Stock song of 2011: Why this kolaveri, di?

‘This is investors’ cry. A loud cry. For the year going by. Why this kolaveri, di?’

This is how a broker sums up the stock market trend for 2011, while copying the grammar-less lyrics and format of one of the most talked about song of the year.

The chartbuster song could well be the stock market’s unofficial anthem for the year, where investors are crying about a ‘murderous rage’ that has cost them millions of dollars in every single minute of trade in 2011.

The song, ‘Why This Kolaveri, Di' (Why this murderous rage, girl?), has crossed 20 million hits on the video sharing internet platform YouTube, becoming one of the biggest-ever chartbusters from the Indian entertainment industry.

On the other hand, the stock market is fast approaching towards a full-year loss of Rs 20 trillion (Rs 20,00,000 crore) in 2011, thanks to the ever-growing ‘murderous rage’ of the bears (a term used for the factors behind a stock market downslide).

A deeper look at the statistics indeed presents a gory picture of the state of affairs in Dalal Street, once home to a vast majority of share trading activities in the country and still widely used as a kind of synonym for the stock market.

The market has suffered an average loss of one million dollars in every ten seconds of trade so far in 2011 and the final figures might not be much different as only five days of trading is left for the year.

This came after a year 2010, when the market had gained one million dollar in every 20 seconds of trade.

The total erosion in the investor wealth for 2011 currently stands at about $600 million —— a figure nearly double the quantum of gain in 2010.

The investors’ wealth, measured in terms of total value of all listed stocks in the country, grew $317 million in 2010, but has fallen by $600 million this year.

The total market wealth even fell below the trillion dollar mark last week and is now barely keeping above the mark at $1.02 trillion.

In rupee terms, the total market wealth has fallen by about Rs 19 lakh crore since the beginning of 2010 and currently stands at about Rs 54 lakh crore. In comparison, it was close to Rs 73 lakh crore at the end of 2010.

The market barometers, the Sensex and the Nifty, have fallen by about one-fourth in 2011 against a gain of about 18 per cent in the previous year.

In absolute value terms, the Sensex has fallen by 4,770 points so far in 2011 against a gain of over 2,000 points last year. The index, comprising of large names like Reliance Industries, ICICI Bank, Infosys and TCS, is currently trading at 15,738.70 points and some experts have forecast a fall to a level as low as 11,000-12,000 in the coming months.

It was trading over 20,000-mark at the end of 2010 and even scaled its record high closing level in November that year.

Not many credible explanations have come in to soothe the investors’ sentiments and the experts have mostly blamed the downslide on the bourses on the global economic slowdown.

However, the contradictions come in the form of voluminous praise for the Indian growth story with an underlying message that India would continue to bloom despite a worldwide gloom.

So, many experts continue to paint a rosy picture with predictions of further rally in the market and are exhorting the investors to put in more money.

They also claim that Indian markets remain very attractive as the stocks are trading at just about three-times their book values against over four times in 2009 and even more a few years before that.

They also talk about the P/E or Price-Earnings ratio, a measure of how attractive a stock is vis-a-vis the company’s earnings potential, being as low as 16, down from 22-24 level about a year ago. However, the investors seem to have lost faith in these technical jargons, owing to their huge losses.

As the chief of a leading financial services major puts it, their customers want to know the reasons for huge losses suffered by them, just like the singer asks his ex-girlfriend, ’Why did you do this to me?’ (another meaning of the title of the song).

Just like the protagonist of the song, the investors will also not get any easy answers, he quipped with an uneasy smile on his face, while quickly adding that the investors are not the only victim of this stock market ‘kolaveri’ and his firm, along with almost all its peers, have also been hit hard.

The song defied all set-standards to become an instant hit, and similarly, there has been no method in madness at the stock market.

Another top market executive points out that the ‘kolaveri’ song took quite a few days to get one million hits on YouTube, but the stock market is taking a hit of one million dollars in every few seconds.

Probably in a sign of making fun of their own perils, the marketmen have also come out with their own version of the ‘Kolaveri’ song, with lyrics explaining the ongoing trend in the market.

A part of this version goes like this: ‘White skin-u bear-u, bear-u; bear-u heart-u black-u; bull-u, bear-u fight-u, fight-u; our future dark-u’.

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