Why Friday’s 540-pt fall won’t hurt much

It’s getting increasingly difficult to write definitive stories on markets in a flat world of 24x7 trading activity. Amid fears of a collapse in its housing market — an important, market moving financial indicator — the US market fell yesterday, leading to a contagion fall across the world. India followed too, with the Sensex falling 542 points or 3.4 per cent to close at 15,235.
But even as analysts were rolling their sleeves to buy some bargain basement stocks --- Reliance Capital, Tata Steel, Canara Bank and HDFC --- the US market got its aspirin in the form of its second quarter GDP numbers that rose to a healthy 3.4 per cent, the highest in the past 12 months.

Story in The Indian Express, July 28, 2007

What’s a company like NMDC doing in a category like Z-group?

Ever since the category was created on January 16, 2002, I have never looked at Z-group companies. These are companies that the Bombay Stock Exchange indicates are to be avoided like the plague, bottom of the investment barrel. A company gets the Z-halo if it violates three of seven listing criteria --- giving notice of book closure and record dates, submitting its annual report, submitting quarterly shareholding pattern, paying listing fees, publishing quarterly results, redressing investor complaints and implementing corporate governance practices.
So, what’s a company like National Mineral Development Corporation (NMDC) doing in a category like Z-group? A state-owned mining major, NMDC’s share price in 12 trading sessions has risen almost 70 per cent. Nothing shocking about that --- Z-group companies are known to be illiquid, with little or no investor interest, and thus ripe for manipulators, particularly in rising markets (in falling markets they crash, in indifferent markets they remain invisible).

Opinion in The Indian Express, July 21, 2007

Our gods, their gods

How dare you insult my god?
The keyword here is ‘my’. For, I don’t think we mortals have it in us to be able to insult someone or something like God. The entity we term ‘god’ would not be any good if he gets insulted by the mortals he created. And anyone who thinks otherwise needs to get his ideas about his god examined.

Opinion in The Indian Express, July 19, 2007

New world’s new faith

If it is indeed an African great-great-great-grandmother that all the people on this planet have as a common ancestor beginning some 50,000 years ago, it must mean — as Nayan Chanda argues in his brilliant new must-read, Bound Together — the Oneness of this planet that spiritualists and Darwinians claim to realise is probably truer than even they imagined. Blonde was black, tall was short, straight was frizzy and all were Africans who, in the Ice Age, went out in search of food.

Opinion in The Indian Express, July 15, 2007

Home truth index

Finance Minister P. Chidambaram launched the National Housing Bank (NHB) Index on Tuesday, which is India’s first housing price index to collect data and track fluctuations in the property market. How exactly will it work? What does this mean in terms of Government policy? What does it mean for you and me?

Article in The Indian Express, July 12, 2007

The new habits of the world’s wealthiest people

More than anything else India’s growing number of wealthy — in the World Wealth Report 2007, the number rose 20.5 per cent and crossed 100,000, making India the home to the world’s second fastest growing wealthy population — shows that in a country known and tagged as poor, prosperity is flowering. It probably has been for a longer time. The difference over the past few years is that there is larger chunk of Indians who are legitimately wealthy. That is, the number of high net worth individuals (HNWI), with recorded wealth of $1 million or more has jumped sharply. That should excite the taxman and it is for him to take it forward.
What should excite readers of this column and those who criticise it as well, is to understand the route to this wealth. The report largely talks about financial wealth, with real estate thrown in. It speaks to us with data what we know in the language of anecdotal evidence. That most of the wealth of HNWIs is stacked away in equities, a full 31 per cent, up 3 percentage points over two years. But the big jump in 2006 has been in real estate, the allocation to which rose 8 percentage points to 24 per cent. Do note that this allocation is ‘investment allocation’, that is, commercial property, RIETS and other investment properties, and excludes the house the wealthy live in.

Opinion in The Indian Express, June 30, 2007

PSB hijack and other stories

The Punjab and Sind Bank (PSB) fiasco is an issue that goes beyond the bank, the banking sector, the institutional processes by which private money is controlled by public authorities or even corporate governance. It, in a manner ironical, questions the issue of crony capitalism that Prime Minister Manmohan Singh raised last month.
True, it’s finally PSB that’s under fire, with Congress party thrust ‘independent directors’ slugging it out with the bank’s chairman R.P. Singh, trading charges in public. The independent directors, two of whom are likely to get marching orders anytime now with another three following suit, claim the bank’s management led by Singh is underselling the bank. Singh in an open press conference yesterday showed how these ‘independent’ directors are interfering in the day-to-day functioning of the bank and are currying favours for their political masters, colleagues, sympathisers. On the other hand, perhaps they’re only in the self-gratification mode. Truth is on its way out and we are tracking the story.

Opinion in The Indian Express, June 27, 2007