Sunday, October 18, 2009

Raj and the local market

The story of Raj Rajaratnam's arrest was all over todays newspapers. Given the dearth of news that can be reported this story has provided much gristle to the media mill. Everyone, it seems, has an opinion to air or an axe to grind.

Nevertheless it was rather amusing to see the reaction of an official of the (local) SEC: "In the general sense of things we need to probe and find out whether any of the transactions Rajaratnam was involved were questionable, said an SEC official, who declined to be named. “There haven’t been any issues in the past (over his investments) but due to the new developments it is incumbent on our part to look at these issues afresh”. (from the Sunday Times).

Anyone who has any insight into the Colombo Stock Exchange will tell you that the local market runs on a healthy dose of price manipulation with more than a dash of insider trading thrown in. I believe the problems to be so rampant that investors here would be better served if these activities were decriminalised and the SEC disbanded with the resultant savings in costs passed on the investors in the form of lower transaction costs.

A body which allows the listing of Ponzi schemes on the market does not deserve to exist and apart from the persecution of innocents such as poor old Michael Mack who was hounded to his grave I have not seen a great deal of value added to investors.

Anyway, for the adventurous, tomorrow should be a good buying day.


sittingnut said...

let me get this straight - you want price manipulation and insider trading in cse to continue ?
whether sec is effective or not is one thing, approving price manipulation and insider trading is another.
but then one needs integrity to see the difference.
thankfully you have a history of calling things wrong, don't you ? lol

Hasitha's Alter Ego said...

Adoh Hasitha we love the way you hide behind this anonymous blog. Clever you are

Jack Point said...

Sittingut, if you can't beat 'em, you may as well as join '

Graeme said...

If you are going to legalise price manipulation and insider trading, why not legalise other common practices such as fraud on the minority and false accounting?