Vested with interests?

The outgoing chairman of the Securities Exchange Board of India, M. Damodaran, has placed in the public domain an issue that must concern us all. In an interview on 8216;Walk the Talk8217; text on today8217;s op-ed page, he sought focus on tackling the problem of 8220;anchor investors8221;. The media, especially television, is currently teeming with experts who dole out advice to investors on which stocks to consider and which to be wary of. Damodaran8217;s concern is that these persons are not being completely transparent while 8220;talking up8221; and 8220;talking down8221; stocks. He therefore highlights the need for ethical guidelines on disclosure of the financial interests of these 8220;experts8221;.

You do not have to be an investor in the markets yourself to know and feel the dangers posed by 8220;anchor investors8221; who may be manipulating interest in stocks. There is, of course, the danger that investors are being misled. Travel through India8217;s big towns and rural hubs and one can see the keen following for television programming devoted to analyses of the stock market. If information and advice are being deliberately manipulated to influence the buying and selling decisions of everyday investors, that is obviously criminal. And given the central place of stock markets in maintaining confidence in national economies, this kind of manipulation impacts not just actual investors, but everyone who has a stake in strong economic fundamentals 8212; that is, each one of us.

The debate begun by Damodaran must quickly lead to action. SEBI officials are said to be studying market regulation in other countries, especially the United States and Britain. But the media should look within too. Self-regulation by the media is essential for it to meet its responsibilities as a watchdog. Damodaran8217;s words should be a wake-up call.