Jalees Ansari, 51, explosive expert who masterminded 31 bombings and is serving a sentence in Ajmer jail will definitely not like what is happening in Mumbai. In his stark statement to the CBI in `93 he had outlined his purpose in life:
"to pressure the government and the majority community by whatever means, even if it means destruction of life and property to any extent and to terrorise the community, the government and the police".
But it seems even the recent blasts haven't been able to dent the spirit that fills the hearts of Mumbaikars. A day after, business in the city bounced back defying the gravity of the situation.
The biggest concern was the way the financial markets would behave just when the economy had begun to show signs of recovery. The Bombay Stock Exchange's sensitivity index reacted sharply to the news with a dip of 180 points going well below the psychological 4000 mark. The day closed after a subsequent rise of 60 points to 4004. This 120-point fall was the greatest in this calendar year. But on the next day it rose up to 4160 before closing at 4152. On Wednesday it touched a high of 4222 before closing at 4206, a 29-month high.
The rupee too bounced back on Tuesday, three paise stronger to the dollar than Monday and another two paise stronger on Wednesday hence wiping out almost all the negative impact of the blasts. It could have gained even more but for the month-end routine demand from corporates and the dollar's gains against other currencies in overseas markets.
Jyoti Vaswani, fund manager, JM Mututal Fund explains that though the markets react negatively in any such event, the panic is short-lived most of the time. But given the fact that the fundamentals of the Indian economy have improved in the past couple of months - above average monsoons, upgrading GDP forecasts, good FII inflows and good corporate performance - the markets recovered as expected and are expected to continue their march upwards in the long term.
Nobody is unduly concerned. Atul Das, senior vice president, corporate finance and strategy, Zee Telefilms whose scrip lost nearly 10 per cent value on Manic Monday is calm in his response. He explains that as his is a volatile stock it tends to crash lower than the market average in bad times as it performs higher than the average in good times. "Zee normally gets back to its normal in two to three days without any long-lasting negative impact of such an event", says Das.
Should we thank Osama bin Laden and his ilk of jehadis for the markets barely blinking? For as Rushabh Sheth, equity fund manager, Kotak Mahindra Mutual Fund points out, worldwide investors have now started to live with the idea that there will be such sporadic terrorist attacks across the world, and therefore don't attribute too much to any such single event.
During the last three bomb explosions, the day after and the week that followed were positive after the initial reaction. How the market reacts largely depends on the direction of the sensex. In case of an upward, bullish trend, the adverse impact is for a briefer period. In a bearish market the impact lasts longer, according to fund managers.
But in the global spread of terrorism, especially post-9/11, the developed world seems to turn to the eastern philosophy of life. Call it destiny or karma, the foreigner has gradually come to terms with the fact that such a disturbance can occur anywhere, anytime. So gradually, but definitely, he has learnt not to panic and flee. He now prefers to stay, follow basic rules of safety and continue to pursue his course of life. So after the downward swoop of half a day, financial institutions carried on their business, in fact using the fall in the markets to buy in good quality fundamentally strong companies. On Monday itself the net inflow of funds from FIIs was $15.7 million. Other factors that govern FII investments include the overall political scenario and the economic fundamentals. If they are reasonably positive, the flows will continue.
Tourism, another sensitive industry in the past, has not been hurt so far, either. Ashish Kumar Singh, managing director of the Maharashtra Tourism Development Corporation (MTDC) has been in touch with tourists and operators. There is no panic reaction, no knee-jerk cancellations and certainly no exodus of foreigners, he says. Hotels are booking well and airlines are choc-a-bloc. India is a many city destination and again, foreign tourists expect unrest wherever they travel. In fact, even resident foreigners who would typically flee at the slightest sign of trouble haven't reacted.
The one market that lost some was the sensitive bullion market. Madhusudan Daga, gold analyst estimates a loss of Rs 100 crore in trading. But business is back to its usual from Wednesday. Retail jewellery shops were shut from Monday afternoon and also through Tuesday because L.K. Advani and Sonia Gandhi were paying visits. But this is a trough in retail gold buying as demand picks up only in September.
But yes, the concern at every quarter is the recurrence. Intelligence reports say that this may be a part of a larger plan to destroy the commercial nerve of the country. History shows that it could certainly damage industries. Tourism fell by nearly 70 per cent following the December `92 Babri Masjid demolition and the chaos that followed. This year Maharashtra expects a 15 per cent increase in tourist to over 8.5 lakh. Further trouble may damage this carefully created volume. Similarly Vaswani says that if they occur at frequent intervals, the morale of the foreign buyers will definitely be impacted.
So eventually what was lost in the city? Lives of over 50 people, all ordinary citizens from which about 20 are Muslims; about a 100 damaged vehicles and shop fronts and a day and a half's business in the commodities and the bullion markets. Interestingly, markets around the globe seemed to have reacted more. Dollars were sold as buyers preferred to invest in safer currencies like the Euro and the Swiss franc. Asian stock exchanges, especially Thai and Karachi, felt a considerable tremor losing five and 32 points respectively.
What hasn't gone? Investor confidence, tourist traffic and the citizen's morale.
And who gained? The insurance industry that expects an increase in terror cover that has already earned it over Rs 150 crore this year. The solidarity of Mumbai citizens has only increased. In the streets around Zaveri Bazaar where one of the blasts happened Hindus and Muslims have spilled over to help each other. Everyone has, painfully over the last decade, understood that it is a good idea to concentrate on economic progress - for what the city has always stood and ironically the reason for which it has become the target of terrorism.
As for Ansari and his ilk this is not success. But to keep them away from their goals the police and the government- his other targets- now have to ensure that they together help the city retain its fabric.
A slightly shorter version of this appeared in the print magazine.