Market Blues hit Regulators
The Finax Ledger
There is a thin line of difference between being market regulator and being party to the market mayhem. Indian authorities seem to forget that time and again. Mr. P.Chidambaram crossed all limits on the Black Monday of May ’06, offering advice to retail investors to stay invested when many had lost their shirts. At one time during the day, many in Mumbai’s financial sector were left wondering about the role of regulators, as they saw Chidambaram seeking to talk up the market. Next day there was an editorial in ET (Mumbai edition) criticising PC for the same.
“…..So overwhelming was the alacrity shown and the scale of the ministry’s involvement that some may have wondered if this was the same minister who had in the past shrugged off stock market blues.”
2 days after that PC tried to clarify his position by writing a letter to editor (which was published in ET) saying that he only wanted investors to be cautious and tried to warn retail investors to look into the fundamentals. I thought the sense has prevailed and we are back to normal.
Exactly 1 month after the black Monday I saw Manmohan Singh’s statement on CNBC – Awaaz that after a one month long free fall in the market now the P/E ratios have returned to OK levels. It was followed by a statement by Mr. Damodaran in a seminar that now Indian FI and MFs should stand against FIIs as a counterforce. Nowhere in the world would FM and PM indulge in such remarks about the markets. Nowhere in the developed financial markets will regulatory authorities show signs of irritation and exasperation when stock prices tumble. And we read in innumerable articles that Indian capital markets and regulatory systems are well-developed (often quoted as a strong plus point while comparing India with other emerging markets). It seems market blues have hit regulators.
Ravikiran Surana
BM 2005-07
There is a thin line of difference between being market regulator and being party to the market mayhem. Indian authorities seem to forget that time and again. Mr. P.Chidambaram crossed all limits on the Black Monday of May ’06, offering advice to retail investors to stay invested when many had lost their shirts. At one time during the day, many in Mumbai’s financial sector were left wondering about the role of regulators, as they saw Chidambaram seeking to talk up the market. Next day there was an editorial in ET (Mumbai edition) criticising PC for the same.
“…..So overwhelming was the alacrity shown and the scale of the ministry’s involvement that some may have wondered if this was the same minister who had in the past shrugged off stock market blues.”
2 days after that PC tried to clarify his position by writing a letter to editor (which was published in ET) saying that he only wanted investors to be cautious and tried to warn retail investors to look into the fundamentals. I thought the sense has prevailed and we are back to normal.
Exactly 1 month after the black Monday I saw Manmohan Singh’s statement on CNBC – Awaaz that after a one month long free fall in the market now the P/E ratios have returned to OK levels. It was followed by a statement by Mr. Damodaran in a seminar that now Indian FI and MFs should stand against FIIs as a counterforce. Nowhere in the world would FM and PM indulge in such remarks about the markets. Nowhere in the developed financial markets will regulatory authorities show signs of irritation and exasperation when stock prices tumble. And we read in innumerable articles that Indian capital markets and regulatory systems are well-developed (often quoted as a strong plus point while comparing India with other emerging markets). It seems market blues have hit regulators.
Ravikiran Surana
BM 2005-07
posted by FINAX at
7:05 PM
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