The Hindu Business Line : It's going to be a Sensex and bull story...

IT is one of those times when stock markets are front-page news (for the right reasons) in even general interest dailies. Those who had sworn on their kids never to look at a stock quote again are making discreet calls to the neighbourhood broker - "kya ho raha hai yaar, aajkal dikhte nahin. Chalo kabhi baiththe hain."

Sounds like small talk but actually means - "Sorry for that punch I landed on your nose way back in 2001. Let's have a beer and talk stock. And no need to tell the wife about the beer or the stocks."

In short, the retail tribe of investors (read punters) is getting restless to get into the thick of action, some even beginning to think if they have not missed the gravy-train already. Brokers and fund-managers are getting ready to welcome them. Product ("tailor-made for the retail customer") launches have begun. Every day asset managers are filing new fund plans for regulatory approval. New icons have begun to rise. And Benjamin Graham's 1949 classic, Intelligent Investor, is reappearing in bookshop windows.

One of the most heated debates anywhere a couple of analysts gather is the level of the Sensex, currently hovering near 5000. While chartists invoke hanging men and black candles the others talk "fundamentals", generally a euphemism for `extra' information.

At a roundtable the other day at BSE, a proprietary trader, Mr Rakesh Jhunjhunwala, who has large equity holdings in several companies, said, "This is the beginning of the longest and most secular bull run in the history of the Indian stock market." Reverent brokers say that Mr Jhunjhunwala, reportedly the biggest individual taxpayer of Mumbai, has an "uncanny ability to pick the right undervalued stocks". He, however, refused to hazard a guess on the level of the index.

Those playing the stock market it is actually being run by foreign institutional investors. "The FIIs are bullish on Indian companies. Whether we believe or not, they believe that we are creating world-class performing companies here. And they are putting money where their mouth is," said an investment advisor. No arguing as SEBI data shows that FIIs have poured in more than Rs 80,000 crore in the Indian market.

Mr Sanjiv Duggal, Chief Investment Officer of HSBC AMC, says they are not yet through. "We are in a bull market. FII investment in India is only 10-12 per cent of market compared to Malaysia's 40 per cent or Thailand's 20 per cent," he told the BSE roundtable. What he means, in other words, is FIIs would continue to buy Indian equities and as long as the dough keeps flowing, the indices are headed north.

Says Raamdeo Agarwal of Motilal Oswal Securities, which recently launched a portfolio management service for high net worth investors, "When the Sensex touched 4200 in 1992, its price earnings multiple was 70. Now when it touched the same level, that ratio is below 14. I believe the market is headed towards 7000 or 8000 levels, of course, with quotational losses en route. But I cannot say when it would reach there."

Privately, fund managers are a bit jittery. "Stocks that I bet would appreciate by 50 per cent in a quarter have shot up four-five times in a matter of a couple of months. They continued to rise even after I sold. Now I do not know whether to be happy with the profit I made or rue that I baled out too quick," said the fund manager of a leading mutual fund.

Meanwhile, what does the regulator say? Mr G.N. Bajpai, Chairman, SEBI, told a gathering of consumer rights activists recently, "Only smart, informed investors with analytical abilities should go to the market directly. The others should go through professional asset managers." What it means is SEBI is not responsible if you lose your shirt playing the market.

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It's going to be a Sensex and bull story...