It is an old saying that life is about risk and investing cannot be an exception to this rule. Equity markets have a mind of their own and stock prices of companies fall and rise irrespective of performance and their financials. The trend of investing money in Share market in Kashmir is now more than a decade old phenomenon. But still ,investors and general public are not able to read the stock market, be it indices of Bombay Stock Exchange (BSE) or National Stock Exchange (NSE).Recent reports that investors in the Valley have lost crores of rupees during the recent rally when Indian stock market was on a roller coaster ride raises some important issues.
Are investors mature enough particularly in the Valley to put their hard earned money in Indian stock markets and in return get quick bucks? Are sub brokers operating in the Valley qualified to provide right kind of advisory services to these not so knowledgeable retail investors? Experience reveals something otherwise as tips and leads provided by these sub-brokers fails on more than many occaassions.Have retail investors attained financial maturity in Kashmir where not even the basic financial market architecture is in place?
There are more than 30 franchisees/sub brokers of broking houses operating in the Valley with majority of them located in Srinagar and some of them in other major towns of the Valley. The daily traded amount in stocks through these sub brokers in the Valley amounts to rupees 80-100 crores which by no means is small in measure. Market watchers in the Valley have estimated that investors in Kashmir have suffered a loss of more than 5-8 crores per day when the market tumbled during last two weeks. Even if the local investors are successful in catching the market momentum at the right time, they may lose their entire gains in a matter of few trading sessions if market changes all of a sudden. When one looks at the investor profile in Kashmir, majority of them are novices to the bizarre world of equity markets and much more immature and unsophisticated than investors in other Indian cities. The investors baring a few are totally dependent on the advisory services provided by sub-brokers/franchisees who more often than not take investors for a ride. What adds to the problem is the quality of personnel manning the franchisees as they are mostly unqualified for handling these tasks given the complex nature of the financial world and financial instruments. In comparison to other cities of India investors are more self directed and are not driven by hunches and rumors that is a common psyche here. The investors in developed countries and in India trade on line ,but due to lack of knowledge the human touch becomes all the more important and with it comes a need for greater degree of trust before an advice is given. The frantic world of stock and shares is not easy to understand as movements in the share prices are influenced by more than one factors which includes the domestic economy, the interest rate movements, world and regional political and economic situation, currency and bullion markets which exercise their influence in all parts of the globe and many other emotional factors. The rise in so called investment culture in the Valley while on one hand does reflect risk taking ability, a driving spirit for entrepreneurship. On the other hand it might give a cue about a gambling bent of mind and get rich overnight syndrome that has caught the fancy of present generation. Indian stock market has a history of duping retail investors and putting their hard earned money in few pockets. How can one forget the likes of Hashed Mehtas or Ketan Parekhs who through market manipulations duped the ordinary investors crores of rupees only to serve their interests. The same role can be said to have been undertaken by Foreign Institutional Investors (FIIs) who are calling the shots now and retail investor can do nothing but to look on helplessly. There are important lessons to be learnt from the recent losses that common investors in the Valley have suffered. It is time to wake up and use prudence while investing in Indian Stock markets and establish investor forums in Kashmir where dissemination of information about investing and issues related to retail investors are handled. Otherwise Kashmiris will add one more suffering to their list.
