MFs Happy With SEBI's Move To Allow Short-Selling

Mumbai: Mutual funds have hailed SEBI's amendment enabling domestic fund houses to engage in short selling and lending and borrowing of securities. The SEBI will notify the date from when mutual funds can do short selling. The market regulators had already announced its intentions to allow short selling by institutional investors, but is yet to announce the effective date. It will allow the mutual funds a two-way arbitrage. This also gets our market in line with the global markets, where short selling has been happening for quiet some time now. When traders feel that a stock price is headed for a downward stride they short sell. Without short-selling, the general tendency is to look for stocks that will rise and just ignore the ones they think are overpriced. Fund managers say that, however, they will have to wait to see how much this will affect our markets.