Trading on the National Stock Exchange (NSE), the countrys largest stock exchange, will resume on October 9 following the total breakdown of the Insat-2D satellite. The NSE brass will hold talks with the department of telecommunica-tions(DoT) today to obtain space on either Insat-2B or 2C for the NSE network that was earlier on 2D.
NSE managing director R H Patil sought to downplay the impact of the NSEs closure on the stockmarkets, saying: The impact would be minimal as there are many stock exchanges in the country. Also, about 80 per cent of the brokers on the NSE have a card on other exchanges too.
However, Patil conceded that there would definitely be an impact on the turnover of other exchanges as brokers who engage in arbitrage business would be unable to do so.
The NSE is Indias largest exchange in terms of traded volumes and has a network of about 1,600 very small aperture terminals (V-Sats), spread across 166 cities. Although the exact figures are not available, NSE officials said the bourses average daily turnover for September was Rs 1,600-Rs 1,700 crore. The Bombay Stock Exchange(BSE) had an average turnover of approximately Rs 900 crore per day in September.
We will be shifting about 781 V-Sats to Insat-2A by Wednesday so that at least one V-Sat of each broker will be functional and no one misses out on trading opportunities, said Patil.
However normal trading on the Calcutta Stock Exchange and in the permitted segment on the Over-the-Counter Exchange of India (OTCEI) will commence today. The two exchanges have a limited number of V-Sats, which have been shifted to Insat-2C without much difficulty.
The NSEs committee on settlement issues and the executive committee will meet tomorrow to discuss the trades executed on the NSE on October 1, the only trading day in the current settlement. NSE officials said the deals would probably be merged with those of the new settlement, commencing on Thursday.
As a temporary measure, till space is available on either of the two satellites, the NSE has decided to shift all its V-Sats back to 2A. The NSE had shifted 650 V-Sats to transponder 13 on Insat 2D after certain problems developed in Insat 2-A.
NSE officials said shifting immediately to a new satellite(2B or 2C) would have required at least 3 to 4 weeks, causing trading on the exchange to be suspended for that period. Hence, the exchange has decided to temporarily revert to Insat-2A.
The whole operation of shifting V-Sats from 2A to 2D and back, and again shifting them to a stable satellite, would cost the exchange at least a couple of crores, said NSE officials.
The NSE has requested DoT for a full high-power transponder, against the half transponder that it presently has. We will be expanding the number of V-Sats to about 2,500 shortly. In addition, handling operations on the depository segment will require additional bandwidth, said Patil.
Marketmen are eagerly awaiting the turn of events in the market on the first three days, since the NSE will be not be operational on those days.
The NSE will make the necessary changes in its setting of base prices for stocks, based on the developments at the other stock markets through trading on Friday and the average of the last half-hour of trading at the exchange.
The NSE disruptions also indirectly affected Bombay Stock Exchange brokers as they could not transfer their open positions onto the NSE, yesterday being the last day of trading in the current settlement cycle at the BSE.
Most of the brokers who are into arbitrage will unwind their positions, which could cause the market to come down this week, said Pashupati Advani, a leading NSE broker.
Much will depend on the positions in the market. In case there are too many long positions, the market could witness a sharp fall. In case of too many short positions, the market could flare up towards the end of the week, said a dealer at an institutional broking house.
In view of the recent mishap, the CSE will write to the Securities and Exchange Board of India and DoT, stating that stock exchanges should be exempted from a DoT clearance each time they seek to shift media communication lines from one parameter to another. At present, all bourses have to take DoTs permission to shift their lines of communication. DoT reviews such requests on a case-to-case basis.
