The Telegraph
Since 1st March, 1999
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Mumbai all ears for PC’s ‘India story’
• Stock market greets Chidambaram with a nearly 90-point rise
• Foreign investors begin to buy again
• After chat with minister, a big player turns bullish
• Chidambaram talks to large brokers and bankers
• Today, foreign investors and industry leaders meet him

Mumbai, June 2: P. Chidambaram today became the first finance minister in living memory to rush here within days of taking charge under a new government to calm jitters, appearing to have made some progress in the initial hours of his visit.

“I have come to the financial capital at the first opportunity to meet key economic players in the market, including bankers, financial institutions, stockbrokers and corporations,” the finance minister told the media waiting outside his hotel facing the Gateway of India.

Immediately after attending the opening session of the 14th Lok Sabha, Chidambaram flew to Mumbai and into a pleasant — though not quite red-carpet — welcome as the Bombay Stock Exchange sensitive index moved up close to 90 points to end the day at 4923.69. It was the second consecutive day of a modest turnaround by a market roiled by fears about the fate of reforms and external factors such as world oil prices and withdrawal of funds by foreign institutional investors from emerging markets like India.

“The purpose of my visit is to tell players that the government is committed to reforms. The overarching objective is to place India on a growth path of seven to eight per cent and this must be done subject to fiscal prudence,” the finance minister, reluctant to speak, said after ending his meetings around 9.30 pm.

Leading brokers like Motilal Oswal, Vallabh Bhansali of Enam and Ambarish Baliga of Karvy Stockbrokers met him. Emerging from the talks, the brokers said they had argued for a market stabilisation fund akin to what already exists in Japan and Hong Kong.

Baliga said: “We discussed the concerns of the market and the recent upheavals, including the crash of May 17 (when the market fell by over 500 points) and pointed out the loss to retail investors.”

A market stabilisation fund can step in to lend support at times of crash.

Chidambaram, who met bankers too, refused to comment saying: “This is not a press conference. For obvious reasons, I am not making a detailed statement as the Parliament session is on.”

Brokers also pleaded with him to continue the tax exemption on dividend paid by companies and mutual funds.

The minister termed his meetings a part of the pre-budget consultation process, which, discontinued by his predecessor, has resumed. But the objective clearly was to tell the market that this government was not about to hoist the red flag atop Jeejeebhoy Towers, which houses the Bombay Stock Exchange.

“Through this visit, I hope I can allay any apprehension amongst key economic players and I hope that it will increase the confidence among them,” he said.

“Confidence” levels seemed to be rising already. One large foreign institutional investor, JP Morgan, renewed its faith in the “India story” after a chat with the finance minister on a conference call.

More such interactions are lined up tomorrow when Chidambaram is expected to meet several such investors, who were initially rattled by statements from the Left against privatisation.

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