The Hindu Business Line : `Financial markets catalyst to economy'

MR S.R. SRIDHAR, Director, Srivari Impex (India) Pvt Ltd, addressing the commerce students of Ethiraj College for Women, under the Business Line Club lecture series.

Chennai , March 21

Financial markets are a meeting place for investors and the people who need money and vice versa.

They act as a catalyst for the economy as well as a mirror for it. .

They also serve as an indicator of the things to come, said Mr S.R. Sridhar, Director, Srivari Impex (India) Pvt Ltd, Chennai, while addressing the commerce students of Ethiraj College for women, under the Business Line Club lecture series.

Elaborating on his topic `financial markets', he said they offered womenfolk a higher earning potential even while being at home, apart from providing greater scope in terms of career opportunities.

In addition, they also offer more challenges and excitement.

For those who invest in the equity market, the demographic profile and personality of the investor are indicators of one's risk-taking ability, he said.

If these factors favour risk-taking ability then one can invest in equities, otherwise it is ideal to play safe.

Excessive control

On the excessive control in financial markets, he emphasised that "a market has to be regulated, otherwise there will no order, only chaos and confusion. Also it will lead to crisis of confidence." He further added that the "Indian financial market is the most orderly and most disciplined market in the world. It is very transparent."

On the benefits of depositories, he said, "physical certificates have problems like forgery, mismatch of signatures and damages to certificates, whereas depositories are stored electronically."

In financial markets what not to do is more important than what to do. If one makes a mistake on the price of the company's share, one's entire capital can get wiped away, Mr Sridhar added.

Bright stock market

The future of the stock market is bright and the financial market never gets suppressed because of any crisis outside the economy such as terrorist attacks, wars and natural catastrophes. They only can have a short-term impact, he emphasised.

With the present regulations by institutions such as the watchdog SEBI and new technologies, the scope for scams is minimised.

However, an investor should not enter the market with a blind eye and should take precautions: invest in companies known to him or her for a long time; go through the financial newspapers and magazines to update knowledge on the invested companies and the right selection of scrips.

He concluded by saying that "low interest rates offered on fixed deposits and tax sops extended to investors of stock markets, will further boost the share markets performance and the new generation can take it up as a career".

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