Rumours of Sebi’s badla ‘rethink’ buoy bourses

ENS Economic Bureau

Mumbai, April 30: Is the regulator buckling under pressure? The BSE Sensex jumped 96 points amidst strong rumours that there will be some relaxation with respect to a recent Sebi sub-committee’s recommendation banning badla in rolling settlement.

After opening with a gap of 37 points at 3,459, the Sensex surged further, gaining 96 points to 3519.16 as against last Friday’s close of 3422.76, a net rise of 96.40 points or 2.81 per cent.

Dealers said there were strong rumours floating in the market that there would be some relaxation by the regulator SEBI on the rolling settlement front. The market grapevine has it that the compulsory rolling settlement that extends to 200 scrips with effect from July 2, 2001, which includes all group scrips on the BSE, could be introduced in a phased manner.

Rumours have it that initially only some A group shares (not all of them) and B group scrips would be put in the compulsory rolling settlement mode. “It was further rumoured that the carry-forward facility would be allowed in the rolling settlement. This is in stark contrast to a Sebi sub-committee’s recommendation last Thursday that said no deferral products like carry-forward trading would be allowed in the rolling settlement that extends to A group scrips starting July 2, 2001,” said a market source.

The Sebi committee’s recommendation that was announced after trading hours on Thursday shaved off 134 points from the BSE Sensex on the last trading session on Friday. This had raised fears that trading volumes would plunge in the absence of deferral products in rolling settlement. Almost half of Friday’s losses have been recouped today what with a 71-point surge in the BSE Sensex by mid-morning trades.

Meanwhile, brokers and other market participants have already started lobbying against the ban on badla, ALBM and BLESS. The plan to dilute the move towards rolling settlement has raised eyebrows among market experts. “This was one opportunity to push in reforms. Now there is excessive speculation in the market,” said an expert.