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July 11, 2001
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Money > Business Headlines > Report July 11, 2001 |
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Small exchanges in death throesRakesh Sharma & Sangita Shah Small exchanges are clinically dead. Of the total 23 bourses in the country, 18 are almost extinct in terms of total value of transactions of securities traded. The surviving five exchanges account for 98.5 per cent of the total volume generated country-wide. The National Stock Exchange alone accounted for 53.43 per cent of the total turnover of all bourses in the financial year 2000-2001. The Bombay Stock Exchange was a distant second, accounting for a 30.23 per cent share. The Calcutta Stock Exchange's share in trading turnover was 10.72, while that of Delhi Stock Exchange was 2.53 per cent and Ahmedabad Stock Exchange 1.63 per cent. Uttar Pradesh, Ludhiana, Pune, Bangalore, Hyderabad, Inter-Connected Stock Exchanges and Cochin Stock Exchange accounted for a total 1.5 per cent of the total turnover. The remaining OTCEI, Madras, Madhya Pradesh, Magadh, Vadodara, Guwahati, Bhubaneshwar, Coimbatore, Jaipur, Mangalore and Saurashtra and Kutch stock exchanges are alive only on paper. The introduction of new-age trading system from July 2 will result in more corpses and in all likelihood ASE, CSE and DSE will either die a natural death or will merge with either the NSE or the BSE or both and manage to survive. However, the future of other marginal exchanges looks bleak given the current situation in the market, especially after the trading performance in the last financial year, market sources said. According to players, with the introduction of technology based on-line trading system, the business moved away from small exchanges to the larger exchanges. Moreover, the huge liquidity and order depth of big exchanges sucked out the liquidity of smaller exchanges. Removal of mandatory listing at regional stock exchanges added fuel to fire with companies now gradually resorting to de-list stocks from the smaller exchanges to save multiple compliance of regulations of the exchanges. Companies are more and more resorting to buy-backs, which leads to de-listing of stocks in some cases. Even multinational companies are hiking their stakes in local subsidiaries, leading to a floating stock below 10 per cent and thus ending into de-listing of the stocks. Powered by YOU MAY ALSO WANT TO READ:
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