There are two points of view in the market today. One, the plethora of initial public offers within two weeks has pulled down the entire market. Market watchers had been predicting that the fresh paper will suck out liquidity from the market, making it fall in the short to medium term. Two, that the current downtrend is because of a bear cartel, as alleged by the Government. IPO overcrowding or bear hug, the Sensex is nearing the 5,500-levels and the volatility continues, making the already nervous small investor skittish. The poor listing performance of Patni Computers is not making them feel any better. Those who had taken the bank credit route to apply for the issues are seeing their transaction costs higher than any short term gain. On the first day of listing, the stock had gained just one per cent on its offer price. The market situation makes one wonder whether it was a right move by the government to offer all PSU shares within a span of two weeks, that too so near tax-saving investment time, when people are anyhow short of liquidity. The government may be able to sell shares but the falling market has once again shown that it failed to get the peak prices for its shares. IBP share is now trading at almost Rs 665 levels and an investor can buy shares from the markets without bothering to block his money for a month to buy shares at the rate of Rs 620. The merchant bankers must take much of the blame for ill-advising the government for this mess. Now till the elections are over, the share markets will remain in the bearish territory. To sell the shares right before the elections does not seem like such a good idea after all. One wonders what the finance ministry was doing. It was taking the credit when the share market was shining and it was caught napping when the markets tanked just before the pricing of the issues. The performance of market regulator has once again shown that in spite of being on 'high alert' it has not been able to prevent the cartels from operating. The market is very volatile, small investors should go for value buys and stay off any short term punting in the market.
