(Courtesy Indian Express Finance)
As the market picked up the pieces from the global meltdown and inched back to its glorious milestones, the Tata group has leapt ahead of the bourses this year. Thirty-one companies from the salt-to software conglomerate saw their combined market capitalisation soar by more than Rs 2 lakh crore, or by over 150%, in 2009 (up to December 24, 2009). The jewel in the Tata crown, Tata Consultancy Services, had a rocking year, with its market capitilisation trebling, by 213%.
Investors in Mukesh Ambani's Reliance Industries group were also rewarded handsomely. The combined market capitalisation of the group swelled more than Rs 1.5 lakh crore, with flagship RIL recording an 80% jump in M-cap.
Together, the wealth of India's top 25 industrial houses-ranked according to turnover and measured by M-cap-rose by 113% to Rs 15.22 lakh crore, from Rs 7.15 lakh crore at the end of last year. In the same period, the benchmark 30-scrip Sensex (^BSESN : 17359.1 -42.46) gained nearly 80% to reach 17,360.61 points, while the broader 50-scrip Nifty (^NSEI : 5173.05 -5.35) moved up by 75%.
Among the larger business houses, Anil Dhirubhai Ambani Group saw its M-cap rising by just 15.6% this year.
The highest percentage increase, of over 350%, was recorded by the Om Prakash Jindal group; M-cap of group firm Jindal Steel & Power soared 366%. Power companies have been on steroids as such; the M-cap of Torrent Power moved up 326%.
Another sector that gave investors big returns was automobiles. After being battered towards the end of 2008, in the wake of the economic slowdown, companies such as Bajaj Auto, Tata Motors and Mahindra & Mahindra rebounded smartly, as consumer demand picked up.
The Indian stock market has been among the top five performers in Asia, ahead of China, this year. Foreign institutional investors have shown a good appetite for Indian stocks, buying equities worth over $16 billion, with the bulk of the money coming in after the Lok Sabha election results were announced on May 16, 2009.
With the outlook for the economy improving, India Inc is expected to turn in fairly good profit numbers in 2010-11. However, given the sharp run-up in stocks in 2009 and the fairly rich valuations, market watchers believe it would be unreasonable to expect similar returns in 2010.
Wednesday, December 30, 2009
Monday, December 28, 2009
GLOBAL ECONOMY 2010 - Crystal ball gazing
Courtesy Reuters
Thanks to roughly $5 trillion in special lending and spending programs, world finance leaders have managed to revive economic growth.
In 2010, the bills may start coming due.
The United States, the euro zone, Britain and Japan are all expected to report economic growth for the final three months of 2009, according to a recent Reuters poll of more than 150 economists. Official figures aren't due for several more weeks, but recent reports on factory activity and world trade point to a stronger fourth quarter.
While the pace of growth may slacken a bit in 2010, most forecasters think it will stay positive in advanced economies. But unemployment is likely to remain uncomfortably high, which suggests already strained government finances will worsen.
That will leave countries with limited resources to step in should the economy falter again. And the rising debt burden is beginning to raise alarms with some economists and investors.
The International Monetary Fund thinks debt as a percentage of gross domestic product will rise in all of the Group of Seven wealthiest countries in 2010, and probably remain elevated at least through 2014.
"The foundation of the global economy remains unstable even if the cracks have been smoothed over and we are all happy to forget what lies beneath the heavy layer of the public sector's liquidity insurance," said Lena Komileva, an economist with Tullett Prebon in London.
Komileva argues that the global economy is in the midst of a "mega cycle of multi-year economic trends" that won't quickly be resolved, even after growth is firmly established.
In addition to high government debt, many consumers are carrying large debt burdens, particularly in the United States and Britain. There is also the matter of elevated unemployment in most of the advanced economies, and credit is still not flowing normally between banks and borrowers.
Those factors, along with a tame inflation outlook, will probably give the major central banks ample reason to keep benchmark interest rates unusually low, at least through the first half of 2010 and perhaps well into 2011.
Longer-term interest rates, however, may rise anyway should investors grow more anxious about how countries will repay their debt when sluggish economic growth is curtailing tax revenues and aging populations are draining resources.
Higher long-term rates would make it costlier for businesses to fund investment or expansion, and for households to borrow money to buy cars and homes, putting a drag on the economic recovery.
Thanks to roughly $5 trillion in special lending and spending programs, world finance leaders have managed to revive economic growth.
In 2010, the bills may start coming due.
The United States, the euro zone, Britain and Japan are all expected to report economic growth for the final three months of 2009, according to a recent Reuters poll of more than 150 economists. Official figures aren't due for several more weeks, but recent reports on factory activity and world trade point to a stronger fourth quarter.
While the pace of growth may slacken a bit in 2010, most forecasters think it will stay positive in advanced economies. But unemployment is likely to remain uncomfortably high, which suggests already strained government finances will worsen.
That will leave countries with limited resources to step in should the economy falter again. And the rising debt burden is beginning to raise alarms with some economists and investors.
The International Monetary Fund thinks debt as a percentage of gross domestic product will rise in all of the Group of Seven wealthiest countries in 2010, and probably remain elevated at least through 2014.
"The foundation of the global economy remains unstable even if the cracks have been smoothed over and we are all happy to forget what lies beneath the heavy layer of the public sector's liquidity insurance," said Lena Komileva, an economist with Tullett Prebon in London.
Komileva argues that the global economy is in the midst of a "mega cycle of multi-year economic trends" that won't quickly be resolved, even after growth is firmly established.
In addition to high government debt, many consumers are carrying large debt burdens, particularly in the United States and Britain. There is also the matter of elevated unemployment in most of the advanced economies, and credit is still not flowing normally between banks and borrowers.
Those factors, along with a tame inflation outlook, will probably give the major central banks ample reason to keep benchmark interest rates unusually low, at least through the first half of 2010 and perhaps well into 2011.
Longer-term interest rates, however, may rise anyway should investors grow more anxious about how countries will repay their debt when sluggish economic growth is curtailing tax revenues and aging populations are draining resources.
Higher long-term rates would make it costlier for businesses to fund investment or expansion, and for households to borrow money to buy cars and homes, putting a drag on the economic recovery.
Thursday, December 17, 2009
POLL - Sensex set for slower rise in 2010
The BSE Sensex is likely to extend its recent rally into 2010, underpinned by strong economic growth and an improving earnings outlook, but it is unlikely to repeat 2009's spectacular rise, a Reuters poll has shown.
The benchmark Sensex is likely to rise nearly 9 percent by mid-2010 and by more than 12 percent by the end of next year from Wednesday's close of 16,912.77, the poll has found.
The median forecast of around 20 brokerages and investment houses, taken over the past week, has the benchmark rising to 18,375 points by the middle of 2010, and will likely end the year at 19,000.
"The Indian economy will do well. Corporate earnings will do well," said Jigar Shah, senior vice-president of Kim Eng Securities, who saw the Sensex rising to 21,000 by mid-2010.
The Sensex hit a record high of 21,206.77 in Jan. 2008.
Other analysts were worried that the withdrawal of stimulus measures and the impact of this year's weak monsoon could temper the stock market's strength.
"A lot depends on monsoon. We are on the edge as far as food reserves are concerned," said Arun Kejriwal, director of research firm KRIS, pointing to the galloping food inflation.
"If we have a bad monsoon, the market could really tumble," he added.
The benchmark is up by three-quarters so far in 2009 and on track to post its best yearly gains since 1991, with analysts polled expecting the Sensex to end the year at 17,000 points.
It had posted its worst yearly loss in 2008, when it slumped by more than half.
"Life is not going to be that easy for equity investors next year," said Rajesh Agarwal, director of CD Equisearch.
"You should see the gains this year in the context of the mayhem last year and, therefore, one shouldn't expect the market to rise sharply from this level in the year ahead."
The highest mid-year 2010 forecast had the BSE index scaling new highs and touching 23,000, while five forecasts expect a decline from current levels, with the most pessimistic view expecting the benchmark to decline 40 percent from Wednesday's close to 10,115.
The forecast for the Sensex at the end of 2010 ranged from 10,893 to 24,000.
The BSE index has outperformed Japan's Nikkei, which is up 14 percent so far this year, and a 50 percent rise in Hong Kong's Hang Seng Index, but is just behind an 80 percent rise in China's Shanghai Composite Index.
The BSE index trades at 21.8 times forward earnings, in line with the benchmark in South Korea, but higher than Indonesia which trades at a multiple of 15.8 .
China's Shanghai Composite Index traded at 24.1 times earnings while Brazil and Russia trade at about 17.6 and 13.3 respectively.
The benchmark Sensex is likely to rise nearly 9 percent by mid-2010 and by more than 12 percent by the end of next year from Wednesday's close of 16,912.77, the poll has found.
The median forecast of around 20 brokerages and investment houses, taken over the past week, has the benchmark rising to 18,375 points by the middle of 2010, and will likely end the year at 19,000.
"The Indian economy will do well. Corporate earnings will do well," said Jigar Shah, senior vice-president of Kim Eng Securities, who saw the Sensex rising to 21,000 by mid-2010.
The Sensex hit a record high of 21,206.77 in Jan. 2008.
Other analysts were worried that the withdrawal of stimulus measures and the impact of this year's weak monsoon could temper the stock market's strength.
"A lot depends on monsoon. We are on the edge as far as food reserves are concerned," said Arun Kejriwal, director of research firm KRIS, pointing to the galloping food inflation.
"If we have a bad monsoon, the market could really tumble," he added.
The benchmark is up by three-quarters so far in 2009 and on track to post its best yearly gains since 1991, with analysts polled expecting the Sensex to end the year at 17,000 points.
It had posted its worst yearly loss in 2008, when it slumped by more than half.
"Life is not going to be that easy for equity investors next year," said Rajesh Agarwal, director of CD Equisearch.
"You should see the gains this year in the context of the mayhem last year and, therefore, one shouldn't expect the market to rise sharply from this level in the year ahead."
The highest mid-year 2010 forecast had the BSE index scaling new highs and touching 23,000, while five forecasts expect a decline from current levels, with the most pessimistic view expecting the benchmark to decline 40 percent from Wednesday's close to 10,115.
The forecast for the Sensex at the end of 2010 ranged from 10,893 to 24,000.
The BSE index has outperformed Japan's Nikkei, which is up 14 percent so far this year, and a 50 percent rise in Hong Kong's Hang Seng Index, but is just behind an 80 percent rise in China's Shanghai Composite Index.
The BSE index trades at 21.8 times forward earnings, in line with the benchmark in South Korea, but higher than Indonesia which trades at a multiple of 15.8 .
China's Shanghai Composite Index traded at 24.1 times earnings while Brazil and Russia trade at about 17.6 and 13.3 respectively.
Saturday, December 12, 2009
Market update...
Indian markets ended Friday below the dotted line on profit booking witnessed in frontliners. Domestic bourses were unable to sustain the opening gains due to a hasty reaction to October IIP data. The US Dow, however closed Friday 65 points up, on positive news on the retail sales front.
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