Concern for small investor is mere lip service

Big is now beautiful. It is the big, or institutional investors, whose actions sway the markets. Last week, the markets swung 50 to 60 points each way on three consecutive days largely under their influence. The BSE Sensex finally ended the week down 126 points, at 6,479.
Some examples of this disfavour to small consumers or investors: In the telecom sector, the government switched over from a high license fee regime to revenue sharing one, from individual licenses for different service to a universal licensing regime and has allowed operators to take over others as also to hike foreign investment limits.
The last two decisions help the operators fetching higher valuations.
But, Trai must quickly introduce ''number portability''. The sector has grown at a laudably fast clip, thanks to a lot of initiatives taken, especially in allowing freer competition which has helped bring down telephony prices to an all-time low.
But introducing number portability, Trai will signal that it cares for consumers and for their satisfaction and not only for the operators.
In the airline industry, it is the absence of competition that is harming the consumer. This, in turn, is based on the apprehension of security concerns, or, maybe on the pretext of it.
As a result of two factors — absence of competition and high operating costs — it is the consumer who suffers. It is cheaper to fly Air Sahara from Mumbai to Singapore than Mumbai to Kolkata, indicating that factors other than distance play a role in pricing. That is, absence of competition.
Small investors in IPOs are also given stepmotherly treatment. First, is in the need to pay full money on application whereas QIBs pay nothing, encouraging overbidding. Second, is in the freedom to price the issue a day before opening, which, as recently seen, can lead to a sharp spurt in price before and a sharp slump after the IPO.
The market is trying to shake out weak holders. It still seems to have steam in it. Buying fundamentally strong shares would be advocated, on dips, though with one eye on the monsoon forecast and another on the US housing market, whose collapse can cause a financial meltdown.