2015 is set for a lot of changes – and some that we would like to happen…
It is the New Year when the young Bull promises to become an adult. It is the New Year when sentiments are going to be crystallised into reality. It is the year for market regulator U K Sinha to leave his mark on the Dalal Street before wrapping up his five-year stint at the BKC fortress that is the Securities and Exchange Board of India (Sebi). As I sit to try and cobble up a list of 15 things that you can expect in the market, there are things investors would ideally want to happen and things I actually expect to happen. Here’s a cocktail of both:
Indian Financial Code: Some top minds in the country worked to put together a comprehensive legislation that would help us make a better sense of the world of finance with better safety for the small guy has been gathering dust for over a year now. Let the New Year bring it to life.
Unified regulator: With the Forward Markets Commission coming under its purview, the finance ministry now has administrative powers over most of the financial sector regulators – Sebi, the Reserve Bank of India (RBI), Insurance Regulatory and Development Authority (Irda) and Pension Funds Regulatory and Development Authority. It is time to bring them all under one super regulator.
Some dilution in Clause 49: This clause in the listing agreement deals with the provisions related to corporate governance. Though this is not going to be a pleasant one for the small investors, some dilution or realignment with the newly amended Companies Act seems inevitable with respect to related party transactions. So watch this space.
New framework for IPOs: The much amended and tweaked initial public offering (IPO) framework is likely to be tweaked again. As primary market refuses to wake up, Sebi seems to be getting desperate to see it revive. But, that adage which applies to investors applies to the regulator too – the market can remain irrational longer than you can remain solvent.
Sensex at 30,000: Talking of irrationality, thankfully, it was on the right side in 2014. But, will it continue in the New Year? Well, I hope at least 30,000 is not a tall order… that’s only 10 per cent from where we closed 2014. I’m happy to grant you trolling rights if we don’t get there. What the Government has done so far doesn’t inspire me to stick my neck out for bigger numbers. Not yet, at least.
E-commerce IPOs: E-commerce has been the darling of big-bracket private funds. But the small guy on the street has been itching to join the party. With some local players becoming big enough, you might finally order for delivery of a hot stock. But don’t expect any great discounts on that.
BSE Listing: This one may not be as exciting, but Asia’s oldest bourse has been waiting for long to bring up its IPO. Note it has been in the works for over two years now. May be the old BSE shareholders will finally get their exit this year.
Regional Exchanges: Let us hope these relics of the past are finally wound up in the New Year, with proper migration of companies to national bourses and adequate redressal of investor issues.
Clean and Liquid SME exchanges: These exchanges today are a study in contrast with one hyperactive and other dormant. A middle path needs to be discovered in the New Year.
Accountable Analysis: The framework governing research analysts has already come into place in December. But from May onwards, these will acquire real teeth as vested interests can no longer take investors for a ride that easily.
Surprises in AGMs: The full impact of the new corporate governance regime, howsoever diluted, will be seen in its full avatar in the New Year. Be prepared for some of your favourite stocks getting upset by voting surprises.
Closure to the National Spot Exchange investors: Though it happened in a different asset class, several entities including brokers, investors and advisors who were hit by the Rs 5,600 crore (Rs 56 billion) scam were closely associated with the equity market. A quick closure to this mess next year will be a boost for sentiment and activity.
Pending cases of Big Boys: The pending proceedings against Reliance Industries in the 2007 case and court/ tribunal matters of Sahara and DLF should be brought to an end at least this year. Cases dragging on for years cause overhang on stocks affecting investors.
More Jailbirds: Sebi has begun cracking down on illegal money raising activities across the country. It has also used its new powers to send people to jail on one default. Will there be more? Quite likely. The list of people who have defaulted on penalties due to Sebi is a long one. These people had better be prepared with the penalty amount, or learn counting the bars on a cell, instead.
Real Divestment: This has been on my wish list every New Year. But the Government has hardly been able to fulfil it. Sometimes it is the LIC that comes to bail out, and PSU cross holdings at others. Let the new Government make it a resolve to bring a bumper disinvestment sale that leaves a smile on everyone’s face –investors, bankers, the company and officials.
And a New Year Bonus — A Big Bang Budget: If all the hype and hoopla of past seven months have to translate into something positive, the Finance Minister has to summon his best resources to present a truly inspiring budget. That will be the make or break moment for 2015.