The Insider Den

-- D. Satish

The recent scams have transformed overnight the Dalal Street's Blue-eyed boys into rogue traders. Given the notorious ubiquity of insider practices, it isn't wrong to equate them with the Insider Dens. The dens where you can get `anything' done for a price. You could be an IPO wannabe, a merger candidate, a prospective issuer in overseas market et al. Such is the state of practices that they have become the normal course of business. The recent scams are but ugly exposures of rogue deals, which would have gone undetected otherwise. What the present crises prove is that a decade of reform failed to prevent the recurrence of scams. Making the market a safer place is the biggest challenge to the regulators. Thanks to the scams, the focus now shifts towards the much-needed introspection. The following pages chronicle the different faces and phases of insider trading.

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Spotlight

Colluding for a crisis

--  D. G. Prasuna

Co-operative banks, an offshoot of the co-operative movement have expanded by leaps and bounds over the last decade. However, the regulatory environment and the other systemic controls are yet to be put in place thus leaving them as a vulnerable point in the financial system. They seem to be a dark spot that could be exploited with little difficulty.

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Case Study

Morgan Stanley-Dean Witter Merger From MSDW to Morgan Stanley?

--  D G Prasuna

Four years have passed since the merger of Morgan Stanley and Dean Witter but the distinctions of each are yet to be blurred. Though the new name Morgan Stanley seemingly proclaims a single entity, the conditions inside the company's doors are far removed from that. However, there are certain indications of a change for the better.

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Financial Markets

Bearish blues

--  Debasis malik

As the US stock market topples and the economy sputters, the financial seams of the major emerging markets have begun to rip. There is growing anxiety in financial markets. Is the world heading for a recession?

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Tailoring risk and return

--Aparna Mehta

Of late risk management has become the focal point of discussion amongst the portfolio managers. The investment management industry needs to recognize that its global ambitions, significantly exceed its capabilities. To fulfil them, they need to revisit the issue of risk management.

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Business Environment

QR Phaseout New vistas

--  N Janardhan Rao

Liberalization of trade regime can trigger an aggressive approach towards exports. The removal of QRs is bound to have a positive impact on the economy. This would help Indian economy make great strides towards more globally competitive economy.

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QR Phaseout : Competition vs. protection

--  N Janardhan Rao

"Indian industry should be ready to take on competition with minimal protection. In fact, the Government should have abandoned its "populist" economic stance much earlier, to provide opportunities to these units, especially after becoming a signatory to the WTO." Says, Dr. A S Harish, Senior Officer, The Vysya Bank Limited

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Corruption Who will bell the cat?

--  Dr. Ajit Kumar

Gunnar Myrdal, in his famous treatise, "Asian Drama - An Inquiry into the Poverty of Nations", aptly described the political and economic dangers of corruption.

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Corruption Economic roots

--  Dr. Ajit Kumar

Corruption has economic roots. Corruption in government contracting, in the award of licenses, and in the privatization of state enterprises has been prominent in India, says Susan Rose-Ackerman, the Henry R Luce Professor of Law and Political Science, Yale University.

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Corporate

Hindustan Lever Ltd. On the efficiency frontier

-- D Satish

HLL is one of the few companies, which has bettered the market expectation. A closer look at the company shows what makes it perform consistently year after year.

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Financial Services

ICICI Consolidating gains

--  Y. Chandra Sekhar

After expanding its operations through a number of subsidiaries, the tech savvy ICICI is presently consolidating its subsidiaries. The present strategy may be to take ICICI closer to its vision of Universal bank.

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Perspective

Hedge Funds The long and short of it

-- Aparna Mehta

As the stock markets around the world tumble the hedge funds are lying low. The retreat only confirms their peculiar nature; they put their best show when they are small and nimble. It is the days of big daddies in the investment management industry that could be numbered.

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Debate

How to Handle Tech-Led Recession

The word "recession" is haunting America and hence the world. With the tech-led industry enduring its first bear market most of the firms are in utter distress. Economists assert that the US is heading towards a recession after a long and excessive boom. Implications of the mainstream analysis espoused by most central bankers view that there is something like a normal degree of resource utilization level above which the economy is likely to get accelerating inflation. During a boom, rapid money supply growth feeds directly into higher output and higher asset prices, thus temporarily disconnecting the link between money and inflation. The ongoing tech-led recession is different from the earlier recessions, led by the manufacturing sector. In this case, the investments of the financiers were typically on software packages, paying salaries of employees, marketing and other intangible services. Suddenly, when the bubble burst and the firms disappeared, the financiers were left with nothing to recover. It is true that the tech-led recession in the US economy is fundamentally different from earlier recessions led by the manufacturing industry. The question is how to handle such a recession?

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