'Centre Seems Uninterested In Developing Capital Market'

SMB: The association has recently formed three committees for the development of the capital market namely, the Industry Affairs Committee, mainly interacts with Sebi to discuss the latest developments in the industry. This is a dedicated panel, comprising about 15 members, working for the development of the capital market.

Second, the Infrastructure for the Capital Market Committee. This has been given the priority agenda and is headed by former Unit Trust of India chairman S A Dave. The committee has been formed to emphasise on the needs of the capital market at this hour.

The third committee has been formed to frame a code of conduct for merchant bankers. Ambi, being a self-regulatory organisation (SRO), should have a set of code of conduct and third committee has been formed for this purpose. Apart from these three committees, four chapters (this actually means branch offices) have been opened at the four metros of Delhi, Calcutta, Madras and Hyderabad. These chapters have been specifically opened for better co-ordination among the 530-odd members of the association.

 

BS: Could you further elaborate on the workings of the infrastructure committee?

SMB: The government has policy papers on telecom, power, computerisation. However, the same government seems to be uninterested in developing the capital market. There are presently 7,000 listed stocks in the Indian stock exchanges, and despite the government's efforts to attract foreign investments, the capital market is awaiting some definite steps from the government to improve the state of the markets.

BS: The capital market projects a dismal picture under the present circumstances. When do you think the capital market will revive?

SMB: It is true that the market is passing through a difficult phase now. Perhaps one can say that the market has hit the trough, but like markets all over the world, this is only a temporary phase. A downtrend is an inherent feature of the market, and it is only a matter of time before the markets revive. I am quite certain that the Indian capital market is going to move upwards and settle at a level where it can sustain itself. I will not like to comment on exactly when the market will revive. However, there are some people who are saying that the markets will revive after Diwali (mid-November).

BS: What are the factors affecting the capital market?

SMB: There is actually an amalgamation of several factors, all contributing to the present dismal state. The postal department, for one, has to improve its show regarding delivery of share certificates. There have been too many cases where deliveries have been made to the wrong addresses or postal theft has led to huge losses on the part of the retail investors.