S & P May Select Bse-500 Scrips

Global credit rating major Standard & Poor's (S&P) is in talks with the Bombay Stock Exchange for a series of services from picking out the stocks which would comprise the BSE-500 index to credit rating of brokers, which has been planned by the exchange.

Once things take a concrete shape, a tripartite agreement is expected to be signed between S&P, Crisil and the BSE, said the bourse president M G Damani, while addressing newspersons after a conference held here yesterday.

"The BSE is evaluating a proposal for a credit rating agency which would give credit rating to broking houses. As the BOLT network expands, investors should know the standing of the broker which has been assessed independently by a rating agency," Damani said.

The brokers can use their ratings if they wanted their firms to go public, said Damani. It will not be mandatory for brokers to have themselves rated.

As the concept of ratings is picking up in the country, Damani feels that once BSE enters into an agreement, other exchanges might too might follow suit.

As regards the bourse's banking plans, the field work for the setting up a co-operative society has already been prepared.

It is not clear if the Bombay Brokers' Forum might be changed into the co-operative society which, in collaboration with the prospective bank, will act as a bank for its members.

BSE currently has 120 corporate entities, and more are expected to come in if the one-time exemption of capital gains tax for corporatisation, announced in this year's budget, gets implemented.

Damani, who was on a two-day trip to Calcutta, also met the Calcutta Stock Exchange authorities to explain to them the entire costing of bringing the BOLT network to the city.

The agreement with CSE is expected to be signed sometime in May, he said. CSE has already cleared the tieup with BOLT.