The Hindu Business Line : Ebison Antony, Sr Executive, Geojit Financial Services Ltd; Christ College, Irinjalakkuda

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Ebison Antony, Sr Executive, Geojit Financial Services Ltd; Christ College, Irinjalakkuda

– K.K. Mustafah

Mr Ebison Antony, Senior Executive, Geojit Financial Services Ltd, speaking at Christ College, Irinjalakkuda near Thrissur, at a BL Club function on Wednesday.

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Kochi, July 22 Despite the ups and downs witnessed in the stock markets in recent years, equities still offer one of the highest returns for financial investments. Talking at the BL Club Lecture organised at the Christ College, Irinjalakkuda, Mr Ebison O. Antony, Senior Executive of Geojit BNP Paribas, however, cautioned that funds meant for specific purposes and those which might be required at short notice should not be invested in the capital markets.

Elaborating on the high returns, he said that during the six-year period during 2001-2007, Reliance Industries’ share had grown by 1,433 per cent, while State Bank of India scrip had risen by 1,014 per cent. Investments in fixed deposits and savings certificates would have just doubled in the time period. However, despite the high liquidity of equity investments and high returns, the stock markets remain highly unpredictable. So savings meant for specific purposes such as marriage and children’s education should not be invested in stock markets.

Savings meant for specific functions can be invested in fixed deposits, which offer assured returns while investments in stock markets can be highly unpredictable, although offering substantially higher returns. The Sensex, which had scaled levels of 22,000 had been beaten down to 7,900 before recovering to 15,000 levels today. If a person had invested the savings and wanted to withdraw it during the fall to 7,900 levels for time-bound requirements such as marriage or educational needs, he would have lost heavily on his investments.

Mr Antony said that one does not need to be rich to invest in stock markets. You can start early with investments as small as Rs 100. The company where the investments are made has to be studied carefully before the investments are undertaken. Systematic investments plans are another forum for making small investments on a sustained basis. Over a period of time such small investments will grow in value, not only because of the consistency of investments but also because of the high returns that is often associated with stock markets. He cautioned against investing in penny stocks, which are generally valued below their face value – often beneath Rs 10.

However, capital markets can be quite unpredictable and behave in unexpected and surprising manner, he said. He pointed to the recent election-result rally of 2,000 points which resulted in the markets hitting the upper circuit and closure of transactions as one such instance. Individual shares can also react irrationally going up or coming down without any underlying financial fundamentals. He advised first-time investors to exercise caution and discretions in making investment decisions.

Prof Baby John, Head of the Department of Commerce, Christ College, said that such talks would help bridge the gap between theory, which is taught to the students in the college and practice which institutions such as Geojit provide. A live online Internet trading session was provided for the students. Mr P.C. Muralidharan, Deputy General Manager, The Hindu, talked about the advantages of reading financial newspapers in grasping the financial fundamentals of the markets.

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