BSE proposes upto 49% stake in Stock Exchanges by Foreign Exchanges

(Disclosure:I am market making in the shares of BSE)

The government should allow leading global bourses to hold up to 49% stake in Indian stock exchanges to enhance the competitiveness of domestic capital markets, BSE has said.

The current policy permits foreign bourses to own a maximum of 5% stake in Indian exchanges. “The current policy on ownership of stock exchanges may be amended to allow for an investment stake of at least 15% (or preferably even 26-49%) for foreign exchanges of international repute, in line with the regulations for Indian exchanges,” BSE said.

The recommendation has been made by BSE in a document to the ministry of finance ahead of the budget in July. According to the leading stock exchange, while the current policy does not “preclude a strategic partnership between an Indian and a foreign exchange, the 5% cap does make such a partnership difficult”.

It added: “Without the potential for a meaningful investment stake of at least 15% (or preferably even 26-49%) potential foreign partners are reluctant to engage fully because there is inadequate ‘skin in the game.’” BSE has said the move will allow domestic stock exchanges the flexibility to form deeper partnerships with global bourses, enhance global competitiveness, help attract more foreign funds, facilitate and accelerate adoption of best-in- class technology. “The foreign exchanges can only afford to invest their time and resources if their contribution is rewarded commensurately,” BSE said, adding that a larger ownership stake is one way to ensure their engagement.-from Mint

Currently, both Deutsche Bourse AG and Singapore Exchange Ltd. own around 4.92% each in BSE

Are you an investment virgin?

It’s easy to be a long-term investor during a bull market. Everyone’s making money and it feels like you can do no wrong.  It’s when things don’t go as planned that this group loses control.

Bernstein says as much in the book when he observes, “If you began your investing journey after 2009 or haven’t yet started, then you’re an investment virgin.”-from WealthOfCommonSense

Why did the £2.8 Billion CDC Group invest in Ratnakar Bank?

(Disclosure:I am market making in the shares of Ratnakar Bank)

What were the things CDC was looking at when it picked up 4.8% stake in Ratnakar Bank in April?

We didn’t come into Ratnakar Bank for the momentum play, something which a foreign institutional investor would do. We are a DFI and not a pre-IPO investor. Ratnakar is deeply focused on financial inclusion, agri-lending and loans to the small and medium scale sector. These are high impact areas that create jobs. We are now working closely with the bank in all these areas.-from DNA

Ratnakar Bank plans upto 250 Million $ IPO in Q1 2015

(Disclosure:I am market making in Ratnakar Bank)

Ratnakar Bank Ltd plans to launch an initial public offering of shares worth up to $250 million in the first quarter of next year, three sources directly involved in the process said on Tuesday.

Ratnakar Bank will issue new shares and some of the private equity investors will pare their holding in the share sale, said the sources, who declined to be named as they were not authorised to speak to the media ahead of a public announcement.

A Ratnakar Bank spokeswoman did not immediately comment.

The lender will hire at least four banks to manage the public offering within a week, two of the sources said. At least 10 banks are in the race to win the mandate for the IPO process, they said.-from BS