INDIA COULD BE ONE OF THE BEST PLACES TO INVEST IN FOR MANY YEARS TO COME, AFFIRM PANELISTS

What happens when you put the India heads of two large Wall Street banks, two entrepreneurs who've founded and run popular brokerages and two fund managers who manage crores of investor money in one room? You get sharp insights, wry humor and an affirmation that India could be one of the best places to invest in for many years to come.

All this and more happened one Thursday morning, when the top capital market experts came together, with Ramesh S Damani, a well-known face of the stock broking community in India, as moderator. The current state of the financial markets, enunciations of Budget wish lists and suggestions on how the stock market could be made more efficient, flew across the table over cups of tea.

Setting the agenda by an appropriate quote from Kahlil Gibran: "Progress lies not in enhancing what is, progress lies in enhancing what can be," Damani steered a discussion that saw participants apparently unfazed by the recent turmoil in the market and foreign funds continuously pulling money out of India. "When you drive the boat very close to the coast, you see the zigs and zags in the coast," said Narayan Ramachandran, MD & country head of Morgan Stanley, evocatively referring to the daily net sell by foreign funds. "But when you look at it from above, it is pretty much a straight line," he reminded the gathering.

However, there was a consensus that corporate earnings have been slowing down. Pankaj Vaish, managing director at Lehman Brothers put a number to 18% deceleration over the next couple of years and a further deceleration from there. In spite of that, though, he felt the market was attractively valued.

The state of the derivatives segment also spurred many comments from the participants present. While Motilal Oswal said that the current payment system is only geared for normal days but not for extraordinary ones, Rashesh Shah of Edelweiss Capital said that the need of the hour is to make the market more "heterogeneous" as only this will erase the "one sightedness" among current investors.

On how the government can lay the road map through the Budget, Tata Mutual MD Ved Prakash Chaturvedi, was for disincentivising short-term trading, while Ramachandran wanted big priority for the developing bond market and Gaurang Shah of Kotak Life Insurance bet that a change in tax on the physical infrastructure side was likely, while on social infrastructure side, he wanted investments in education.

With numbers and prognostications flying about, Damani parried a query on a one-year Sensex target with a light aside: after Albert Einstein died and reached the gates of heaven, St Peter asked him to temporarily share lodgings with three others till he was allotted space. St Peter introduced the room-mates by their IQ levels. As two of them had IQs of over 200, Einstein decided to discuss his theory of relativity and global warming. St Peter then pointed to the third person and apologetically said he had an IQ of just 60. "No problem," said Einstein, "We can discuss where the stock market is headed." QED!