Sebi wants investors to be on the guard

Market regulator Sebi, on Monday welcomed the bull run-in bourses after sensex crossed 7,500 points but, cautioned investors to take informed decisions for getting a reasonable return from their investments.

Sebi chairman M Damodaran, who was here for attending a workshop of standing committee on public enterprises, dismissed the notion that shares were over-priced.

"There is no evidence to support the theory that stock markets have outperformed the economy," he said, indicating that the fundamentals of the companies were sound and that it was reflected in the prices of shares.

Finance minister, P Chidambaram had stated last week that he would not be concerned as long as Sensex does not outperform the economy.

Damodaran, however cautioned the investor community to take informed decisions for getting reasonable returns from their investments, even if the market was witnessing a bull run.

"The Sebi message to investors is, informed investment decisions will give reasonable returns," he said.

Damodaran also rejected reports that the share of retail investors in the market has come down in the last few years, while the presence of foreign institutional investors (FIIs) have gone up.

"It does not indicate that retail investors are going out of the market. But, retail investors are not coming into the market. Some might feel that the level (Sensex) is too high," Damodaran said.

He added that with the kind of money that was coming into the market, there are not many shares. He was also not happy with the kind of shares that were available in the market.

The Sebi chief was unfazed at the surge in FII inflows, but chose to be cautious. "We will get all the information (on FIIs)."

With the proposed integrated market surveillance system coming up early next year, he said, "This (monitoring fiis inflows), will be much much better."

Rs 1041 cr flows in from FIIs on Friday

The foreign institutional investors (FIIs) were net buyers of Indian shares to the tune of Rs 1,041 crore on Friday. This was the tenth largest single day buying by FIIs since the beginning of this month.

According to dealing room sources, Japan-based funds are aggressively buying into Indian equities. FIIs' fancy for Indian papers touched a new four-month high with net investments of $1.28 billion in first 15 trading days of July.

The largest ever single month inflow was recorded in February 2005 when FIIs were net buyers of shares worth $1.91 billion.