04 December, 2020

Secret Of Crisp Notes

Is the current bull run in India being driven by unaccounted wealth?

Secret Of Crisp Notes
outlookindia.com
-0001-11-30T00:00:00+05:53
In November 2005, an expert group of the finance ministry noted that "some of the money coming into the market... could be the unaccounted wealth of some rich Indians camouflaged under the guise of FII investment. The money might even be tainted and linked with such illegal activities as smuggling and drug-running." This August and September, two SEBI orders expressed fears that Indian promoters had purchased shares in their own firms through the FII route, which was possibly being misused to manipulate the market.

Such conclusions run against the sentiment that the current bull run in India—and other emerging markets—is being driven by clean FII inflows, and that this time it's different from the previous ones, where cartels (headed by brokers like Harshad Mehta or Ketan Parikh) abused the then-existing systems. They also prick a few holes in the theory that the rise of the Sensex and the Nifty is a sustainable one. Finally, they raise doubts about the government statements that there is nothing wrong with the Indian stockmarket....
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