Oriflame India Opens Outlet In Bangalore

Oriflame India Private Ltd, the Indian venture of the Swedish cosmetics company, yesterday launched its products in the south with the opening of a service centre in Bangalore. Oriflame products will be marketed in Bangalore exclusively through its direct selling system.

Ministry, Sebi in talks over market revival

The finance ministry is in talks with regulatory authorities, including the Securities and Exchange Board of India (Sebi), on a framework for allowing insurance companies, provident funds and pension funds to invest in the stockmarkets to boost the sagging market scenario.

The ministry is also in an advanced stage of discussions with regulators on allowing companies to buy back their shares with certain riders. Some crucial tax sops are also being discussed.

According to sources, the ministry is in touch with Sebi on the issue of pension and provident funds investing in the market.

The ministrys move has been endorsed by the regulator as a step which has the potential of substantially reviving the markets.

The talks between Sebi, the Reserve Bank of India (RBI) and the finance ministry has reached a crucial juncture, more so since the ministry is expected to weave these suggestions into the package, which it is expected to announce soon.

It is felt in regulatory circles that even if provident funds and pension funds are allowed to invest either in the primary or the secondary market, it will have a major impact on the market sentiment.

The supply of long-term funds would ultimately ensure that the market looks up, a regulatory official said yesterday.

In fact, a number of the proposals were discussed when finance minister P Chidambaram visited the Sebi office in Mumbai recently.

The markets watchdog had made a detailed presentation to the ministry on the state of the capital markets and the measures required to pep it up.

Sources said the tax proposals are related to the revival of the 80M clause to boost investments in mutual funds, and the 80CC relief on investments in the primary market issues.

The discussions between the finance ministry and the regulatory authorities, officials said, were aimed at broadening the ambit of investments by domestic financial institutions and causing a spin-off effect into the stock markets.

The other major proposal, which were being discussed, relates to the buy-back of shares by companies.

The regulatory authorities want this allowed mainly because of the positive impact it will have on the market. This can be allowed with adequate precautions and subject to certain conditions.

A limit up to which such buy-back can be permitted can also be woven into the regulations, a regulatory official said.

On the foreign institutional investor (FII) front, the markets regulator has already taken a proactive stance and is hosting a major summit in the middle of this month to iron out the thorny issues relating to trading and settlement problems being faced by the FIIs. The regulator is also looking at easing the registration procedure for FIIs.

The investments by the foreign institutional investors in the domestic markets have come down alarmingly in the recent past.