The Hindu Business Line : Small cities seen disfavouring NSE

SEVERAL small cities have registered a dip in turnover of National Stock Exchange (NSE). Among the metros, Delhi and Chennai have registered a lower share in turnover in December compared to same period last year .

Mumbai's share of NSE turnover has increased to 44.88 per cent from the 40.01 per cent registered for the last financial year. Delhi slipped from 18.38 per cent to 15.37 per cent and Chennai moved southwards to 2.83 per cent from 3.59 per cent. The rise in Mumbai's share is primarily attributed to the heightened activity of institutional traders.

Mr M.P. Bubna, Director, M. Prasad & Co. Ltd, a Kolkata-based stockbroker, said that now that the Kolkata stock exchange is non-functional, most volumes are driven towards NSE and BSE. Kolkata, however, has registered only a marginal increase in turnover. "Bombay Stock Exchange gives more facility to brokers like margining system, exposures allowed, number of scrips traded etc. Though NSE had an initial surge in volumes, this may be coming down now because of these facilities. Outstation brokers are establishing a comfort level with BSE," he said.

NSE is viewed as a broker-unfriendly exchange. ``Despite the fact that NSE is far ahead in terms of systemic developments, as a broker you are heard by only the BSE. NSE is non-broker driven and brokers have no say in any policies adopted by the exchange. This makes the community uncomfortable,'' Mr Abhimanyu Sindhu, Director, Indus Porfolio, said.

Most regional brokers have now established offices in Mumbai and order logging is done through centralised servers, largely located in Mumbai. This is a possible reason for inflation in Mumbai's share of turnover at the cost of other centres.

The loss in share in smaller towns is despite the large number of VSAT terminals installed. The share of towns in Andhra Pradesh, for example, has decreased to 2.46 per cent from 3.2 per cent despite the fact that there are 225 VSATs installed. Uttar Pradesh has larger number of VSAT terminals compared to an active stock trading State like Gujarat despite which cities like Kanpur have registered dip in their share of NSE turnover.

Mr P.B. Subramaniyan, Director, Apollo Sindhoori Capital, Chennai, said that the Chennai's share of NSE turnover is bound to increase in future. NSE volume and value will rise to about six times last year's numbers, he predicts. "Retail clients are coming into NSE now. Our registrations are rising to about 130, from past levels of around 20 registrations a day," he said.