Dud stocks trade reduced

Market regulator Securities and Exchange Board of India (Sebi) crack down on manipulators in penny stocks has paid off, as there has been a "significant reduction" in trading in those dud stocks while bullish sentiments on blue-chip was driving up the sensex.

"Penny stocks were active in September and October. Sebi took steps to address market manipulation taking place in small and medium cap stocks," said Pratip Kar,executive director,Sebi in Indo-US summit here today.

Following the intervention of the market regulator, he said,"There has been significant reduction of undesirable stocks which were trading in the bourses."

Though the euphoria over penny stocks have faded off, investors continue to be bullish on blue-chip shares as it is reflected in the surge in Sensex and Nifty.

Sensex, which crossed the 8,800 mark on october 5, slid to less than 8,000 points in october but is again on the upswing. Sebi will shortly revise norms for public offers and unveil a slew of products for secondary and derivative markets.

"Sebi is taking steps to streamline IPO norms to help Indian companies compete globally and make follow on public offers more efficient and quick to make markets compete in capital raising (exercise) with international markets," said Kar.

He said the IPO disclosure and other market disclosure norms in India ranks best globally and that was one of the reason why US pension major Calpers entered the country.

The market regulator is currently reviewing the risk management system to make the secondary market more vibrant.

"Sebi is planning to put in place new systems and newproducts in next few months that will make the secondary market trading more efficient," kar said.

The regulator is planning to overhaul the derivative trading by taking measures to improve it and by introducing new products.

He said more steps are being taken to develop corporate debt market to complement the equity market.

On the corporatisation and demutualisation of stock exchanges including BSE, the Sebi official said it has happened in india in shorter time than in any other country.

"By next financial year, the necessary infrastructure will be in place for fully demutualisation," he said, adding that sebi is putting utmost emphasis on market safety and integrity.