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April 4, 2001
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Money > Business Headlines > Report April 4, 2001 |
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Badla trades down 80 per cent at CSEKausik Datta & Aniek Paul The payment crisis, which brought the Calcutta Stock Exchange (CSE) to its knees, has cast a long shadow on the bourse with badla trades declining over the past four weeks. The volume of badla trading has shrunk by over 80 per cent from Rs 6.75 billion on March 8, 2001, the day the bourse was first hit by a pay-in shortfall of over Rs 1 billion, to Rs 1.26 billion on March 29, when the CSE managed to get out of the crisis. In the meantime, the exchange was compelled to draw funds from the defaulting brokers' margin accounts, enchash their fixed deposits, draw money from the settlement guarantee fund (SGF) and even general reserves. Top CSE sources said the erosion of SGF was partially responsible for the reduction in badla trades. "SGF could be seen as a factor related to supply of funds in the badla market. But the problem of the hour is the demand for funds, which is unlikely to grow in the short run due to weakness in the market sentiments," they added. Lyons Range sources said the huge loss of funds in the unofficial badla market was mainly responsible for decline in the official badla trading as the same set of players operate in the two market segments. In addition, cessation of trading of the three major defaulters, who used to have huge exposure in badla market, pushed the volume in badla trading down further. They added the badla trades might go down further unless the SGF was replenished by injection of fresh funds.
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