/ETMarkets Morning Podcast: Will crackdown on margin funding hit volume?

ETMarkets Morning Podcast: Will crackdown on margin funding hit volume?

Good Morning.
>> NSE has launched a major crackdown on brokers’ indirect arrangements with NBFCs for margin funding. Expect trading volumes to drop

>> Many mutual fund investors may have missed the post-Budget stocks rally, as a major glitch at NPCI disrupted their transactions

>> Honchos in top IT companies are cashing out their Esops as stocks rule at record highs

>> Voda Idea is said to have got some extra time to clinch a $ 2 billion debt deal

I know not too many good headlines to start the day. But it’s not so hopeless either. Do join me for ETMarkets Morning, the show about money, business and markets. I am Atul PM.

Lemme now give you a quick glance at the state of the markets.

Dalal Street may have gave up all the gains on Tuesday, but Nifty futures in Singapore trade showed some promise this morning. However, the equity rally seems to have stalled in other Asian markets. Stocks dipped in Japan and were little changed in Australia and South Korea. Bitcoin halted its surge towards the $ 50,000 mark yesterday, and slipped 0.1% to $ 46,354 in Asian trading this morning. Crude oil traded flat but steady. Gold gained in India on Tuesday and was up mildly in global markets this morning.

That said, let me tell you a little bit more about the NSE crackdown. The stock exchange has asked all traders not to sign any agreement or arrangement directly or indirectly between their clients and NBFCs to fund secondary market transactions or margin requirements. Several brokers had tried to work around the Sebi norms on margin funding, and had entered indirect arrangements with NBFCs or their subsidiaries to facilitate loans to clients to fund peak margin requirements. The fear is, this might hit trading volumes.

The IT story is very enriching. Senior executives at TCS, Wipro, Infosys, L&T Infotech, L&T Technology Services, Persistent Systems, Mphasis and HCL Tech have encashed lots of shares, by disposing of portions of their employee stock ownership plans over the past two months. They pocketed handsome returns in a booming market that lifted many of these stocks to new highs in January.

Good news for Vodafone shareholders. The deadline for exclusive talks between Vodafone Idea and a foreign lenders’ consortium led by Oak Hill Advisors for finalising the terms of a $ 2 billion credit line for the telco has been extended till February 28 from January 31. The lenders are said to be keen on closing the deal, but are seeking some safeguards and business milestones in place to protect their investments

The NPCI glitch has left the market disrupted. Hundreds of thousands of mutual fund investors may have missed out on the stocks rally of last 10 days, digital payments and settlements got disrupted. The payments firm upgraded its automated payment system on January 31, but problems surfaced in its implementation. Disgruntled investors are now seeking compensation from fund houses for not getting unit allotments on time,


Retail exodus from equity mutual funds continued for the seventh consecutive month. Investors sold equity funds worth Rs 9,253 crore in January, and have cumulatively pulled out Rs 42,256 crore over the last seven months. SIP flows continued undisturbed. Debt funds saw outflows of Rs 33,409 crore in January, primarily led by liquid funds where Rs 45,000 crore moved out.

And now before I wrap up this edition, here is a look at some of the stocks buzzing this morning…

Debt-laden real estate financier Altico Capital is all set to surrender its NBFC licence as part of a restructuring plan approved by lenders

Brookfield Asset Management is close to purchasing some 1,200 MW solar assets and the engineering, procurement and construction division of Mahindra Susten, a subsidiary of the Mahindra Group

IndiGo parent InterGlobe Aviation has settled a case with the Sebi for alleged violation of corporate governance norms by paying Rs 2.10 crore as settlement charges

We have over a dozen stock recommendations for today’s trade from top Dalal Street analysts. Do log in to check out.

That’s it for now. For all the market news through the day, keep tracking ETMarkets.com. Happy investing!

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