SEBI should see that minority /retail investors are not losing their money due to mischievous elements in the stock market. For this, the following steps are needed:
- Block deals should be banned. Any one wants to purchase share, he should go through NSE/BSE and purchase through open windows thus benefiting the real investors. Bulk deals mostly disfavour retail and minority shareholders.
- Shares should not be divided into voting right shares and non-voting right shares. Since non-voting right shares are sold at lower rates, the real price of share also lowered. If any one wants regular income without right in the ownership of company, let them opt for preferential shares or debentures. So SEBI should ban this.
- Insider trader practice should be watched carefully by SEBI. It should be careful about investment companies like LICHF/LIC , any other Govt mutual funds and companies running mutual funds . They should be allowed to purchase specified % of their own shares / sister companies share in the maket thus making them not to increase artificially the price of their company share and sell at higher price and purchase at lower price later. Since money power is there, the down fall is with retail investors who looks for gains and could not tolerate the loss.
- There should be uniform value for shares. Let it be Rs.1/- or Rs.10/-. Since now illiterate and low and middle income groups also slowly shows interest in investing, it is better to have uniform face value for the shares so that investors are not misguided and purchase any share thinking that the face value of the share is Rs. 10 though it is only Rs.1/- or Rs.2/-. If necessary, in order to reduce the value of shares, let the companies declare bonus and reduce the value. This is also one of the important amendment needed for the improvement of indian stock market as India is still a develping country and has nearly 40% illiterate living.
- Daily publishing of purchase /sale of shares of all mutual funds/financial institutions in companies are to be published openly. SEBI should ask them to attach their expert opinions also in short form which prompted them to purchase or sell which will make every thing transparent. This will send shivers in the fund managers who play pubic money for a fee and take risk of public money thus profiting themselves.
C.R. Venkata Ramani