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The Rediff Interview/Nimesh Kampani, stockmarket legend
'Investment is like a chappati '
April 04, 2006
It won't be an exaggeration to say Nimesh Kampani, Chairman, JM Morgan Stanley, knows the Bombay Stock Exchange like the back of his hand. His father Nagindas and uncle Jamnadas Morarjee were names to reckon with at the BSE, but Kampani -- the ace merchant banker -- surprises us saying that he has never speculated in the market.
One of the key players in making the BSE the engine of growth for the new Indian economy, Kampani has attained fame over the years for making possible mega acquisitions and mergers. He has come to be known as one of India's foremost votaries of liberalisation.
Nimeshbhai, as he is popularly known, is media-shy and a man of few words. For a change, he agreed to a rare and exclusive interview with Managing Editor (National Affairs) Sheela Bhatt.
In the concluding segment of a three-part interview, the stockmarket legend provides his tips for investors:
What was your experience when you became a party to the separation of the Ambani empire?
Majha aavi (I enjoyed it). It was a challenge. It was a very interesting challenge to assess the Ambanis' wealth.
What was the challenge?
The challenge was to manage the two parties. On one side was the mother (Kokilaben) and on the other, there were the two sons (Mukesh and Ani Ambani). It was quite a task to handle them separately and explain to them the situation. Sometimes we needed to speak the truth. I took six months to assess their wealth.
All sides accepted my assessment. But let us not go into it.
Are small investors safe after the break up of the Ambanis?
The small investors are much safer than before. Both (Mukesh and Anil) are hardworking and both will want to grow. They will compete with each other. They have separated their areas of work. Mukesh can't create a new Infocomm again and he may not get a license too. It will take him four years to do so.
The same way, Anil can't create the refinery complex and hence both will work in a manner which will benefit their shareholders.
Mukesh's idea of going into retail makes sense. Sixty per cent of India's GDP ($600 billion) is because of retail businesses.
Are there any hidden risks for small investors?
I don't think small investors will lose in any manner.
How was your experience of working with Dhirubhai Ambani?
Dhirubhai had a one-line philosophy: Let investors earn money. If the investors earn, promoters will earn from their shareholding.
Could you tell us how you play in stock markets? What tips will you like to give to small investors?
Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Discussion Group.
How do you see the future of the dollar?
Not good. Because the US has a huge fiscal deficit. The Americans are consumers. The real estate bubble is on. People are borrowing money from banks and buying properties. Out of rent money, they are multiplying their businesses in areas where there are risks.
When real estate goes down, the lenders are going to ask for their margins. The savings rate of Americans is nil.
Government spending is too high and it will invest more than $100 billion in Katrina relief. The problem of Iraq is not solved yet and Iran is not showing sign of a peaceful solution either.
I believe a situation will be created when an Asian currency on the lines of euro will be created which in turn will strengthen Asian economies.Photographs: Jewella C Miranda