August 2009 - Posts - Initial Private Opinion

August 2009 - Posts

Insurance - some honest confessions

Posted by Sandeep Parekh at 
It was refreshing to see some honest talk by an insider about insurance policies in today's WSJ. I have often blogged about the extortionist commissions (upto 40% according to this piece - anything in excess of 2.5% is excessive in my opinion, particularly if it is a mutual fund being sold in the garb of an insurance policy) and widespread mis-selling...

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ICICI claims to be an Indian bank

Posted by Sandeep Parekh at 
My post of last week on ADR/GDRs is on the issue of whether they should be treated as voting shares - which they should be as they do in fact carry voting rights. Today ICICI is claiming to be an Indian bank despite 81% foreign ownership. According to ET : NEW DELHI: ICICI Bank has asked the government not to take into account overseas securities like...

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Are American Depository Receipts shares?

Posted by Sandeep Parekh at 
Today's Economic Times reports RBI is considering American Depository Receipts (ADRs) as 'quasi equity' not carrying voting rights and therefore not be considered as FDI. This view perpetuates the deeply flawed view taken by SEBI as well, that ADRs/GDRs do not carry voting rights 'till converted into shares'. In fact, ADRs and GDRs...

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Bombay Stock Exchange - outsourcing the exchange

Posted by Sandeep Parekh at 
I don't get it. The BSE is outsourcing its exchange and clearing system to another exchange for currency and interest rate futures. And that too in favour of a new exchange which has no experience or brand. BSE has also invested 15% in this new exchange. The only USP of this exchange is that it has institutional shareholders who could bring in business...

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Is the US SEC becoming a bit too fat?

Posted by Sandeep Parekh at 
The American securities regulator has sought $1.2 billion for its budget next year (a 20% increase in the budget). That is a staggering amount compared to the $15 million odd India's SEBI spends each year. Clearly, with the beating the SEC's reputation has taken over the past nearly decade long period, the extra 20% the SEC is seeking may be...

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Is RBI running an illegal exchange?

Posted by Sandeep Parekh at 
In a somewhat cryptic Board agenda note of SEBI, the securities regulator seems to be suggesting that the RBI is running an illegal exchange under the Securities Contracts (Regulation) Act 1956" 4.6 The stock exchange under the law is a body corporate under the Companies Act for the purpose of assisting, regulating or controlling business of buying...

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