However, not all see the possibility of Mukesh and Anil smoking the peace pipe. The situation is hypothetical and theoretical in nature and can only happen in a fiction movie, Nexgen Capital’s Equity Head Jagannadham Thunguntla said. However, if this happens, both the brothers can concentrate their productive energy together operating with each other. The groups have evolved considerably since the days of demerger (in 2005) and it is much bigger than the size of Reliance during Dhirubhai Ambani. So, if at all this happens, it would be a good thing for the shareholders, he added.

1. [January 21, 2009]
WHAT MARKET WANT AND DO NOT WANT AGAIN IN 2009?
January 16, Jan 16, 2009 (Asia Pulse Data Source via COMTEX) --
After a year when one and all fell like nine-pins with an overall loss of close to Rs 40 trillion on Dalal Street ? be it
mighty corporate giants, suave foreign institutional investors, local stock brokers and high net-worth individuals, cash-
rich mutual funds or small time retail investors ? There are many things that the stock market do not want to see
again in 2009 and these are more than those things that the market actually wants this year.
Be it corporate battles such as that of Ambanis, collapse of global giants like Lehman Brothers, Mumbai terror strikes,
Satyam-like corporate governance fiasco and then the corporate fraud, skyrocketing inflation and then risks of
deflation, massive layoffs, ballooning interest rates, acute credit crunch and pitfalls of coalition governments having
seen all these unfold during 2008, investors do not want any repeat this year. Even if some of these can not be
wished away, the market experts believe that investors would certainly feel relieved not to see again these and many
other dreadful events that made 2008 certainly a forgettable year.
Household names such as Tatas, Birlas and Ambanis, on whom small investors banked with their eyes shut, proved
no guarantee for the safety of investment in the market where cumulative wealth of all listed companies got eroded by
over 50 per cent during the year.
And analysts are predicting more troubled times ahead - at least till the first half of 2009. The industry’s who are a
part of the club where each member lost tens of thousands of rupees during the story of boom to bust, but the misery
of lakhs of individual and small investors is manifold more.
The lure of the stock market pulled in millions of investors during the boom period but for an overwhelming majority
the story ended as a futile chase for a gold mine. Baffling the investors and analysts alike, the market that started the
year with benchmark Sensex touching an all time high of 21,206.77 points, began melting from mid-January in
tandem with global bourses on weak cues from the US subprime crisis that surfaced late 2007.
It was like a puzzle, even for the government which tried hard to re-instill the confidence in investors by saying time
and again that fundamentals of the economy and market are good and they should not resort to panic selling.
Losses galore for one and all
What could make it even more painful is that observers of the market, which has registered a full-year fall for the first
time in seven years, do not see any immediate respite from the meltdown. In the process, the total value of investors?
holding in Indian stocks fell to just about Rs 30 trillion as the year 2008 drew to a close, from over Rs 72 trillion at
2007-end.
This included promoters taking a hit of more than Rs 20 trillion on their stock wealth, while foreign investors emerged
as the second biggest loser class with a plunge of close to Rs 10 trillion on their portfolio. Though smaller in

2. comparison to the larger investor classes, retail investors also lost close to Rs 5 trillion which is possibly their biggest
ever single-year loss. Stung by the sharp erosion in their wealth, foreign investors pulled out more than $13 billion
from the Indian stock markes which is nearly three-fourth of over $17 billion they had invested in previous year. On
domestic front, the mutual funds saw their wealth plunging by nearly one-third or about Rs 1,50,000 crore (Rs 1,500
billion).
While a reunion between warring Ambani brothers Mukesh and Anil tops the wish list of lakhs of investors, who had
to suffer heavily in 2008 because of the fight on issues ranging from MTN controversy to gas dispute, there are many
other events they want to forget as a bad dream.
These include high inflation, surging crude oil prices, corporate governance issues emerging from Satyam’ss aborted
bid to acquire two firms promoted by its chairman’s family, Mumbai terror strikes and subsequent political tension with
Pakistan, Singur controversy, ballooning interest rates that made credit a scarce commodity and huge cost-cutting
exercises adopted by the companies. Besides, there are the global factors such as worldwide credit crisis, fall of
Lehman Brothers and many other global giants, crash in the market, need of bailout packages from the governments,
over-dependence on ?hot money? or excess-leveraging for loans, and also a Madoff-like scam.
?If God is going to ask for a single wish, I think everybody across the world, irrespective of the caste, creed and
culture, would wish that 2008 is not to be repeated in their lifespan,? Taurus Mutual Fund?s Managing Director R K
Gupta said. ?It was a year of mayhem for the world economy and capital market in particular,? he added.
Gupta listed out need of a bailout package for any sector, inconsistency in the government and central bank policies,
Satyam/Pyramid Saimira like issues, production cuts/plant closures/layoffs, media interference in investment
decisions and over-dependence on leveraging as some of the things that investors do not want again in 2009.
KPMG Advisory Services Director Jaideep Ghosh named some of such issues as the high inflation, oil price surge,
lack of corporate governance by promoters and boards of directors, such as in the case of Satyam-Maytas fiasco and
political tension with neighbouring countries that lead to economic impact also. According to him, other issues that
investors would not want to be repeated this year would include credit crisis, Lehman-like fall, Singur controversy,
market crash and Mumbai attacks. Brokerage firm SMC Global’s Vice President Rajesh Jain said that his wish list
would include stable oil prices, interest rates under control, no layoffs and a stable government. ?With the elections
coming in next few months, I do not want a coalition government,? Ashika Stock Brokers? Research Head Paras
Bothra said. Other things that investors do not want in 2009 would be inflation hitting double-digit again, credit crunch,
collapse of banks, developed economies falling into recession and a broker scam in the country, Bothra added.
Kejriwal Research and Investment Services? Arun Kejriwal said he does not want commodity prices to rise again in
2009, ?because when the bubble bursts, it hurts the most. I want a more or less range-bound price regime as neither
a rise is sustainable nor a fall.? ?I do not want anything that would cast its shadow on the economy. Nobody is
expecting anything great this year, unlike 2008 when expectations were running riot. Hence whatever will happen will
happen for good and much better times await in 2009 as the negatives are mostly over in 2008,? Jain noted.
Can Ambanis unite again?
However, one of the most-wished issues, even if it appears utopian, is for Mukesh and Anil Ambani to bury their
differences and come together in the new year to create an unmatched business empire. The year 2008 saw the
rivalry between the two reaching new levels with Mukesh-led Reliance Industries allegedly putting a spanner in Anil-
led Reliance Communications? plan to merge with South African telecom major MTN, Anil Ambani filing a Rs 10,000-
crore defamation suit against Mukesh and court battle over gas dispute between them making no headway.
With their cutthroat rivalry being seen as the biggest roadblock in the growth of the two groups, some market
observers believe that probability is almost nil for a truce, others actually see a possibility, but almost all believe that it
would be the ultimate gain for the investors if they ever call it quits.
My wish list for investors’ benefit is topped by a truce between Ambani brothers. Investors have seen it all and the
warring brothers have seen wealth destruction. It is time for them to call a truce, SMC Global’s Jain said. Ashika

3. Stock Brokers Bothra also agreed: ?In one word, it would be positive for investors. Although in the present situation, it
does not seem likely.? Some others see quite a possibility of the two brothers breaking the bread together. One
should not rule out any possibility, especially after the Bajaj brothers having reached a kind of settlement, Kejriwal
noted. There is a possibility. Nothing can be ruled out keeping in mind the investors expectations, he said.
However, not all see the possibility of Mukesh and Anil smoking the peace pipe. The situation is hypothetical and
theoretical in nature and can only happen in a fiction movie, Nexgen Capital’s Equity Head Jagannadham
Thunguntla said. However, if this happens, both the brothers can concentrate their productive energy together
operating with each other. The groups have evolved considerably since the days of demerger (in 2005) and it is much
bigger than the size of Reliance during Dhirubhai Ambani. So, if at all this happens, it would be a good thing for the
shareholders, he added.
Hope is the word on street
Though the equity market losses have been astonishing, some signs of recovery can be seen at the end of the tunnel
as Kejriwal said: Recovery will happen only after the markets have reconciled to the slowdown after December
quarter results are digested. Similar thoughts were echoed by Chakraborty as well: Flow to India will be affected
negatively over the short term, but with dollar weakening, investors will soon start borrowing in dollar and investing in
non dollar emerging market asset class. India will get a positive FII flow in 2009. Today large cap blue chips are
available at trough valuation. One should build a portfolio as it is reasonable to believe that the market will be 20,000
in three years that is still double from the current level. Naturally individual stocks could return more than 100 per cent
in 3-years.? Bothra also noted that low valuations of blue-chops was certainly going to attract long-term investors,
although any major surge in the markets might not be seen during 2009. One message that was loud and clear from
the year 2008 was that the decoupling theory was just a myth. In the worlds financial architecture, emerging markets
especially India is very much integral part of the structure. India as a country, is not immune from the disease.
However, we will recover faster from the disease.