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- Nitin Kamath: Closing Market For Local Elections Wrong; MCX To Open Evening
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There is no work in the stock market in Maharashtra today on January 15 due to municipal elections. Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) have declared a complete trading holiday on this day. However, this decision has been questioned by Nitin Kamath, co-founder of the country’s largest brokerage firm Zerodha. He has called it bad planning.
Earlier there was only settlement holiday, then full leave was given.
Initially the exchanges had declared it only as ‘settlement holiday’, that is, only transactions of money and shares were to remain closed. But last week the exchanges issued a new circular stating that due to bank holiday in the state, trading will now be completely closed.
Kamath said – such holidays are not right in the era of global market
Nitin Kamath said- It is not logical to close the entire market for any local body elections. He argued that the Indian market is now connected to the global system, hence such holidays affect India’s image before international investors.
Quoting Charlie Munger, former vice chairman of Berkshire Hathaway and partner of legendary investor Warren Buffet, Kamath wrote – “Show me the incentives and I will show you the outcomes.” He indicated that no one in the system wants to change this old system.
Market experts said- India needs global standards
Market experts say that India is on the way to becoming the third largest economy in the world. In such a situation, due to frequent closure of the market due to local holidays, foreign fund houses face problems in hedging and trading. However, SEBI and the government argue that it is necessary to provide facilities to employees and voters on the election day.
MCX work will start in the evening
Even though the stock market is closed for the whole day, there will be partial work on the Multi Commodity Exchange (MCX). Trading is closed in the morning session due to voting, but bullion contracts like gold and silver will be traded in the evening. Trading in some agri-commodities has been allowed till 9 pm.
What is settlement holiday?
Explain in simple language what is the difference between trading holiday and settlement holiday. Shares cannot be bought or sold during a trading holiday, whereas during a settlement holiday, trading takes place but the process of receiving shares in your demat account or receiving money for the sold shares stops.
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