Bhutto and bombs in Karachi3 min read . Updated: 21 Oct 2007, 11:18 PM IST
Bhutto and bombs in Karachi
Bhutto and bombs in Karachi
The bomb blasts that killed more than 100 persons in Karachi, after Benazir Bhutto returned to Pakistan, underscore the threat from terrorism to ordinary citizens. It is even more disconcerting to note that suicide bombers are so enthralled by the philosophy of terrorism that they are willing to kill themselves. Bhutto was accorded a tumultuous reception. However, though she was ecstatic, she should have been discrete and avoided the carnival procession. The Indian cricket victory procession in Mumbai, after India won the Twenty20 Cup, too, was a major security error. This is not Latin America, where the passion for football, music and dance are supreme. This is South Asia, where greed for power and hunger for vengeance reign supreme.
This refers to the editorial, “Frothy waters", Mint, 16 October. Warren Buffett’s quote beautifully sums up the game played at the bourses. It’s very relevant to the phenomenal rise in Indian indices, which are hurtling upwards as if there were no tomorrow.
The GDP growth rate of 9%, combined with a premium interest rate regime, has turned India into a magnet for international investors. Recently, foreign funds poured a record of $1 billion into the stock market in a single day. A significant portion of this belonged to the faceless foreign investor, armed with ‘participatory notes’.
In the recent HT Leadership Summit, the finance minister cautioned the average investors in his message. His musings were received tentatively, as the unsure United Progressive Alliance government willbe loath to stifle these inflows and in the process crash the dream run of theindices.
However, if the blizzard of foreign fund inflows has the coffers of big companies bursting at the seams, it has also blinded many investors who are not mindful of the danger in such a market.
The danger these faceless foreign entities pose lies in their ability to vanish quicker than they have appeared. Unfortunately, when the tide runs out, the majority without clothes will be the small and retail investors. Don’t be surprised if some are found without life, too.
The editorial, “Frothy waters", Mint, 16 October, has started with the basic question: “The Sensex is above 19,000. Is it a cause for jubilation or worry?"
As a small investor who has purchased stocks over a period of time in a systematic manner, I have worries about the index’s ever-rising highs. In this context, the quotation of Warren Buffett, “You only find who is swimming naked when the tide goes out", does give me some uneasiness.
—Bidyut Kumar Chatterjee
I read the reporting on the participatory notes (PNs) issue by Manas Chakravarty and Mobis Philipose, “Surprise recovery after nosedive", Mint, 18 October . I don’t know if this email will go to them directly, but I want to say that their reporting was the most incisive that I have read on the subject. They really seem to understand the structure of the Indian market and the effect this will have. I would like to contact them because I am trying to get more information on how the PNs issue will affect stock borrow in the Indian market. Given that the largest issuers of PNs are also the largest suppliers of stock loan, I am thinking that if they are forced to unwind the longs backing the notes they might have to call in their borrow. Do you have any thoughts on the matter? Would you be able to recommend someone I could contact whom you think would be able to provide some insight? Any thoughts or help you could provide would be greatly appreciated.
—Robert Weaver, Director of Research Forest Investment Management, Old Greenwich, US