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Our Bureau

Ahmedabad, Nov. 10 In order to restore market confidence, the Association of National Exchanges Members of India (ANMI) on Monday urged the Government to set up a Sovereign Fund to support the equity of well-managed listed companies. It also asked the Government to channelise part of long-term savings, such as provident and pension funds, into the stock market to increase liquidity and boost the current market sentiment for the orderly growth of capital market.

Addressing a press conference here, the President of ANMI, Mr Vijay Murmurwala, said the Government should also abolish market operational “irritants” such as imposition of securities transaction tax (STT), and rationalise margin imposition and cross-margining across all segments. Besides, the Government should also simplify stamp duty imposition and collection mechanisms.

He said the STT and associated transaction charges are the highest in the world which, if not abolished or cut substantially, could lead to a shifting of volumes to foreign stock exchanges such as in Singapore. Its abolition would increase liquidity in the market. The Government has already deferred commodity trading tax and this was a welcome step, he said.

The other recommendations made by ANMI included re-assessment of interest rates on falling inflation, quickening the pace of Government spending, placing transparent regulatory and valuation mechanism for mutual funds and encouragement of long-term investments through stock markets by investors and institutions, he said.

Replying to questions, Mr Murmurwala said the FIIs have withdrawn about Rs 50,000 crore from Indian stock market this year.

More than Rs 10,000 crore have been withdrawn during the last few weeks alone. This has made the dollar costlier and rupee cheaper.

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