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To: Mohan Marette who wrote (5414)	8/2/1999 8:58:00 AM
From: Mohan Marette	Respond to of 12475

VSNL to offer Net through Cable, cuts night rates. vsnl.com Date: 8/2/99 9:51:07 AM (Infoline) VSNL is in talks with major cable operators in Mumbai and will offer Internet connections to homes and offices through the cable network. VSNL is talking to Siti Cable, InCablenet and Hathway Cable & Datacom with a view to expand its base of Internet services. The tie-up will be based purely on a revenue-sharing agreement and no joint venture is contemplated for the same. It is expected that in a year's time the infrastructure will be in place to offer the service. Instead of the present dial-up system the subscribers will be permanently connected to VSNL. This will ensure that the trouble that the subscriber has in connecting to VSNL and the frequent disruption of services will be a thing of past. Besides being cheaper it will also be fast as compared to the existing system. Meanwhile VSNL has decided to slash the Internet rates by 50% between 11 p.m. and 8 a.m. This will be applicable to new as well as existing subscribers. Private ISP operators like Bharati-BT Internet was the first to offer discounted rates.

To: Mohan Marette who wrote (5414)	8/2/1999 9:16:00 AM
From: Mohan Marette	Read Replies (2) \| Respond to of 12475

How to use Badla to leverage your returns in the Stock Market Source : MakroIndia Jul 29, 1999, 6:04:09 PM When a bull market is gaining hold and when shares prices are expected to reach dizzy heights, the one common refrain among the small investor is the lack of alternatives for multiplying returns through leveraging one's investment. The question often arises when one has the capacity and standing to mobilize funds for investing in the market and one is looking for a systematic investment avenue. We have heard of "options", "futures", and even more exotic "derivatives" all of which help in increasing ones returns many times over - if used correctly. In as much as the sophisticated derivatives which are in existence abroad developed from the commodity markets there - in India, sophisticated financing techniques existed in our commodity markets for centuries long before the concept of options came into existence abroad. With the beginning of the stock markets many of these techniques which closely approximated options and futures came into our financial markets, and, even more exotic "derivatives" thrived till they were banned in the '60s. One relic from those times still exists - the much maligned but still useful - badla financing. Badla can be useful for an active investor if he wishes to leverage on one's investments thereby multiplying his returns. The concept of badla Badla, in common parlance the Carry-Forward system, means something in return. The badla system of transactions has been in practice for several decades in the Stock Exchange, Mumbai. The badla system serves an important need of the stock market: It is a quasi-hedging mechanism: If an investor feels that the price of a particular share is expected to go up or down, without giving or taking the delivery he can participate in the possible fluctuation of the share. Financing in Badla, in effect has two aspects to it namely the 'seedha badla ' or 'Vyaj badla- where the financiers participate and 'undha badla' where the stock lenders participate. What is Badla? In the badla system a position is carried forward, be it short sale or long purchase. In the event of a long purchase, the market player may want to carry forward the transaction to the next settlement cycle and for doing this he has to compensate the other party in the contract The 'seedha badla' financier enters into the system to lend money to the market player for a return. This is measured as interest on the funds made available for one settlement cycle, i.e. one week or a longer period in case of book closure badla system. Similarly 'undha badla' or contango charges are returns paid by stock borrower to stock lender. In a short sale, when the market player wants to carry forward the transaction to the next settlement cycle, he has to borrow the stocks to compensate the other party in the contract. The charge paid on the borrowed stock is called contango charges. How is badla done? On every Saturday in the Stock Exchange, Mumbai, a carry forward (badla) session is held. The scrip in which there are outstanding positions is listed along with the quantities outstanding. Depending on the demand and supply of money, the carry forward rates are determined. If the market is over bought, there is more demand for funds and the carry forward rates (badla) tend to be high. However when the market is oversold the carry forward (badla) rates are low or even reverse i.e. there is a demand for stocks and the person who is ready to lend stocks gets a return for the same (called ulta or undha badla). How does one actually use Badla to leverage one's positions? The concept of badla can be made more transparent by means of an example. Suppose you had purchased 100 shares of ICICI for Rs 175, which is trading at Rs 180 in the market at the end of the trading session (a trading session in the BSE runs from Monday to Friday). You feel that the stock price will rise further. Therefore you wish to carry the contract forward to the next trading session by paying what are called badla charges. In any badla transaction there are two key elements namely the hawala rate and the badla charge for the scrip. The badla charge is the interest payable by the investor for carrying forward the position. The badla charge, as explained earlier is market determined primarily dependent on the supply of funds for financing a share. It is fixed individually for each scrip by the exchange every Saturday and it is calculated on what is called the hawala rate. The hawala rate is the price at which a share is squared up in the current settlement and carried forward into the next settlement in the next trading session. The existing position you have is squared up against the hawala rate fixed and carried forward after factoring in the badla rate. The difference is paid to your broker or received from him. Say you purchased 100 shares of ICICI at Rs.175 in the current settlement and you wish to carry it forward to the next settlement. You have indicated to your broker that you wish to carry forward the transaction. The hawala rate is fixed at Rs.180 and the badla rate say is fixed at Rs.0.62 for the settlement usually a week. The badla charge works out to an annualised rate of 18% but badla is usually denoted in actual cash terms. Rs. Your purchase rate 175.00 Hawala rate 180.00 Difference 5.00* Hawala Rate 180.00 Add Badla charge 0.62 Carried forward rate 180.62 *(Accrues to the investor in this case. If the Hawala rate is lower than the initial rate the difference has to be paid to the broker). (In actual practice your broker will request you to maintain a margin for arranging the badla finance. There can be other charges too and it can vary from broker to broker. All the charges apart from the badla charges depend on your relationship with your broker.) The amount of leverage you get effectively depends on the margin insisted upon by your broker. If your broker insists on a 25% margin you get 400% leverage or four times the amount you are ready to deposit as margin. At the end of each settlement you carry forward your position at the hawala rate and adjusted for badla. You can carry forward the transactions for settlements. More than anything it is important to note that, the mechanism of badla financing can be a bit complicated when bonus, rights, dividends are declared or when books are closed. Therefore it is always advisable to understand the process fully before venturing into this area. It is meant for active investors with a speculative bent. This automatically implies a certain capacity to bear losses. [Source:MarkoIndia via WalletWatch) (WalletWatch strongly suggests that the potential users of badla investors carefully consider his/her actions by a judicious mix of experience, expert opinion and knowledge before venturing into badla.)