Institutional Trading Set For A Boost On Cse

The financial institutions' trading on the Calcutta Stock Exchange (CSE) is expected to get a big boost with two new custodians _ IIT Corporate Services and HDFC Bank _ setting up shop here.

Upbeat exchange authorities expect that three custodians (the existing Stock Holding Corporation of India Ltd and the two new entrants) will woo more to set up shop here which would lead to an increase in the financial institutions' trades.

They said HSBC has already expressed interest to set up custodial services in Calcutta. ICICI, they expect, may also start up custodial operations shortly.

"The presence of only one custodian has created a Catch 22 situation. While financial institutions keep away from the exchange saying that the bourse has not enough custodians through which they can trade and custodians corroborate their decision of not setting up office in Calcutta as the FIs trade is very low. The impasse seems to be over now," a top exchange official said. Statistics reveal that of Rs 446 crore worth of badla trading on the bourse in the settlement period started May 4, custodians trading was only Rs 1 crore.

 

Ironically, the exchange failed to woo custodians to the city despite it's effort some two years ago. Now, that the custodians themselves are expressing interest proves that the country's third largest exchange has been regaining its lost importance in the national capital markets arena.

Industry sources attributed the exchange's effort to become a leader in the eastern region by attracting some regional bourses under its umbrella to the custodians growing interest to do business in this part of the country.