The propaganda of economics

This piece of crap is being peddled on Whatsapp by chaddis:

“Is there an uneasy correlation between the number of gloomy, almost apocalyptic stories about India’s financial markets and the ugly fight that started off sometime last year between India’s National Stock Exchange (NSE) and Singapore Stock Exchange (SGX)? Methinks so. First, let me put forth the hyptothesis:

Bloomberg and Bloomberg Quint which are based out of Singapore have been relentless and scathing in their attacks on Indian policy makers in a manner never seen before.

If you see the daily feed of stories that come from some of the best and brightest journalists Bloomberg recruited, there seems to be a perverse pleasure in labelling every move by India’s policy makers as ill-conceived or wrong or incompetent or even callous.

It appears something wrong is happening every day – our GDP numbers are not true, there are more jobless than employed, nobody is buying cars or motorbikes in India, hundreds of companies are going belly up, defaults are dime a dozen (not exactly but somewhat true), and recession is here in India now before it is showing up in rest of the world. Or more abject gutter news to that effect about India. And this has been going on since May 2018 when the National Stock Exchange of India (NSE) decided to end all data-licensing and live-quote-feeds to the Singapore Stock Exchange (SGX) for protecting its rights over NSE indices like NSE futures and options, Rupee Interest Rate derivatives and other indices. NSE has since then filed a case against SGX in Bombay High Court and ended all sharing of feeds to SGX which the former felt is shifting a lot of liquidity away from the Indian bourse to offshore.

Ever since, SGX stock price has also fallen and lot of foreign investors reacted adversely to NSE’s move punishing both the underlying Indexes in India as well as the derivatives contracts being traded in SGX.

The fight between NSE and SGX was unprecedented as it ended a 16 year old convenient arrangement between two of Asia’s leading exchanges. Singapore itself has been a hotbed of trading on rupee-dollar trade, box trades (popularly known as dabba trading) and thriving on NSE options and futures which are amongst the top five most traded in the world.

It was convenient to a number of Foreign Investors too who are registered in Singapore rather than having to register in India. In a way, trading and algorithmic trading in Nifty contracts became rampant and spectacular there until the NSE saw a lot of legitimate business which should have translated on-shore (to India) disappear into offshore (Singapore).

Now, could there be a wider correlation between this and the news coming via Bloomberg? As I said, very much yes. Here’s why: Bloomberg terminals track many users doing trades in Nifty. And many of them who trade on SGX, in Singapore, either use Bloomberg terminals or Reuters terminals.

While Reuters has been reasonably benign and moderate in commentating about India’s re-elected leadership or market policies, Bloomberg (which has more skin in the game) by virtue of it’s higher market leadership in terminals used by Foreign Investors and Offices set up outside India has become bold and pervasively pessimistic about India’s Financial System – it might suit them and scribes like Andy Mukherjee to create daily doomsday scenarios about Indian markets about to implode.

But investors and market players know what to read and how much is too much to read into. If India’s GDP figures are all lies, there would have been a flight of capital by now.

If nobody is making money from the markets, our outflows in Mutual Funds would have been staggering (we are still somewhere in the Rs.20,000 crore mark against a SIP book of Rs.60,000 crore per annum).

And no, the government is not blind to the beleagured companies’ defaults, they have already begun acting since they took charge, a muti-pronged, simultaneous cleanup is happening with SEBI, RBI and market players (being judged into M&As amongst various NBFCs).

You can rest assured somewhere solutions are looming and snowballing to quell the contagion.

Again, recession is not the same as Depression and the word recession has arisen 30 times in the last 14 or 15 bear markets – and it takes a lot more by way of a fall in key indicators before recession is confirmed in a consumption-led economy like India where multiple headwinds are showing up at the same time.

In summary, I feel there’s some vested interest in labelling India a laggard, an economic disaster or a systemic failure and this has triggered an obsession with writing negatively on Indian markets. Most of the news items that leak out of Quint Bloomberg appear to have a squinted view of things in India.

Hello, Bloomberg and SGX stop whipsawing India because you lost a more terminals out of liquidity moving back to India or because NSE checked you out of your stealing ways.

The grapes are not that sour and India is not as bad as your headlines make it out to be. Writing bad about India is easy – don’t fall into that familiar trap. Take a break or learn balanced journalism from Reuters.

Post-script: A view from a respected analyst came that the real reason for the anti- India stance is because Bloomberg Quint is owned by Ravi Vagal who is being denied TV license in India for two years by the BJP government.

The above inference could be sheer coincidence.

Truth is stranger than fiction.

Here is the fact:

“.This is what is the fact:”The Indian Broking community was given a chance to break the monopoly of SGX nifty by increasing the number of hours of trading in India in order to match the extended hours of Singapore. But, Indian brokers too do not want to go ahead citing irrational reasons.

Today also as per IST – SGX starts at 7 am and ends at 9 pm IST – giving distinct advantage to NRIs and FIIs.

Coming to the loss of Bloomberg Terminals. It does not mean that business has come back to India. Brokers like Interactive Brokers and more have captured this business which has helped the Europe and America based traders.

This anomaly will continue till Indian brokers do not gear up for a 19 hour session. As it is most trading happens on-line so I do not see where is the issue that they have raised on overheads. In fact their problem is that they want to run a parallel book against their own clients and that will not happen.”


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