News: Investors put faith in desi companies
(TNN 02/04/2006) Mumbai - MNC magic finally waning? Or have our own companies succeeded in steering greater investor interest? During last year’s market rally, when investors reached the bourses in droves, Indian companies managed to attract more of them compared to their MNC counterparts.
An ET survey of 100 top Indian companies and 100 top MNCs in terms of market cap (M-cap) as on March 31, 2006 finds that while the number of shares of Indian companies traded on the bourses increased by 226% between April 1, 2005 and March 31, 2006, that of MNCs increased by 144% during the same period.
Indian investors never had it so good. Riding high on improved macro-fundamentals, stock prices have increased consistently throughout 2005-06. The 30-share Bombay sensitive index has risen by 70.8% from 6,605 on April 1, 2005 to 11, 280 on March 31, 2006.
This has led to a sharp rise in the M-cap of the companies. The aggregate M-cap of the sample 200 companies has increased by 65.1% during the year. The sharp rise in M-cap in turn had improved the investor sentiment as never before. This is reflected in the rise in number of shares traded on the bourses.
Multinational companies were the bigger gainers of the rise in M-cap. Their aggregate M-cap has grown by 85% last year, compared to 61.8% rise in the aggregate M-cap of the Indian companies during the same period.
The rise in aggregate M-cap of the MNCs was, however, accounted for by mainly two leaders, ITC and Hindustan Lever. Together, they contributed more than two-fifths of the incremental M-cap of the sample MNCs. The M-cap of ITC has increased by 117.2% and that of Hindustan Lever by 106% during this period.
The market cap of more than two-thirds of them at the other end, grew at a lower rate than the average growth rate of the samples. Eleven of them in fact, have witnessed a fall in their M-cap during last fiscal. The market cap of Jet Airways has declined by 21.2% and that of Micro Ink and ING Vysya Bank by 23.2% and 7.7%, respectively.
In contrast, the rise was far more broad-based among the Indian companies. Their aggregate market cap has increased by 65.1% despite four of the top five companies ranked in terms of M-cap on March 31, 2006 achieving less than 50% rise.
The M-cap of ONGC, the number one on the list, grew by 48.7% during the period while that of Reliance Industries, the second in order, increased by 41.1%.
And although NTPC, the third ranker, did somewhat better with 53% rise, it was still way below the average growth rate of 61.8% achieved by the sample companies.
But if the M-cap of Reliance Industries grew at a lower rate compared to the average growth rate of the sample companies, the investors were convinced of higher future return.
The company, which has always been considered investor-friendly, attracted huge investors’ interest during last fiscal. This is reflected in the massive rise in the number of shares traded on the bourses — up by a phenomenal 1,909% between the first and the last trading sessions of 2005-06.
Past record apart, the spurt in investors’ interest in Reliance shares must have been influenced by its spectacular financial performance.
Net profit of the company has increased by 24.3% during the first nine months of 2005-06 over the corresponding period of 2004-05. The net sales has increased by about 17.6% during the same period.
An ET survey of 100 top Indian companies and 100 top MNCs in terms of market cap (M-cap) as on March 31, 2006 finds that while the number of shares of Indian companies traded on the bourses increased by 226% between April 1, 2005 and March 31, 2006, that of MNCs increased by 144% during the same period.
Indian investors never had it so good. Riding high on improved macro-fundamentals, stock prices have increased consistently throughout 2005-06. The 30-share Bombay sensitive index has risen by 70.8% from 6,605 on April 1, 2005 to 11, 280 on March 31, 2006.
This has led to a sharp rise in the M-cap of the companies. The aggregate M-cap of the sample 200 companies has increased by 65.1% during the year. The sharp rise in M-cap in turn had improved the investor sentiment as never before. This is reflected in the rise in number of shares traded on the bourses.
Multinational companies were the bigger gainers of the rise in M-cap. Their aggregate M-cap has grown by 85% last year, compared to 61.8% rise in the aggregate M-cap of the Indian companies during the same period.
The rise in aggregate M-cap of the MNCs was, however, accounted for by mainly two leaders, ITC and Hindustan Lever. Together, they contributed more than two-fifths of the incremental M-cap of the sample MNCs. The M-cap of ITC has increased by 117.2% and that of Hindustan Lever by 106% during this period.
The market cap of more than two-thirds of them at the other end, grew at a lower rate than the average growth rate of the samples. Eleven of them in fact, have witnessed a fall in their M-cap during last fiscal. The market cap of Jet Airways has declined by 21.2% and that of Micro Ink and ING Vysya Bank by 23.2% and 7.7%, respectively.
In contrast, the rise was far more broad-based among the Indian companies. Their aggregate market cap has increased by 65.1% despite four of the top five companies ranked in terms of M-cap on March 31, 2006 achieving less than 50% rise.
The M-cap of ONGC, the number one on the list, grew by 48.7% during the period while that of Reliance Industries, the second in order, increased by 41.1%.
And although NTPC, the third ranker, did somewhat better with 53% rise, it was still way below the average growth rate of 61.8% achieved by the sample companies.
But if the M-cap of Reliance Industries grew at a lower rate compared to the average growth rate of the sample companies, the investors were convinced of higher future return.
The company, which has always been considered investor-friendly, attracted huge investors’ interest during last fiscal. This is reflected in the massive rise in the number of shares traded on the bourses — up by a phenomenal 1,909% between the first and the last trading sessions of 2005-06.
Past record apart, the spurt in investors’ interest in Reliance shares must have been influenced by its spectacular financial performance.
Net profit of the company has increased by 24.3% during the first nine months of 2005-06 over the corresponding period of 2004-05. The net sales has increased by about 17.6% during the same period.
posted by InCar Group Press Room at 23:29
0 Comments:
Post a Comment
<< Home