THE VOLATILE AND ERRATIC SHARE MARKET & THE SAMLL SHARE HOLDER.

1. When huge capital is to be raised, Joint Stock Companies are best suited. Any body and every body can invest and take part in it. That also is the intention of Government. But every effort of the Government, results in keeping the small investor away. Take for instance, the rule IPO’s can be appllied and shares can be traded only through DEMAT Accounts. The facility and intention is very Good. But how many small holder can afford to have a demat account and also pay Annual Maintenance Charges? It ranges from Rs.300/= to R1500/- Alright I open one Demat Acount, I have four Children and wife, I have to nominate because I am already 70. As per present rules there can be one Nomination for One Demat Acount. I have to open 6 Demat Acounts? Who will pay the charges. My Dividend Income cannot even meet the AMC. Why not allow multiple nominations, allowing to declare the share of each Nominee? According to SEBI or rather Law Makers heaven will fall. All short sighted views which will only go against the very intentions of the Government. Every Step of the Govt. acts detrimental to its intentions puts lot of strain on investors. In spite of these the Caravan as ever..

2. Another vexing problems for the Investors is the high and unreasonable Premiums fixed for IPO.s and right Issues. I do not know who invented this Premium Business. I think it is of recent Origin. First of all Why premiums for an existing Share Holder? It is he who has built up the Company, all the reserves are created out of His Profits which he could have eaten & swindled away but ploughed back. For Saving &accumulating his own wealth he has to pay premium and BUY?. Next let us go to the mechanism of Premium Fixation? Even a Reputed Entrepreneur like Reliance (Reliance Power) erred miserably. The issue PRICE WAS Rs.430/- (Face Value Rs.10/-) and it is presently quoted around Rs.150/-, Even Government wants unfair enrichment. So much premiums are fixed while diluting their interest, next it is sold much below the offer price. The Share Applications give all unwanted details. In a nutshell they won’t spell profits for the past few years, true picture about future Prospects and returns. Share prices are so volatile and Erratic. Deccan Aviation (Now King Fisher) Issue Price Rs.150/- Present rate Rs,50/-

3. MARKET PRICE & RETURN ON INVESTMENT & VOLUMINOUS REPORTS..

The Market Price is so volatile, erratic and unpredictable. We cannot understand how the mechanism works. Its is clear that it is not Supply & Demand and something else. What is that something else, one Harshad Mehtha or a Bundle of such persons? When there is not much change in the fundamentals or Environment or Future Prospectus, how a Share can be quoted in April,2009 at Rs.158/- be quoted at Rs,442/- in March, 2010? (Canara Bank) Has the Bank all of sudden incurred such a heavy loss to sell as low as R158/- or has its fortune become so great to sell at Rs.442/- in just 12 months? I all the Banks in America become Bankrupt, How can it, & why should it affect a purely Indian Bank? Axis Bank, High 1215/- Low Rs.570/-, Bosch, 3173/ & Rs.5160/ Wipro, Rs.240/ & Rs.675/- Infosys, Rs.1517/ Rs.2800/- ABB, Rs.344/- & 850/-

4. Now let us leave the Share Price movement at that. Let us examine the return on Investment. We use to hear that Eat India Company a century or two ago used to give as high as 200 percent Dividend. It was great at that time. Today even if 600% dividend is given is it real? If you buy a TCS share of Re1/- Face Value at Rs.780/- and even if they declare a dividend of 600% you get Rs.6/- as dividend on an investment of Rs.780/- Are you interested in such investment unless you want to indulge in Speculation and Gambling try to make money? What a tricky situation. You are getting 8 to 12% return on Deposits without any risk. What about reward for taking risk? Should it not give another 5 to 10% extra return? How imperfect our Economies are?

5. BULKY ANNUAL REPORTS WHICH CONVERY NOTHING.
How many persons can read and understand the present day Annual Reports. It high lights every thing a Share Holder is not interested and in things like dividend declared, Current operations, future prospects, you have to use a magnifying lens and search for it., if you are lucky you can trace it in half an hour. How many investors are interested in things like Management Discussion and Analysis Report, Corporate Governance Report, Significant Accounting Policies, Notes on Accounts? Why not give it only to those who want it or need it? Why waste Paper, Printing and Postage? Added to this wastage, the Provisions of Official Languages Act, gives its own share to the Volume in Public Sector Institutions. Propagating Hindi is no doubt necessary and good, but Amitab Bachan and Hindi Films have done better job in Promoting Hindi than government moves. Why burden everyone who knows or does not know or interested in Hindi or Regional Language with Reports in three languages.. Why not print separate Reports in Hindi & Local Language and send it only to those who want it specifically. It will bring down the paper wastage by two thirds. With plenty of Amendments to Companies Act, and other Finance Acts, has the Frauds and Mis-managements come down? These are some of the Questions for which the Investor is unable to find answers. C.S.P. RAO.