Satanic Bourses

I forget the name of the company but I am sure it starts with an ‘A’ and used to appear somewhere at the top of the B-group listings in the share columns of newspapers. It was a computer firm that promised great things, though in 1999 the only thing it had on offer were its shares. I was a fortuitous owner of a few hundreds, after being assured by my broker that I was among the privileged few who were privy to the super secret success schemes of the company. I later came to know that the ‘secretive few’ actually ran into several thousand suckers. Yet I would not blame my broker because the shares which all of us bought at a discount, started to rise. And everytime I ventured to sell, I was told that the price would swell.

And it did. It was on a roll. Soon my single digit cost price had two more digits on either side as consorts. Suddenly one day, it stalled, then dipped a bit the next day, and then started sliding. Again, I wanted to sell. No, said the experts, t’was just a minor correction. But the correction continued and the fall turned faster than the rise. Occasionally, its price would pause tantalisingly, testing and tempting my good sense, which alas, was on a holiday. But by the time it returned– the good sense, I mean — the scrip had become scrap, at the bottom of the heap. Then the consorts deserted and even that single digit ran a quick countdown to ground-zero before disappearing from fineprint. For the record, the company never sold a single software or a computer, not even a mouse, I guess. Oops, that was a rather long trot down memory lane!

If Manmohanomics of 1991-vintage heralded the advent of an economic revolution, the stock market was the venue where it was primarily played out. As reforms gathered momentum, the markets mirrored the mood of the urban middle-class which was in a hurry to make a fast buck; everyone was talking economics and betting on shares. Corporate India even beat Cricket India as the flavour of the season with many head honchos becoming heroes overnight; a significant rise in their company’s share price was akin to a Sachin century. Even Finance Ministers, taken in by the euphoria and media limelight, yearned for the applause of the avaricious audience occupying the market galleries. Budgets and stock markets became a made-for-each-other pair, of course, with all the accords and discords that go with a rollicking affair. But throughout the post-reform era, there was something else that ran high in the bourses, besides the sensex: Scams!

But long before Harshad Mehta and peers pioneered the high voltage scandals that rocked the nineties, the Mundhra Stock Scam of 1958-59 had cost a Finance Minister (TTK) his job and damaged Nehru’s image no end. Ironically, it was N’s son-in-law Feroze Gandhi who blew the whistle. But the FMs of the last two decades have been lucky in that they have survived several scares and scams. MSingh famously remarked that he cannot lose sleep over happenings in the stock market; this when Harshad was running riot with investors’ money. PC’s dream budget of 1997 sent the markets into a huge upward spiral before smoking out, leaving lakhs in the lurch. But despite many major and mini scams, if the markets have invariably recharged, rebounded and risen, it is less owing to enterprise and fundamentals and more because of the great gamblers perennially at play there. The credo of that creed is greed and this has singularly propelled the senseless soaring of the sensex beyond twenty thousand with nary an official eyebrow being raised. A persistently rising sensex does not mean all’s well — rather one smells a scam, albeit broadbased.

But the players and their profiles have changed and so have the rules of the game. The Harshad Mehtas of today are institutionalised. Obviously, the stakes too have risen in proportion to the depth of the gamblers’ pockets. Again, the biggest of them are the foreign ones that are pumping in billions to make billions more by manipulating this virgin, vulnerable emerging market. But such virtual wealth can vanish in a jiffy because it was a mirage from the start based on bloated values that bore little relationship to real worth of companies. So, when this capital flies to other lucrative emerging markets or if there is a cross-border assault owing to global factors, it sends our market to where my ‘A’ share alluded to in para 1 is likely lying. Indeed, this colonising of India’s stock market does not augur well at all to the country’s financial health, particularly when it is on a high-growth tangent.

And that brings us back to you, me and our petty kitty of shares. Barring buying stock at IPO time, which can happen only if you are lucky, trading and speculating is certainly not for the individual investor. The bourse is a crazy place where bears suddenly turn bullies and bulls lose their bearings with the lambs always at a loss, clueless on what’s afoot. Really, the stock markets seem more dangerous than even Iraq or Pakistan. With fires fuelled by big money raging out there, it is no longer a matter of burning one’s fingers if things go awry as it did this week; a gullible investor would only be immolating himself. And he would literally be the man on the street — not Wall Street or Dalal Street, but midstreet. Scores of small investors are in the dumps now and many small time brokers have gone broke; last heard, the sensex has not alighted from the roller-coaster. But do we learn? Doubtful, because the reigning motto in this addictive den is: ‘once bitten, never shy’. At the first sign of a turnaround the enticing bourses would once again become the happy hunting ground of these very same investors who would have by then re-invented all their ignorance and greed. The guessing and gambling would begin and the frenzy to recoup their missed fortunes would commence forthwith, for after all one has to only search where one lost it.

So here’s an exclusive tip before I go in search of my ‘A’ share: the sensex would touch 50000 this Sunday. And then there will be a correction. In fact, there is: I inadvertently put an additional zero. Sorry if you had already gambled in the gap between the lines!

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Jawahar T R