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Technology Stocks : Satyam Infoway Ltd-(Nasdaq:SIFY) -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (908)	2/27/2000 8:37:00 PM
From: Mohan Marette	Read Replies (2) \| Respond to of 1471

India's Budget May Ease Investment Rules, Boost Debt Market By Sumit Sharma Mumbai, Feb. 25 (Bloomberg) -- India may ease rules that restrict foreign investment and stifle the corporate debt market when the government unveils its 2001 budget Tuesday. India's 6 trillion rupee ($137 billion) bond market may hold the key to India's huge requirement for money to fund more power project, roads and ports to improve the poor state of infrastructure and provide Indian companies the flexibility they require to raise funds to expand. Some investors are wary of India's domestic corporate debt market because bonds are still traded in physical certificate form and it can take weeks to complete a trade. Moreover, state governments set their own levels of stamp duty on transactions, another obstacle to trading. Average daily trading of corporate bonds is about 10 billion rupees. ``India needs to remove this stamp duty to encourage trading in bonds' and set up a depository to enable electronic trading, said Anand Rathi, president of the Mumbai stock exchange. The western state of Maharashtra, of which Mumbai is the capital, charges a stamp duty of 0.5 percent of the value of the transaction. Tamil Nadu charges 0.75 percent and Delhi about 0.37 percent, traders said. India has begun to open up its bond market -- in late 1996 it allowed foreigners to buy domestic bonds -- but foreigners have invested in bonds a fraction of the $10 billion they have invested in equities, after the stock market was opened up to international markets in 1993. Foreigners have sold an average $8.26 million more bonds than they have bought every month since they first invested in India's debt market in March 1997, according to Bloomberg analytics. Earlier this month, the government increased the limit that companies investing in basic industries such as roads and ports are able to borrow directly overseas to $200 million from $50 million. There is even talk of removing the limit altogether. Still, investment by a foreign institution is restricted to amaximum of 30 percent of the shares of a local company and at present investors can't invest in any of the top stock market performers, such as Satyam Computer Services Ltd., Infosys Technologies Ltd. and Housing Development Finance Corp. Both Infosys and Satyam's unit Satyam Infoway Ltd., however, last year sold American depositary receipts, becoming the first Indian companies to list on the Nasdaq Stock Market. ``A higher limit of say 45 percent for foreign investors will give scope for more money to come in,' said U.R. Bhat, chief investment officer at Jardine Fleming India Asset Management Ltd. Otherwise, ``foreign investors will go away to some other country.' Sure, India has made it easier for companies to raise capital internationally and list their shares on overseas exchanges, by doing away with a procedure that examined the company's performance. Over the past few months, Indian companies have raised about $640 million. Others have plans to sell ADRs amounting to as much as $3.5 billion this year. That's more than half the $6.8 billion Indian companies have raised since they were first allowed to sell shares abroad in 1992. There's also talk that the government will allow foreign companies, especially those in neighboring south Asian countries, to list their shares in India, bringing Indian exchanges more in line with their international counterparts. -Bloomberg