The writer has stated that reinvestment is likely to be in assets that are considered safe and will also happen at more prudent valuations ans that these should include mainstream companies, growth stocks, growth markets like India and China, moderate to high safety assets and conventional financing for viable projects - that being the case we should be finding more steady inflows from the FIIs leading to stabilization of the markets in the short term. The author rightly mentions that the dependence on the domestic rupee resouce will increse - this in turn should lead to strengthening of the rupee mainly vis a vis the dollar. Indian markets had drifted from their fundamental valuations as a result of the liquidity driven over-valuations and hence the current corrections. Sub-prime is a contributing factor and not the the sole reason as is being made out. The central banks effort in decreasing liquidity is a step in the right directions and not a wee bit too late.
FIIs,HNIs are only main culprits for the down falls and upsides in stock markets.since they have huge capital they play whichever they like. Retail investors are the main sufferers of both sides of the markets.
RE:market
by Puneet Seth on Aug 19, 2007 01:36 PM Permalink
I guess equity mkts are full of speculation, or may me manipulation too.
Me, my family, friends & relatives have lost huge amount of money in last couple of weeks. Even IPO wch were considered safe .. have eroded my all savings of last 2 years. I'd never come back and invest in mkts ... espl directly. I feel only mutual funds and through SIP's; i have made some ve returns. For retail investors like me who are not experts I advise them to stay away from mkts and save your wealth & health. Better buy some balance mutual funds or keep money in banks, since interst rates are rising now. One can get 9 percent easily or invest in PPF and PO savings. TOTAL SAFE & SECURE
