The Hindu Business Line : Prime Securities mark-to-market loss at Rs 23 cr

Mumbai, March 27 The listed broking firm Prime Securities on Thursday said that it has provisioned Rs 23 crore for mark-to-market liabilities on account of its investments in securities.

In a notice to stock exchanges, the company said, “In keeping with established accounting norms, the entire investment will be mark-to-market at year end at the lower of market value or cost. Consequently, the estimated provision for depletion in value of the securities as on date would be approximately Rs 23 crore.” The company also reported a loss of Rs 3 crore in future and options trading during the current financial year.

In response to rumours of the company suffering huge looses, Prime Securities clarified that “there is no outstanding futures and options position as on date.” The company officials were not available for comments.

Share price

Prime Securities closed five per cent down at Rs 87.95. The broking firm’s share price deteriorated 52.11 per cent over the last one month and 18.45 per cent over the last one week.

Further, the company said that post the write down of Rs 23 crore, the profit before tax for the year is expected to be around Rs 27 crore.

It has further clarified that there is no outstanding futures & options position as on date.

With Prime Securities revealing its losses, now the focus is going to be on other broking firms who could have suffered losses since January 2008, when the market meltdown started and several traders who had leveraged positions suffered losses on account of their exposure in the F&O trade.

Other firms

The other listed broking firms include Edelweiss Capital, Motilal Oswal, India Infoline, Religare Enterprises, Emkay Shares and Stock Brokers, JRG Securiteis, Almondz Global Securities, Networth Stockbroking, Indiabulls Financial Services, JM Financials, Apollo Sindhoori Capital, and Arihant Capital Markets.

Many banks too have broking subsidiaries like SBI, ICICI Bank, Kotak Mahindra Bank and IDBI.

Meanwhile, a Reuter report said Geojit Financial Services Ltd, another listed broking firm, has not incurred any losses in the futures and options segment as it does not take investment positions on a proprietary basis. “We have zero proprietary business and so there is no question of depletion in value of securities,” Managing Director, Mr C.J. George, told Reuters from Kochi. “We are only into commission business.”

However, the firm had certain payment issues with clients as the value of their securities has depleted due to the correction in the equity market, Mr George said.

More Stories on : Stock Markets | Financial Services

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page