Cse & #39;S 2001-02 Draft Budget Hints At Deficit

The Calcutta Stock Exchange's (CSE) draft 2001-02 budget scheduled to be tabled at the management sub-committee meeting slated for the first week of June, indicates possibility of the bourse ending the year with a marginal deficit.

CSE executive director Tapas Datta said: "The key assumption in our draft budget for the current year is the bourse's turnover after badla is banned and rolling settlement introduced for all the key stocks. If the changes affect business at CSE worse than we expect, we would have a deficit, but in a better scenario, we may just manage to scrape through without incurring any loss. It's a borderline case by realisitic estimates."

Datta went on to explain that the focus of the budget would be on cost-control, though admitting that best part of the exchange's costs are fixed by nature.

"A prima facie viability study of a number of austerity measures has been made, and we would be discussing these in the meeting," he added.

Among other key issues to be discussed, is the bourse's gameplan for addressing the post-July 2 scenario.

In the last board meeting, senior brokers had suggested that the exchange seek membership of a larger bourse like Bombay Stock Exchange or National Stock Exchange for the derivatives segment.

Datta said, the matter would be discussed at the forthcoming meeting, adding that there were three available options: first, having its own platform, second, using NSE or BSE's platform, and third, having none at all.

"We cannot afford to have none, and we cannot pay for setting up of our own derivatives platform. Besides, the Securities and Exchange Board of India (Sebi) may not allow us to have our independent derivatives segment. By deductive reasoning, it appears, seeking membership of a larger bourse is the only option open to us," Datta said.

Datta was in Mumbai for a couple of days last week to meet the CSE management sub-committee chairman Dipankar Basu.

The bourse's management sub-committee meeting in June would be followed by a full-committee meeting as well, Datta said.

The exchange is still awaiting a Sebi clarification on the issue of carry forward of positions between July 2 and September 3.

Datta clearly said today, if the market regulator mandates that it would be possible only through carry forward platform for the rolling segment, the bourse would ask its members to liquidate positions by July 2.