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Wednesday, May 9, 2012

Emerging Trends in Indian Capital Market - Sachin Karpe

The Indian Capital Market is more than a century old. Its history goes back to 1875, when 22 companies established the BSE. Over the period, the Indian investments industry has progressed consistently to become one of the most powerful, modern, and effective investments marketplaces in Asian Subcontinent.

The modern times experienced significant changes in the Capital Market industry. It is well known that platform used for Trading has become automatic, electronic, order-driven, nation-wide and screen-based. Screaming and gesticulations have moved aside to usher in clicks and punches. Speed and performance is the feature of the current program. Across the System, varieties of industry individuals conduct business with one another anonymously and at the same time. On any dealing day, more than 10,000 workstation come in existence, in 400 cities and townships; details are exhibited on real-time basis. Equivalent opportunity is provided for all worried to access the details. Visibility is guaranteed in regard of distribution of details, price and huge of the order; but, member’s identification is desired to be invisible to avoid any tendency in reaction. These days, a dealing member need not slog out at the Dalal Road, Mumbai or to any stock exchange building elsewhere; he can simply sit at his computer and perform the transaction.

A buyer, nowadays, need not wait, with his fingers and hands crossed, for a couple weeks or more, for getting surpassed cheques or sharp notices for the sale profits of his investments. The dealing pattern has been shorter to T+2. This reducing of the pattern has been done in a phased manner but in a fast sequence – from T+5 to T+3 to T+2.

Another advancement that brought tremendous comfort to the traders was dematerialization of the scrips. Now almost 99% of the scrips in the marketplace are dematerialized. Almost 100% of the investments are in D-mat form. Difficulty of physical legal care and exchange, boredom of intimating change of address and problems of bad shipping, overdue shipping, non shipping and the threats of forgery and scammers have almost vanished – or shall I say - have been dematerialized! The advantage is cherished but not the price. We should keep in mind the saying – no price, no advantage. There is no free lunchtime in this community. Still, there is no doubting the point that there could be a probability for decrease in the cost; such opportunities are researched.

At the stock marketplaces, safety management systems has been put in position, Value-at-risk margining and visibility boundaries, on-line tracking of margins and positions, Clearing Organization and Agreement Assurance Finance procedure for trade settlement – all these have made Indian Capital Market now probably outstanding, in terms of transparency, performance and safety.


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