The Hindu Business Line : `Fresh scams in capital market appear remote'

ARE you among those retail investors who have serious apprehensions on the possibility of fresh scams in the stock markets, especially in view of the new peaks being recorded by the indices, and afraid of another market crash?

Don't worry, the chances of fresh scams and market crashes are quite remote, says the Chairman of Karvy Consultants, Mr C. Parthasarathy.

This is because the Indian capital markets now have superior and highly transparent trading systems accompanied by sophisticated surveillance.

The Karvy chief was also bullish on the capital markets and attributed the stability to the nation's democratic set up and the ongoing economic reforms. Supporting the Goldman Sachs predictions on India emerging as dominant global economy, he said the Indian capital markets offer phenomenal opportunities.

Mr Parthasarathy was addressing a seminar on `Capital markets and investments - challenges and opportunities' organised by Dr JMR Consulting here on Monday evening.

Acknowledging the challenges such as market manipulations, Mr Parthasarathy said: "The biggest hedge against risk in the capital markets is knowledge. I advise the investor community to protect their interests by taking `informed' decisions."

He viewed that the country today has world-class companies in the strongly emerging sectors such as steel, automobile ancillaries, cement, pharmaceuticals and information technology.

The services sector would witness phenomenal boom and contribute significantly to the country's economic growth. Further, the process of economic reforms and liberalisation would be irreversible at least for the next four-five decades, the Karvy Chairman said.

Differing slightly with these views, the Vice-President of Birla Sun Life Insurance, Mr P. Nandagopal, said the scams were bound to take place as the capital markets were basically driven by greed.

Subscribing to the India success story, he advised the investors to guard their interests with the help of disciplined investments and knowledge.

Strongly advocating investments in equity with long-term perspective, he said insurance was the only long-term financial vehicle in the country now.

Preferring not to rule out the possibility of scams in the capital markets, the former President of Hyderabad Stock Exchange (HSE), Mr P.C. Shrimal, however, felt that the magnitude of the scams would not be as serious as those the country witnessed earlier. This was again due to the world-class trading and surveillance systems currently practiced by the Indian capital markets.

The HSE Executive Director, Mr S. Sarveswara Reddy, attributed the current stability in the capital markets to the continuous measures of the market regulator in the last 15 years to empower the investor through knowledge sharing and awareness.

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`Fresh scams in capital market appear remote'