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23rd August 2010
ANALYSIS
THE U S IS PULLING AWAY FROM A BROKEN COUNTRY
The declaration of the United States to have withdrawn from Iraq cannot be accepted in view of what it has done from the last nine years from 2001 September onwards till now.  The U S administration claims that the last American combat troops moved from Iraq to Kuwait on the early morning of 20th August.  They left not in a showing upset and fear but silently after midnight.  They came in on a gruesome lie that Iraq had weapons of mass destruction and they have left on an untruth. More than half a lakh U S troops will stay back in Iraq and the number can swell to nearly three-fourth of a lakh, in the guise of Advisors and Assistance Brigade, joining Iraqi troops in combat with war planes and helicopters.   The U S continues to have many large actually permanent military bases in Iraq and would be going to maintain approx. two lakh armed forces to safeguard the western business and other interests throughout the country.  Seven years after President George W Bush declared to have accomplished the mission the troops have left Iraq now.

The unlawful U S led attack of 2003 and the later occupation have caused disastrous effects.  There is no correct count of how many Iraqis have been killed or injured in seven years but it is likely that a million have perished, leaving five million refugees out of which nearly three million internally displaced, with 40 per cent having no jobs.  With temperatures near 50 degree C for many months in the year, power supplies fail shutting down water treatment plants raising the danger of pandemic. The governmental chaos was origin of U S conjecture in 2003 that much of Iraqis were fanatically supporting Saddam Hussein and this led the occupying forces to break up the Iraqi army and much of the police and civic administration all over the nation.  The results of war comprise the poisoning of Iraq and beyond by an estimated1,000 tonnes of  used up uranium of U S weapons.  As for the life of the general Iraqis 30 million people fear another fall into ferocious sectarian fighting.  This is obsessed by extremists to utilize the political void as the elected politicians quarrel endlessly over forming a government even five months after the elections. In reality, the incursion has been a reward to the al-Queda which has now extended sway in West Asia. In addition, Iran, which U S overtly hates and fears, has strong hold over Iraqi Shia bosses.  The U S may have got rid of weak Saddam, who by 2003 was not feared even by neighbouring countries, but it has wrecked one of the world’s great ancient civilisations of Iraq.

SMALL INVESTORS WILL HAVE MORE PROSPECTS IN SHARE MARKET
The Small investors are likely to get more places in initial public offerings as the Securities and Exchange Board of India has mooted a suggestion to enlarge the meaning of a retail shareholder.  In future applications up to Rs.2 lakh, twice the current limit, will come under this group and is hoped to inspire many more investors to apply as retailers.  On examining the allotment patterns in latest public offers, the regulator has found that the majority of retail applications are for Rs.80,000 and Rs. 1 lakh.   It is most likely that many of the applicants have the ability and interest to get more shares above Rs. 1 Lakh limit but do not do so because they will go out of the retail category. Present SEBI rules required the issuing companies to assign 35 per cent of theias coaching allotment to the retail investors and just 15 per cent to the non-institutional class.  The odds of winning are more if shares are applied for in the retail category.  Some very large issuers would hail the increase in the limit for retail investors.  For an issue-size of Rs. 4,000 – 6,000 crores, the limit of Rs. 1 lakh would insist that the issue has to attract a minimum of 2 lakh applications in the retail category quota to be filled, a truly frightening assignment.

The government is also justly worried over the result of the approaching large disinvestments by public sector enterprises like Coal India. There have been other shifts to increase the level of retail divisions in the share market. The latest example was the order to listed companies to keep the level of public float at 25 per cent. A three-year period was given to fulfill this model.  But, for some realistic reasons the government reduced the size of the least float to 10 per cent for public sector companies.  An alteration in the regulatory rules, on its own, is unlikely to increase participation of small investors.  Latest public offers by government companies were over-subscribed but retail participation was poor.  The low discount allowed on the offer price and the intricacies of the new auction system were some of the reasons that did not attract small investors. A range of developments such as large-scale technology application and the augmentation of capital requirements for brokers have improved effectiveness and security and the large investors are happy with the scheme.  The fresh steps should go some way in dealing with their worries and small investors may not continue to feel estranged.

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Current Affairs Editorial Team : H.L. Subramania, N.G.Karan, R.Shivaram & N.Poornima
 
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