corruption taken by member-countries in the agenda of all the meetings of its committees and plenary conferences.

Where's the market?
WHERE is the 250-million plus market? This is the question several foreign investors have raised. They complain that the buyer is elusive. Some suspect that the figure has been exaggerated to attract foreign capital. Others believe it is part of the prom otional tactics local governments indulge in.

PSU privilege?
IT IS DIFFICULT to relax for public sector units, as a special privilege, SEBI's capital market regulations, as sought to be made out by the Department of Disinvestment. It is a settled principle that the acquisition of a substantial stake in a listed co mpany by an investor also simultaneously commits him to offer to buy a minimum of 20 per cent of stake from other shareholders. The reason being that a substantial acquisition of shares, no matter what the price, represents a epochal event in the price d iscovery process of that scrip and the acquisition of a further stake of 20 per cent by such an investor reinforces the integrity of the valuation embedded in the initial acquisition.

Dead and gone
SIX years ago, in April 1995, bombs planted by Timothy McVeigh in the Oklahoma building complex housing federal government offices exploded, killing 168 innocent persons, including 19 little children in a day-care centre. The blasts were so powerful that when I visited the scene of the crime five months later, I could see that all the glass windows of nearby buildings had been smashed to smithereens.

Kashmir and Indo-Pak talks -- Case for a people's referendum
THE Musharraf-Vajpayee talks are due to take place in a few weeks time, and the new Pakistani President is doing his homework well. Not only has he held a conference of the corps commanders, he has also generated a debate throughout the country about the talks. Political leaders are reported to be keen on being consulted.

Old leaders
ADMITTEDLY, I was a bit envious watching the results of the British general elections. Mr Tony Blair won, of course. Despite his years in office, he still looks young, eager, and dynamic. Even the Conservative Party leader, Mr William Hague, though a dro ne, certainly looked as if he could **get a few things done, given the chance.

Aftermath of US power crisis -- Drilling better alternatives
THE RECENT power crisis that shook the North West states of the US almost became a national problem, even attracting the Federal Government's attention. Emergency measures to alleviate the effects of the shortage were called for, and this subsequently le d to the GOP Energy Plan, which, by and large, presents the energy policy of the Republican Party, now holding the reins.

Market: Stock-broke!
IT HAS been known for decades that brokers have been influencing the working of stock exchanges for their personal benefit at the expense of investors. Neither the government nor the Securities and Exchange Board of India (SEBI) could remedy the situatio n because of the self-regulatory nature of stock exchanges. The Government has failed to understand that the stock exchanges, though self-regulatory, are public institutions serving the interests of companies and the investing population, and that the st ock brokers are only intermediaries with licences to trade on the exchanges. Hence, the investing public and the issuers of capital, and not the brokers, must have direct or indirect control of the stock exchanges.

Rolling into a new era
THE equity market is not going to be the same after the T+5 rolling settlement begins on July 2. The first major noticeable change will be the sharp decline in the inter-exchange arbitrage. Under the present trading arrangements where all the stock excha nges are trading under the account period modes, there is considerable scope for intra-week speculation. It is possible to take a large exposure in any of the scrips, depending on the different levels of leverage/exposure that the stock exchanges offer t o their brokers.

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