Securities & Exchange Board of India (Sebi), on Friday, cautioned Asian economies about their markets being turned into playgrounds where insider information is disproportionately present and used.
Addressing the conference organised by Asian Securities Analysts Federation here, Mr Damodaran said Asian markets, particularly India and China, cannot gloat over the fact that their economies continue to grow at fast pace and must put in place risk management systems to see that markets function in orderly and sustainable manner. “We cannot sit back on our weaknesses... We have to build on our strengths... We have to put in place practices that are better suited to our markets at present,” he said. In this regard, he called upon analysts to have an industry code for objective and fair assessment of stocks.
The world over, investors are not given the kind of attention they deserve despite the fact that they are most critical to the markets. However, in India, Sebi and the Centre have decided to make investors education the top priority in 2008, he observed.
Knee-jerk reactions Mr Damodaran also warned Asian economies of the possibility of volatility in their markets due to decisions of “certain categories of investors from matured markets”, a trend faced by India and other countries in the region of late.
“There are certain categories of investors from matured markets, where returns are not as good as in the past... So for greater pastures they have landed in our backyards because our markets give them good returns... They will abandon our markets if they (markets) don’t give them good returns... This will lead to volatility in our markets”. Market regulators cannot have knee-jerk reactions to developments in the markets and will have to make rules and principle-based regulations to avoid any systemic risks.
Had the Asian markets been more integrated with global markets, the impact of happenings elsewhere would have been more, he added.
Call for code of fair practice “We cannot sit back on our weaknesses... We have to build on our strengths... We have to put in place practices that are better suited to our markets at present,”Sebi Chairman M Damodaran said. He call.for an industry code for objective and fair assessment of stocks.
