Sensex closes lower as funds stay way
Mumbai: After three straight days of rises, the Bombay Stock Exchange (BSE) Sensex closed at 4,885.60, down 26.51 points from its Wednesday close. The National Stock Exchange (NSE) S&P CNX Nifty finished at 1,516.80, down 9.25 points from its Wednesday close.

The earlier rise was on the assumption that the FIIs, after being net sellers in June, would return to the market in anticipation of good earnings announcements, particularly from information technology companies. Marketmen are of the opinion that a major correction or re-rating can be expected only after corporate results are announced, in anticipation of which, operators are building position.

The market is looking forward to the April-June corporate earnings announcements. If there is a good performance across sectors, the market is expected to rise further. But if the good performance is limited to just software stocks, the market would continue to remain lackluster.

Of the 30 Sensex stocks, 12 ended above their Wednesday closes, while 18 ended lower. Of the 50 Nifty stocks, 19 ended higher and 30 ended lower, while one stock remained unchanged.

Falls were mainly seen in stocks that had ended higher. Among index components, falls were sharpest in shares of ICICI, which had risen sharply in recent sessions on fund buying. ICICI closed 5.93 per cent lower at Rs 142.80.

Also sharply down was Hindustan Lever, Grasim Industries, Satyam Computer Services, Gujarat Ambuja Cements and Larsen & Toubro, among others.

Reliance Industries was the most traded stock with over 29 million shares changing hands on the BSE and the NSE. The stock closed 3.28 per cent higher on the BSE at 3.28 per cent.
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DSP Merrill Lynch named best investment bank
Mumbai: Finance Asia, a leading Asian business magazine, has rated DSP Merrill Lynch, recently renamed as Merill Lynch India, as the best domestic investment bank in India for the year 1999-2000. According to the magazine, the firm handled the bulk of the cross border capital raising in the country.

These transactions included the first American depositary shares issue for an Indian banking institution (ICICI) and the first Indian Internet firm issue (the Satyam Infoway American depositary receipt). It also played a role in domestic equity issues, managing 11 equity issues raising $609 million.

Besides topping the list in equity origination, the firm also became the leading debt origination franchise. During the year it managed 78 debt issues over $4.1 billion from the domestic debt capital markets.
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Sebi tightens screws on accounting norms
Mumbai: In its attempt to make companies more accountable to their shareholders, the Securities and Exchanges Board of India (Sebi) has made it mandatory for listed companies to get a limited review of their half-yearly accounts by the auditors or chartered accountants. Quarterly and half-yearly accounts disclosed currently are unaudited and the aim is to bring these as close to an audited account structure.

Further, if there is a difference of more than 20 per cent with respect to any item, between the sum total of the preceding two quarters and the half-yearly limited review, then the reasons for this difference would have to be explained to stock exchanges.
Sebi has directed all stock exchanges to amend their listing agreements to incorporate this change and has asked all companies to comply with immediate effect.

Auditors would have to state a review of interim financial information consists principally of applying analytical procedures for financial data and making inquires of persons responsible for financial and accounting matters.

It is substantially less in scope than an audit conducted in accordance with the generally accepted auditing standards.
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Sebi sets up committee to review accounting norms for dotcoms
Mumbai: The Securities and Exchanges Board of India (Sebi) has set up a sub-committee, under the chairmanship of Mr. Y. H. Malegam, to look into three broad accounting issues for dotcoms. These are definition of revenue, revenue recognition and prepaid and intangible assets versus period costs.

The sub-committee would look into the disclosure requirements for public offerings by dotcoms, accounting standards for dotcom companies, and the continuing disclosure requirements for them. The norms would be finalised after an extensive public debate.

Under definition of revenue, the issues to be discussed would be whether to present grossed-up revenues and cost of sales, or merely report the net profit as revenues, similar to a commission.

The sub-committee would also discuss the widely prevalent practice of barter transactions for advertising on each other’s websites and the diversity in practice in accounting for these transactions.

The issue of how internet companies conclude that a free or heavily discounted product provided in introductory offers, should be accounted for a sale at full price, recognising the marketing expense for the discount.

Under revenue recognition, the committee would discuss issues pertaining to auction sites which usually charging both listing and transaction-based fees.

The treatment to given to the revenue arising out of providing customers with services that include access to a website, maintenance of a website or publication of certain information on a website for a period of time, would also be discussed.
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