SEBI finally permitts Short Selling for everybody.............

In a landmark day for Indian markets; SEBI (Stock Exchange Board of India) once again permitted short selling on stocks in Indian markets by all participants including FII and DII after banning the practise in 2001 following the KP meltdown. The detailed piece of news can be read from Business Standard's website below:

http://www.business-standard.com/common/storypage_c_online.php?leftnm=10&bKeyFlag=IN&autono=31557

I am not going to repeat the press release her but one important point I would like to mention is that this is a very positive news for Indian markets. This will now create what we call as "Sell side" in Indian stock markets. It will create a true counter balance for all the bulls in India. Till now the bears were handicapped as they could only play in the F&O segment. But after an appropriate Stock Lending and Borrowing (SLB) mechanism is put in place the playing field would be even for both bulls and bears. That will help us in true price discovery for each stock. To start with.......short selling will only be allowed in F&O stocks but I believe at a later date it could be allowed in all the stocks listed on the bourses like any other advanced market in the world. Also this could potentially give rise to new financial products like a long - short funds, pure short funds, etc. Considering the bull run in India for last 4 years and the potential of a slowdown over the next 2 years I believe there will be lot of potential opportunities to short overvalued stocks.

If anybody shares my toughts, disagrees with it or have any questions feel free to contact me at secmoney@gmail.com

Regards,
Bargain Hunter