Indian markets not in serious bubble territory: Uday Kotak
Uday Kotak on Wednesday said Indian markets are not in a bubble. There may be some «early froth», and it may be a «little bubbly» but the markets are not out of control, Kotak said, speaking in the presence of top officials from Sebi in a conference organised by the capital markets watchdog.
The statement from Kotak, the founder and non-executive director of private sector lender Kotak Mahindra Bank, comes two days after Sebi chairperson Madhabi Puri Buch had said that there are pockets of froth in the small and mid-cap stocks and the regulator is looking into the same to come out with a possible consultation paper.
«It may not be appropriate to allow the bubble to keep building, because' when it bursts, they impact the investors adversely. That is not a good thing,» Buch had said.
Reacting to it, Kotak quoted economist John Meynard Keynes who spoke about speculation to be not a bad activity per se and also mentioned about the bubble in Japanese stocks between 1980 and 1989, saying the benchmark Nikkei has been able to regain its peak, only 35 years later after the bubble burst.
«I believe at this stage, we are nowhere near that risk and there are enough checks and balances in our system today to compare ourselves in serious bubble territory,» Kotak said.
There may be «early froth» in the market and it may be a «little bubbly», Kotak said, pointing to Buch who was seated close by, but added that things are not out of control.
«As long as we keep watch and manage it well, we can create sustained capital
