Sunday, September 13, 2009

Investors gained most from equity in past 17 years - ET analysis

Investors betting on Indian equity market during this turbulent time have actually posted gains which were unheard of during the post-liberalisation era. The Sensex, the benchmark index of BSE, posted a return of 64% during the first 36 weeks of the current calendar year increasing their kitty by whopping Rs 946,757 cr. Incidentally, this is the highest return during the same period for the last 17 years, a SundayET analysis reveals. It was only during the year 1991 when the Sensex appreciated by 81% in the first 36 weeks. Also, during 1992, the Sensex had given almost equal return with a marginal decline by around 0.1%.

The best five performing stocks in this list are Sterlite Industries, Tata Motors, Jaiprakash Associates, Mahindra & Mahindra and Maruti Suzuki India. First four stocks gave a return of more than 200% each, whereas, Maruti Suzuki India appreciated by 171% during first 36 weeks of CY09. Interestingly, these are the same stocks, which under performed during the same period a year ago. For instance, Jaiprakash Associates and Sterlite Industries lost 60% and 51% during the same period last year.

According to Waqar Naqvi, CEO of Taurus Asset Management Company, the central banks across the world pumped in huge liquidity which led many global investors unlocking their reserves. “India became a major beneficiary in the process thanks to its less exposure to the global export. In fact, the Indian economy is mostly dependent on domestic consumption. The political stability further buoyed the sentiments,” he said.

Interestingly, during the last 36 weeks, none of the Sensex stocks ended in red. However, the under performers are Hindustan Unilever, NTPC, Sun Pharmaceutical Industries, Bharti Airtel and Reliance Communications. Hindustan Unilever appreciated by merely 5%, whereas, the share price of NTPC went up by 13% during the same period. Out of these, three stocks — Reliance Communications, Bharti Airtel and NTPC — gave negative return during the same period a year ago. Due to their defensive nature Sun Pharmaceutical Industries and Hindustan Unilever appreciated by around 31% and 15% during the same period last year despite the fall in the broader index, the Sensex.

Source: The Economic Times

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