Date:26/07/2005 URL: http://www.thehindubusinessline.com/2005/07/26/stories/2005072602980100.htm

Back Stock markets have not outpaced economy, says SEBI Chairman

Our Bureau

SETTING THE PACE: (From left) Mr M. Damodaran, Chairman, Securities and Exchange Board of India; Mr S. Behuria, Chairman, Indian Oil Corporation & Chairman, SCOPE; Mr V.S. Jain, Chairman, SAIL; and Mr S.M. Dewan, Director-General, SCOPE, at a meeting in the Capital on Monday. - Kamal Narang

New Delhi , July 25

THE latest run-up in the stock market indices is not indicative of an over-heated capital market, the Securities and Exchange Board of India Chairman, Mr M. Damodaran, hinted on Monday.

"I think what the Finance Minister said was that if the stock markets do not outpace the economy, then there is no concern. I believe as we speak today there is no evidence to support any view that the stock markets have outpaced the economy," Mr Damodaran told newspersons on the sidelines of an interactive meeting with the chief executives of listed public sector enterprises.

The SEBI Chairman's comment came in response to the questions raised by newspersons on whether the stock markets were over-heated at the current Sensex level of over 7,500 and if investors should be wary of undue exuberance, as stated by the Finance Minister, Mr P. Chidambaram.

The Sensex has gained nearly 200 points over the last two trading sessions of July 22 and 25. Mr Damodaran also underscored the need for "good quality" issues and "repeat offers" in the domestic capital market to absorb the increased inflows rather than looking to raise capital abroad.