The Hindu Business Line : Market and economy

This refers to the article, "Stock market: Barometer of economy?" (March 24, Business line). It was a brilliant piece of writing and reflects the real picture. Please accept my congratulations.

Vivek Kaul

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I whole-heartedly agree with views expressed in the article, "Stock market: Barometer of the Economy?" (March 24, Business Line) The views must reach the Finance Minister.There is another way of approaching the same issue. Consider any city in India, for instance, Coimbatore in Tamil Nadu.

Of the nearly 50 lakh people, around 0.2 per cent may work in the companies listed in the stock market. The rest works in other domains such as agriculture .

Rise and fall of the index at the national stock exchange doesn't reflect the healthier aspects of a country's economy. Rather, they show the disclosed or undisclosed weakness of that particular company.

For example, the rise and fall of Enron has not made any impact on the US stock exchange.

Ganesan Ambedkar

Chennai

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Compliments on the well-written article, "Stock market: Barometer of the Economy?" (March 24, Business Line). Why such a big noise is made about our stock market has always been a mystery.

The markets are the biggest gamble next to the lottery and players are in it only for the next big windfall. All the talk about value investing seems only hogwash. Even the so-called pundits predicting the future earnings growth of companies seem only to be talking glib.

Just as doctors are responsible for their diagnosis, is it not possible for these so-called analysts to be held accountable for their predictions based on which crores of rupees are invested in the market? Should it not be made mandatory to publish the data on which they base their opinions? It seems to me that the stock market serves the purpose of bringing cheap funds to companies, by avoiding intermediaries. It only gives companies the opportunity to make enormous profit by raising funds and then siphon-off them off.

The article, however, did not throw light on one point — why is a healthy secondary market necessary, assuming that primary market is de-linked from the secondary market and that the former would be driven purely by merit of the IPO. It seems such a huge waste of time and resources, because it does not contribute any productive gains to our economy.

Reams of paper, air time and productive capital seems to be depolyed in something that does not contribute to the wealth generation in the economy . Could some light be thrown on this?

Girish B. Kotbagi

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