It is said that markets have a mind of their own and this was amply demonstrated twice in the last four weeks. The whole world believed that Donald Trump winning the presidential polls would cause US markets to fall. He won the elections and Dow Jones has gained a whopping 9.48% from the lows of 4th November and 7.57% from Election Day.
Closer home our markets had discounted a rate cut from RBI on Wednesday the 7th of November. When the same did not happen we had a sharp intraday correction which saw the BSESENSEX lose 376 points from high to low. The next day markets gained 458 points on a closing basis. What had changed between Wednesday’s disappointments on their being no rate cut to optimism on Thursday? Beats me.
Sheela Foam had a great listing closing at upper circuit with gains of 41.37% on day one. SBIMF was a big buyer and bought over 15% of the IPO size. SBIMF was also an anchor investor in the company.
There is a very grave area which needs the regulator’s urgent attention on a war footing. The new breed of investor relations firm have started a differential pricing model which is linked to the market capitalisation of the stock price. This without public information and disclosure is nothing short of market manipulation and should raise a lot of eyebrows. The difference between what this firm does and a so called ‘market operator or manipulator’ does is a fine line. The regulator needs to look into this issue and flag the agencies and companies indulging in such contracts.
The real threat in such a contract is the fear that to maximise returns, information which is privy may be shared selectively and price manipulated. Also when the cut-off date approaches the price could be moved to ensure higher payoff. What is even worse is the fact that the agency with the promoter or on their own may give information to select market intermediaries which is factually incorrect.
This growing trend needs to be nipped in the bud at the earliest before collateral damage takes place.
Yet another company has seen its revenues and disclosure challenged. This time it is Manpasand Beverages the maker of Mango juice. While serious allegations have been made, the company has so far chosen to remain silent and there is no information to the bourses. There should be a clear statement by the company on this issue informing the status to investors
