Coimbatore, Jan. 5
THE Coimbatore Stock Exchange (CSX) is pinning hopes on a series of measures for a revival in its fortune, as it has been virtually dormant for the past five years.
The CSX Members' Welfare Association had consolidated its presence on the Board of Directors of the CSX with its two nominees getting elected at the latest annual general meeting.
The members at the AGM held on December 29, 2004, had voted against the appointment of the Executive Director of the CSX, which, however, is expected to face some resistance, since the appointment had been cleared by SEBI.
Speaking to Business Line, Mr S. A. Thooyamani, President, CSX Members' Welfare Association, its Secretary, Mr R.Muralidharan, and the Treasurer, Mr R. Sriram, pointed out that that the election of two members of the association - Mr S. Anantharaman and Mr Ashok Lunia - has strengthened the presence of the association on the board with four of its members being on the board or council. This has provided the association with an opportunity to articulate the views of the members in the CSX council more forcefully.
They conceded that the additional strength the association has gained on the exchange board did not mean that they have gained any upper hand in managing the affairs of the council, which has 12 members six elected by the CSX member-brokers and an equal number of SEBI-appointed/nominated members, including the local Registrar of Companies (RoC).
Mr Thooyamani, who is also a director of CSX, said the future of the exchange was at cross roads, since it has been virtually defunct for the past five years. It was largely the rental income of about Rs 11 lakh per month that has kept it going. Last year, CSX reported a deficit of Rs 9.12 lakh with expenditure overshooting income.
The association leaders said that the financial restructuring of the exchange was a top priority for them. One way of augmenting resources was by finding good tenants for the CSX building. Though the building has about 2 lakh square feet built-up area, nearly half of it was lying vacant; there was a good chance of getting corporate clients, as the building was located in a prime area on the Coimbatore-Tiruchi road. The association has sounded some top names, including TCS, Wipro and the Kotak group regarding the availability of space.
A more important event that would help revive the fortunes of the exchange is the establishment of IndoNext, which is likely to be launched as a separate segment by the BSE in the near future and some good quality stocks listed in the B1/B2 group are likely to be moved to IndoNext.
They said that such a move would provide a lifeline to the smaller Regional Stock Exchanges (RSEs) that have virtually been wiped out with the advent of online trading and the formation of the NSE. The RSEs should have a BSE membership to participate initially in trading and they should sign agreements with BSE to participate in IndoNext.
Mr Thooyamani pointed out that some of the reputed Coimbatore-based companies such as the LMW, Pricol, Elgi Equipments, Bannari Amman Sugars, Shanthi Gears and LGB had a low equity base. If trading in these stocks is shifted to IndoNext by the BSE, it would provide an opportunity for the regional exchanges like CSX to benefit. It will also make efforts to get an NSE card to enable CSX members to trade through the NSE terminals. Apart from providing the members a source of income, it would also help the CSX to generate some revenue.