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Brokers should reaffirm themselves, says FM

Federal Finance Minister Palaniappan Chidambaram on Saturday called upon the broking-community to reaffirm themselves with the Charter of Objectives of 1887, Bombay Stock Exchange, which provides safeguards in stocks dealing, harmonious trading for investors, promotes well-regulated markets, and provides resources mobilisation for individual investors.

Inaugurating the BOLT-Net countrywide system at the BSE on Saturday afternoon, he said that the stock exchange authorities will have to adopt new approach as it will now have a large investors base. "Now a farmer or an ex-serviceman may trade in the BSE and it will not be limited to local brokers," the finance minister said, and added that a total new approach needs to be developed to tackle countrywide investor base.

Commenting on the fundamentals of the Indian economy, Chidambaram said that the fundamentals are very strong and industrial and fertiliser production have reached record levels. The wholesale index is going to fall to a record low level of 3.75 per cent for the week ended August 15, he said.

Without referring to the securities scam of 1992, Chidambaram said that it is the duty of the brokers and stock exchange authorities to see that the market does not collapse.

He said that the finance ministry will not approve of any speculation or volatility in the market. Regulatory bodies like the Securities and Exchanges Board of India should ensure that the trading is normal and harmonious. He further said that presently, the stock market is on a roller-coaster ride and the index shoots up and comes down often, adding that this has to be arrested.

He opined that what the market needs is major institutional players to compete with the foreign institutional players.

Chidambaram said that the interest rate was going down, which is healthy for the economy. During April-May this year, industrial production shot up by 8.1 per cent, while fertiliser production reached a record high.

Currently the Bombay On-Line Trading system will operate in 99 cities with over 250 terminals, and in the next year, it will expand to over 250 cities.

Business volumes will also increase in the country's premier exchange with the BOLT expansion.

UNI