The Hindu Business Line : `More IPOs mean stocks are heading south'

INDIANS have concluded that their country is shining, purely on the basis of the stock markets doing well. By this logic, Indonesia, Taiwan and many other countries are also shining, according to investment guru and co-founder of Quantum Fund, Mr Jim Rogers.

The rise in foreign institutional investment over the last two months and the fact that the equity markets are poised for a large number of initial public offers are clear signs that the market has peaked and is headed southwards, he said.

Mr Jim Rogers was speaking at the CNBC TV18 Mutual Fund of the Year Awards, presented by BNP Paribas, in association with Moody's Investor Services.

India was richer than China, 25 years ago, but due to the lack of momentum in the reforms process, has now lost the race, according to Mr Rogers. The sectors that the country must now pay attention to and profit from are tourism, natural resources and agriculture, he advised.

Mr G.N. Bajpai, Chairman, Securities and Exchanges Board of India, presided over the function. Mr Bajpai said that the mutual fund asset management companies must ensure that they help investors profit from the opportunities in the market, ethically and as per the rules of the industry and capital market. He cautioned that some fund management practices could lead to a decline in the market. Internationally, there have been issues in the mutual fund industry in terms of late trading, front running, conflict of interest etc and these must be avoided in India.

In a recorded address, the Finance Minister, Mr Jaswant Singh, said that the Unit Trust of India, the pioneer of the mutual fund industry, has now recovered from its debacle. The task now is to make investors aware that investments in mutual funds are ideal ways to earn higher returns, since interest rates are tumbling.

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`More IPOs mean stocks are heading south'