Sebi allows institutional short-selling from Feb 1

The Securities and Exchange Board of India (Sebi) on Wednesday said it
would allow short-selling by domestic and foreign institutional
investors from February 1. Last month, Sebi had given its nod for
short-selling, which it had banned in 2001 in the aftermath of Ketan
Parekh scam.

"The Reserve Bank of India has given its nod to Foreign Institutional
Investors (FIIs) for short-selling, now Sebi will allow it for all
institutional investors from February 1," said Sebi chairman M
Damodaran here.

Damodaran's comment came a day after the RBI allowed FIIs and their
sub-accounts to short sell, lend and borrow equity shares in Indian
companies. All institutional investors, overseas and domestic, would
be able to short sell, Damodaran said.

Damodaran was addressing the national programme on director
orientation organised by the Institute of Company Secretaries of India
(ICSI).

He further said that Sebi was ready to review the 10 per cent limit of
stake held by directors or key management personnel in a company,
proposed to be brought under the insider trading norms.

"What we have put out yesterday is a paper for discussion. Whether 10
per cent limit of stake held by officers or promoters was too high or
low will be finalised after receiving public comments," he said.

This regulation, Damodaran said, was aimed at checking insiders, who
have greater access to price-sensitive company information, of making
short-term profits.

Earlier, Sebi in order to curb insider trading, had proposed that
company insiders should surrender profits made in any equity-based
securities transactions of the company, if both the buy and sell side
of the transaction are entered into within six months of the other.
The regulator has invited public comments on the discussion paper by
January 21.

Industrial production growth falls to 5.3 per cent in November 07

(Disclaimer: This report has been taken from some unknown source, and is not authored by me)

Growth of industrial production in the country fell to 5.3 per cent in November this fiscal from 15.8 per cent in last fiscal led by a huge decline in manufacturing output.

Growth in manufacturing sector dipped to 5.4 per cent in November 2007 from 17.2 per cent in November 2006.

Electricity generation grew by a mere 5.8 per cent against 8.7 per cent in the comparative previous period. Mining was down at 3.5 per cent against 8.8 per cent last fiscal.
Cement production in November rose 4.5 per cent from a year earlier after growth of 7 per cent in October. ACC Ltd., India's largest cement company, saw sales decline by 6 per cent last month.


During the first half of the current fiscal (April-November 2007-08), the index of industrial production settled at a single digit of 9.2 per cent against 10.9 per cent in the same period last year.

All the segment indices were in the single digit for the April-November period.

The November figure is also the slowest in 13 months, giving hope that the central bank may soon end more than three years of interest rate increases.

The Reserve Bank of India has raised interest rates nine times since 2004 and increased cash reserve requirements for commercial banks in the past year to contain inflation below its target of 5 per cent.

While inflation stayed at about 3.5 per cent in the week ended December 29, down from 6.7 per cent at the start of 2007, this has been more due to steady prices of fuel. The government refrained from raising fuel costs even as crude oil prices rose to a record over $100 a barrel.

India, Asia's third-largest economy, expanded 8.9 per cent in the three months to September 30 from a year earlier, the slowest pace in three quarters. Growth is expected to ease further to 8.4 per cent in 2008 from 9 per cent last year and 9.4 per cent in 2006, according to a World Bank report.