Tax-hit intermediaries join forces

Stung by the proposed transaction tax, arbitrageurs, jobbers and day traders decided to stay away from the market for Monday and Tuesday.

They threatened to stay away completely from the market in case the finance minister did not roll back the proposed transaction tax.

Sudhir Bheda, a jobber and one of the few who initiated this impromptu meeting at the Birla Matoshri Auditorium in Mumbai said their main reason behind the congregation of jobbers, arbitrageurs and day traders was to form an association.

S Jambusare, a self-confessed day trader, said, "we are already paying stamp duty of Rs 200 per Rs one crore to the state government, besides Rs 400 per crore as turnover tax to the exchanges. An additional transaction tax will affect us adversely, as not all transactions yield profits."

"We are a very scattered community and are proposing to form an association called Association of Stock Market Traders (ASMT)."

Bharat Patel, also a jobber, added that their objective was to get everyone together under one umbrella, to show their strength.

"We add the much needed depth to the market with almost 80 per cent of the daily traded volumes coming from our community," said Patel.

Bheda added that member of parliament Milind Deora has written to the finance minister on behalf of market participants asking for the removal of the transaction tax on all trades, limiting its implication to only delivery trades.

Almost 1,500 people thronged the venue with many standing outside talking to media as they could not get entry into the over-filled hall.

Mukesh Shah, another jobber, said, "We don't want the transaction tax and this meeting is a reason to get us all together and also to put our point across to the finance minister."

Surprisingly, though the meeting was well attended, leadership issue was still vague. Amit Purohit, an organiser, said, "We had expected about 300 people but the response has been overwhelming."

Derivatives mart drying up: Volumes in the derivatives segment touched a one-year low with day traders staying out. The turnover was a low Rs 4,268.45 crore with just 1.49 lakh contracts being traded.

Index futures saw a turnover of Rs 1,597.88 crore while stock futures recorded a turnover of Rs 2,176.81 crore. Cumulative FII positions as on July 09, 2004 was 22.99 per cent.