STATE OF THE ECONOMY & HOW FOREIGN WEALTH, ILL GOTTEN, MANIPULATES OUR MARKET.
There has been chaos in the market recently when it bombed from 21000 [sensex] to less than 8000 in just a few months. How is it possible, the reason is the withdrawal of black money which is routed through foreign entities, from the market overnight, this can have a direct devastating effect on our economy, which is being manipulated with participatory notes, through which some bank some where guarantees the funds and plays a major role in our market by pushing it up during investment and pulling it down during withdrawals.
I am not sure whether we have a mechanism in place to find the roots of the money brought in through the foreign banks to be placed in our markets to profit making and intraday short selling is another lacunae, which has not been addressed yet by our regulators. All other countries have banned short selling intraday trade practice, which has a direct bearing on our market and our poor investors alone lose out much of the funds are those participating participatory notes can be withdrawn any day with out notice, which in turn makes our market much vulnerable towards such big players and entities who can easily bring up the rate of a particular share also can do the reverse when it suits them.
Putting a time bound lock in period for such wealth coming through the foreign entities can have some affect of stability in our market. While we keep a watch on the amount flowing in through, the institutions to be kept under watch and caught if their complicity is proved as use of black money has to be checked if we need a fool proof system of countering mechanisms for such funds straying in to our market.
These ill-gotten funds are the main culprits in manipulation of our market, just as what Mr.Harshad Mehta proved once for the benefit of bewildered investors. It is high time that people start debating the ifs’ and buts’ on these issues on a whole scale basis, to come out winning in checking the illegal funds flow in to our sacred market.
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