Exchange trouble benefits rival

PUBLISHED : Saturday, 11 October, 1997, 12:00am
UPDATED : Saturday, 11 October, 1997, 12:00am

The four-day shutdown at the National Stock Exchange (NSE), following satellite failure, has cost the three-year-old exchange more than a loss of valuable business.

The breakdown permitted its main rival, the 125-year-old Bombay Stock Exchange, to improve its own position during the hiatus.

Daily volumes on the Bombay exchange improved to more than the 10 billion rupees (about HK$2.14 billion) mark, compared with the average of 15 billion rupees on the NSE.

The Bombay exchange's 30-share index (Sensex) has also moved above the 4,000-point mark.

The 77.41-point rise in the Sensex, to 4,057.37, yesterday was assisted by a steep rise in the price of Reliance Industries on hopes that the company's half-year results, for the period from April to last month, would be exemplary.

In the middle of last month, the NSE had shifted member terminals from the satellite Insat-2A to the new Insat-2D because of 'wobbling' associated with the orbit of the older Insat-2A satellite.

The move was expected to benefit all NSE members.

Last week, the 2D satellite had to be abandoned after scientists at the Indian Space Research Organisation failed to salvage its transponders.

The satellite, which had been launched from French Guyana on June 4, lost its earth-lock due to a short circuit.

Further recovery was termed impossible.

The space research organisation is now pinning its hopes on Insat-2E, scheduled for launch in June next year, to at least partially make up for the loss suffered by the failure of 2D.

Of the available 23 transponders, the Department of Telecommunications had allocated only seven, thereby limiting damage to potential users.

The NSE had to suspend normal trading on October 3, and from Monday to Wednesday, until all terminals linked to the 2D satellite could be shifted back to 2A.

The exercise cost the country's most technologically advanced stock exchange about 20 million rupees.

Even this was a temporary measure to minimise the loss in trading days.

Some terminals will eventually be shifted to a third satellite - either Insat-2B, which is three years old, or 2C, which is a year old.