No balloons this time (4 Jan 2003)

The bulls stampeded into the New Year by forcing the popular BSE Sensex past an important milestone. The Sensex soared past 6,000 to touch 6,029.59 for the second time in its history on January 2, 2004. But there was a difference. The previous high of 6,000 plus was only during intra-day trading on February 14, 2000, and not the closing. Also, Bombay Stock Exchange (BSE), now under a professional administration did not indulge in grand gestures such as releasing balloons from the Jeejeebhoy Towers as last time. Although this time, there is no bull operator powering the rally by manipulating stock prices with a supporting cast of friendly industrialists, bankers and scribes —the relentless rise of a 1,000 points in just 30 days without any correction is strange. Stock exchange administrators are also conscious about the ignominious end to the previous rally and are working overtime to ensure that there is no repeat performance.

Power-of-Attorney

While Stock exchange administrations are trawling through trading data to unearth any sign of mischief, investor sources tell us that several broker Depository Participants (DPs) have been moving shares in an out of client accounts almost at will. They do this by getting trading clients to sign over an irrevocable Power-of-Attorney in favour of the broker, allowing him to issue instructions to the DP account. While brokerage firms insist that this is perfectly legal, the practice could lead to dangerous consequences for investors if the market goes into a sharp correction. The regulator too needs to examine this practice to gauge whether there is rampant misuse of POAs and its consequences, if any.

Tale of two chairmen

The soaring Sensex creates a sense of dÃƒÂ©jà vu, but the UTI highlights the dissimilarities. Two chairmen at UTI had the tough job of taking over under disastrous circumstances. P. Subramanyam came in after a massive government bailout in 1999 and M. Damodaran took over in 2001 after a second collapse and a bigger payout by the exchequer. Then both were rewarded with an incredible stroke of good fortune. The dot.com mania during Subramanyam’s tenure was the sort of madness that occurs only once in a few decades. But instead of riding the wave of fortune, Subramanyam was ensnared by Ketan Parekh’s manipulations and led India’s largest mutual fund institution to a bigger disaster. Damodaran, on the other hand, has made UTI bask in the glow of a shining Indian market. The Trust has turned around and declared a dividend of 100 per cent in three of its schemes; it has also repaid loans taken by Subramanyam from a dozen banks and institutions and redeemed another chunk of the SUS 99 scheme. In fact, investors have even begun to return to UTI with fresh investments. When the UTI cases go to trail, the present turnaround would be the biggest factor in favour of the prosecution, if indeed it is serious about making a good case.

The support circle

Konkan Railway Corporation’s Skybus project has found some more powerful supporters. An hour before midnight on December 23, fifteen members of the TiE (The Indus Entrepreneurs) who were in Goa for an international retreat went to check out the Skybus prototype and Skystation. Among them was management guru C. K. Prahalad. He was so enthused at what he saw that he pronounced the Sky Bus a ‘world class technology’ rather than Indian Technology. Some of the members wanted to take the Sky Bus concept to San Francisco, while others such as Prakash Hebalkar of Profitech felt that linking Mumbai’s airports would have been an ideal pilot project. Prashant Gulati from Dubai wrote in saying, “That little was enough to wake the Indian in us to think for a future for this exciting technology. We are actively pursuing the progress of the technology and its spread to make it successful internationally… from Silicon Valley to Sharjah”. He tells us that the group included A. J. Patel, Nitin Mehta, Saurabh Srivastava, ailash Joshi and others.

Bad Zen

Maruti Zen has certainly got it all wrong this time. Many viewers simply found the concept of Tiger Zen the predator, stalking a femme fatale in skimpy costume rather boring. But several Delhi-based women’s groups have drawn attention to the dangerous sexual sub-text that the advertisement seems to promote. These NGOs have written to protest the ‘irresponsible and offensive’ advertisement in the context of the recent cases of ‘car-jacking and rape’ in Delhi. They say that by using the stalker car, Maurti is promoting the rape culture and depicting women as sexual objects. They want Maruti to withdraw the advertisement and ensure that women are treated as consumers first. Considering that a large chunk of Maruti’s loyal customers are indeed women, the company would do well to act swiftly and withdraw the distasteful ad.

-- Sucheta Dalal

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No balloons this time (4 Jan 2003)