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Brokers take stock of cyber-lawless land, gear up for New Millennium market

Syed Firdaus Ashraf in Bombay

Ask Bombay stockbroker Ajay Punjabi how he plans to trade in shares in the next millennium. ''Through the Internet,'' pat comes the reply.

Punjabi is the chief retailer at Motilal Oswal, a Bombay-based broking firm. "Globally, technical changes are taking place in every business. Sooner rather than later, we think stock brokering through the Internet will be a reality in India as it is in the US," he holds forth.

Efforts in that direction are already on, says Punjabi, giving a hint of the silent revolution at his firm. In future, all that the firm's clients -- the investors -- need to do to buy/sell shares is log into www.motilaloswal.com. The latest stocks will be on display. The investor can take his/her pick, then e-mail his order. If that is not possible, a telephone call will do, thank you.

Motilal Oswal is in the company of other Indian brokerages on the Net such as KBS Capital Management that are one click away from electronic broking.

Tushar Shah, managing director of KBS, says, "We were the first people to take advantage of the Bombay Online Trading or BOLT system. We will now take advantage of the Internet for the benefit of our clients."

It is not as if the entire stockbroker community has taken a fancy to hi-tech methods. Shah recalls the time when his peers scoffed at his forward-looking moves. "When we joined BOLT in 1994, other brokers said they don't have to follow suit because they would squeeze all the information from us by merely buzzing us. The same guys joined BOLT later."

Sure enough, when KBS launched its Website (www.kbscapital.com) recently, Shah was swamped with queries about e-broking. In just a couple of days, the site recorded 7,000-odd hits from across the world.

Raju Mewawalla, vice-president, network operations, KBS, says that kind of response was only to be expected. "The Internet is the fastest medium to get stock quotes. No other medium can beat the Net in speedy dissemination of information."

He also explains why the Net is bound to get a look-in in the Indian stock market and related firms. "Today, investors have to remain glued to television sets to catch a glimpse of share prices on the fast-rolling ticker scroll. Or they have to call brokerages for the latest share prices. The television quotes are not live, there are at least ten minutes behind the time of the actual trading. Once the company's name disappears from the television screen, the investors have to wait for another ten minutes."

Telephones are not a big help either, what with steep long-distance charges and high traffic. Use of the Internet, Mewawalla says, will cut down on telephone charges. "We expect our business to grow by 200 per cent as more and more people will log in to take advantage of the latest quotes."

Whether or not Non-Resident Indians can trade on Indian sites remains a grey area, though Punjabi feels the NRIs can, through their Non-Resident External account.

"The only problem is there are no regular cyber laws in India. Electronic documents are not accepted in our country. The relevant bill has to be passed by Parliament," he says.

Efforts are underway to streamline methods and processes to facilitate Net trading in India. KBS plans to create its customers's bank accounts on the Net. The moment an investor executes an order to buy/sell stock, his/her electronic bank account would get debited/credited accordingly. Ditto for the firm. Transactions would be completed in a matter of minutes, if not seconds, says Mewawalla.

So much for the plans, proposals and visions. Shah and Punjabi are keeping their fingertips crossed. Since e-broking is still not legal, the wait is on for laws. Once they get enacted, the fingertips will land on keyboards and mouses -- the brokers hope e-broking will click as smoothly as e-tools.

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