Indian Stock Broking , Broker..Broken?

The days pass slowly.
The south Mumbai air is now recording record density with the usual smog, grime, humidity now diffused with record levels of hope and longing. .the hope to recover some notional loss( we all know this is notional and temporary and markets will recover, so why the long face)..the longing to ride a bull move again..aahh, that was a feeling.

Every day the stock broking community awaits deliverance from this irrational and unexpected behaviour which has laid many a careful expansion plan to waste.
Just yesterday these Broking Houses(House sounds cool) were on recruitment sprees to fill every corner of India with necktie wearing executives to spread the gospel. The race was on to claim the biggest valuation as news broke about clueless trains from abroad disembarking new age fund managers with big money who wanted in on the financial space.
The message was clear.. maximize retail accounts, retail reach, retail teams, retail investors, retail traders..anything retail.. and these monkeys would pump in a few hundred million(USD) for, umm.. 5-7 % stake in a Broking House.

The glee was palpable (those days the downtown Mumbai air was thick with glee).

The local Broking houses pumped up the volume on recruiting anyone who owned a necktie and exhibited leadership qualities..as also those who owned a necktie and had a pulse.
There was a recruitment frenzy where assorted executives, tourist guides, bar tenders, waiters, fortune tellers, snake charmers etc. suddenly found themselves appointed Relationship Managers and other lofty Managers at leading Broking houses.
More offices, more managers, more accounts, more potential, more valuation and more More.

To be fair it wasn't the local brokers and broking firms fault, they suddenly caught the fancy of the global money managers and alpha seekers. These unassuming folks were just going about minding their business when this herd let loose the fun fest on them.

And then the bulls failed them..the bulls, they just failed.

Today's press.. the accountants can't cook these books any further. These fine equity cult spreaders look a little spread themselves. Make no mistake, it is bad when your accountants can't find growth and earnings as per your expectations..and start mentioning unmentionables like writeoffs and provisioning and recognizing losses..this almost sounds like we got the SEC here to replace the doddering, rupee challenged fools of SEBI !!

As some old timers noted, if this disturbing behavior is not dealt with promptly and firmly the Indian investor might soon even start asking for transparent accounting !!

Sample this from the above article..

"At least four top brokerages — Religare Enterprise, Edelweiss Capital, Emkay Shares and Stocks and Modern Securities — have delayed their fourth quarter results."

..these Popes of the equity religion who spread their gospel through evangelical TV and branch networks far into the countryside are increasingly spending less time on TV and more in their offices to prod the accountants to fix the mess and get on with the growth numbers. As any faithful can vouch..you never question the Gods..you keep the faith.

After all they have not been pontificating(so knowledgeably) on TV and other media about corporate growth, prospects, results, earnings,etc. so that the unwashed plebians could start questioning their companies' results or when they should announce the same. Altruistic Missionaries have never had it easy.

But the faithful hordes are now behaving like panicky hens instead of the predictable flock and though they(Broking Houses') quickly explained quite clearly that each had a totally different (and valid) reason to delay the results..and the fact that four of them happened to be in the same sector is a random occurrence to which no weight need be assigned..this obtuse market is increasingly hard to convince.

Actually, I think the overseas cognoscenti with the (previously identified) foresight and extrapolative tendencies may be the only believers who actually are still be patting themselves for their valuation due diligence and quick deal making that proves their mettle.

The natives for the most part lack vision..and that is destiny.