why is India an emerging market..we now know the answer to this..it is mostly because the regulators are prone to knee jerk actions and reactions and often confused about thier roles and identities..why else would Sebi who is the capital market regulator intervene with policy changes to prevent dollar inflows? i thought that was clearly RBIs role..
the markets shut down on the basis of these ill conceived policies announced by Sebi, and the finance minister appears on on cnbc to soothe ruffled feathers and claims that FIIS are buying..how can the FIIs buy when the markets are shut? is there an unregulated offshore market in Indian securities that none of us are aware of?
what is this confusion on P notes? whose interests are being protected? every investor knows that p notes are part and parcel of the market and in fact fortunes have been made on the presumption that inflows based on p notes investments will continue..you close or regulate the tap and you run the risk of shaking confidence levels in the market..precisely whats going on in the market right now.
nothing has changed on the fundamental india story..what has changed is that SEBI has shifted the goal posts, and created somewhat of a floating goal post where investors are no longer sure if what they invest may end up being a self goal..
funny times these..
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