Close on the heels of meeting the board of the Securities & Exchange Board of India (Sebi), the finance minister held an informal meeting with leading domestic and foreign institutional investors in Mumbai, as part of his day-long trip to the country?s financial capital.
The finance minister also met the senior officials of Sebi and took stock of the progress of capital market reforms and the road ahead. He also met the Life Insurance Corporation (LIC) board later in the day, and urged the insurance behemoth to increase market share in the wake of competition.
The agenda for the institutional investors? meeting, as disclosed by a leading overseas investor, was to get feedback from the institutions regarding the market scenario and the fundamentals. He also revealed that discussions on the Stock Lending and Borrowing mechanism was one of the important topics to be discussed.
Institutional players, especially those overseas, had made representations to Sebi recommending changes in the duration, from the seven-day time frame for SLB, to a longer duration and for relaxing the margin requirements which could spur the scheme that has literally come to a standstill after it was launched in April 2008.
The issue of relaxing norms for participatory notes (PNs) was also taken up at the meeting. However, no promises or commitments were made by the minister. ?The FM was in a listening mode. He was gauging the mood of global investors in the current scenario. During the meeting, he took deep interest in understanding the challenges faced by the institutional investors,? said Uday Kotak, vice-chairman and managing director of Kotak Mahindra Bank, after attending the meeting.
Some of the overseas investors were pleased with the outcome of the meeting as they were not expecting much, but only wanted the minister to hear them out. ?We do not expect sweeping reforms in the market at the moment,? said a member of the FII group.
Achal Kumar Gupta, MD, SBI MF, said, ?It was a very positive meeting and we could all present our views on various topics?. The issues of P-Notes and SLB did come up in the meeting.
Among other attendees were, UK Sinha of UTI MF, Shikha Sharma of ICICI Prudential Life, Vikrant Gugnani of Reliance MF, Arindam Ghosh of Mirae Asset Management and Jai Rajpal of Lehman Brothers. Chidambaram also reportedly addressed the board members of Specified Undertaking of UTI. He reiterated that SUUTI will wind up its operations on Mar 31.
He said SUUTI has already redeemed Rs 21,000 crore of funds as on March 2007, and another Rs 6800 crore under the US-64 scheme till now in the current financial year. Bonds worth Rs 14,500 crore were issued to US-64 investors, and also under various assured returns scheme by erstwhile UTI.