The Hindu Business Line : Markets under close watch: Chidambaram

IN the backdrop of liquidity-driven steep rally in the capital market, the Finance Minister, Mr P. Chidambaram, on Tuesday assured Rajya Sabha that the price movements in the bourses were being closely monitored.

He also said 731 foreign institutional investors (FIIs) have registered with the Securities and Exchange Board of India till June as against 685 as on March 31. The total number of FIIs registered with SEBI as on March 31, 2004 stood at 540, he said.

Mr Chidambaram said the positive FII inflows in the recent past could be attributed to continued economic reforms, strong economic fundamentals, improved prudential and regulatory standards and attractive valuation of companies.

Meanwhile, the Finance Minister said in a written reply to a question that "it is the intention of both the Government and the SEBI to promote a fair and transparent capital market and market integrity".

To curb malpractices in trading and to ensure integrity of markets, he said SEBI had put in place a mechanism comprising monitoring and surveillance of trading including through the online monitoring system of stock watch by exchanges.

He said a regular system of weekly surveillance meetings with major stock exchanges - Bombay Stock Exchange and the National Stock Exchange - and the depositories had been put in place.

This has been done to provide a confidential platform for exchange of views on areas of emerging concerns, specific abnormalities and to consider pre-emptive actions and discuss general surveillance issues, Mr Chidambaram said.

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