Market trajectory

This refers to ‘What do past bull markets indicate about the current rally?’ (August 30). The ongoing rally in the Indian stock market indicates a gradual decoupling from global influences, with the impact of US Federal Reserve monetary policies now less significant than before.

The sharp corrections that followed the Harshad Mehta scam were largely driven by market manipulation. In contrast, the market’s rise in 2003 was supported by strong fundamentals, though the subsequent correction was due to high valuations, as shown by elevated PE ratios. Since the Covid-19 pandemic, the market has experienced a sustained bull-run. While timing the market is inherently challenging, historical trends suggest that the current PE ratio being close to the 10-year average and the price-to-book ratio remaining within reasonable limits provide a supportive backdrop for continued positive momentum. SEBI’s proactive measures to curb speculative activities, including restrictions on F&O trading and stricter oversight of mutual funds through AMFI, contribute to market stability. With valuations staying within acceptable range and a consistently expanding domestic investor base, assuming no major fraudulent incidents, the market is well-positioned to continue its upward trajectory.

Srinivasan Velamur

Chennai

Privatisation of banks

Apropos ‘Bank privatisation — best avoided’ (August 30), the stability and certainty of banking, anchored in state ownership, is no small relief to a large percentage of our huge population.

Rather than arguing for privatisation of banks, the authorities should focus on better governance practices and improving customer services of public sector banks for others to benchmark their performance to. Better than one-off benefit from divestment, the government can ensure systemic stability as also reap dividends from the business of banking by setting better standards.

Jose Abraham

Vaikom, Kerala

Not a panacea

The failure of some major private banks in the US and with the kind of bullish valuation most of the public sector banks in India enjoy, it would be tempting for the government to privatise some of them. But it should be on a case-by-case basis as privatisation is not the panacea for all the ills plaguing the banking sector. If that were the case no private bank would have gone bust — YES Bank and Global Trust Bank, for instance, had to be bailed out.

Bal Govind

Noida

RBI rises to the occasion

Apropos ‘RBI warns public about unscrupulous elements using various methods to defraud them’ (August 30), the central bank must be lauded for effectively cautioning the public against fraudsters clandestinely using its fake letterheads and fake email addresses, impersonating its employees, and luring people with a whole lot of fictitious offers. Notably, the RBI has quite aptly reiterated that it does not maintain any account in the name of individuals/ trusts/ companies in India to hold funds for disbursal.

However, it is really unfortunate that despite the RBI constantly forewarning one and all through various social media platforms, a large number of people continue to fall an easy prey to the dirty tricks of these fraudsters.

Kumar Gupt

Panchkula (Haryana)