US Subprime issue: No need for ''undue worry'':SEBI chief

Hyderabad, Aug 16 (UNI) Allaying fears of investors about the 'bloodbath' in the Indian stock market today, taking a cue from the US and emerging Asian markets, Securities and Exhange Board of India (SEBI) Chairman M Damodaran today asserted that US subprime issue would not have 'much impact' on the bources in the country.

Talking to reporters here, he denied any move to regulate hedge funds.

''We are not scared by the sheer number of FIIs,'' he said, adding those FIIs desirous of registering with SEBI could do so.

Even as the sensex plunged by more than 600 points and the Nifty by over 170 points, the SEBI chairman maintained that ''Indian stock market is safe. Investors need not be unduly worried by the development in US. The subprime issue will not have a destabilising effect on the Indian stock market, which is big, deep and liquid.'' The market would only witness small corrections as some Foreign Institutional Investors, having exposure to bad housing loans advanced in the US to people without credit-worthiness, might pull back some money out of the domestic stock market to maintain liquidity. The impact would be much less than in Western countries, including the US, and those hedge funds having specific lock-in period would not withdraw from the Indian market, he opined.

Hedge funds should not be seen as having 'destabilising' effect on the Indian market as it was not the ''home of hedge funds.'' India had built an image among global investors that the stock market was ''reasonably well-regulated.'' A large number of FIIs had put money in the domestic stock market as it had provided a handsome return on capital invested over a period of time, he added.

UNI