India stock’s gain over 500 % in the past 4 years.
Oct 18th 2007,
India’s stocks are performing extremely well and the BSE (Bombay Stock Index) has touched 19,000 for the frist time ever this month in Oct 2007 before settling down around 18000 mark. The stocks gained more than 500 % since 2003 as compared to the US stocks which gained about 60 % during this same 4 year period.
The primary reason behind this growth and the rise in the stocks is significant influx of Foreign Investment in the Indian Stock Market by US & European Financial institutions. The booming Indian Economy with the consistent GDP growth of over 8% and manufacturing sector growth of over 10 per cent year after year during this period has also contributed to the rise in the stocks.
The credit crisis and the sub-prime loan issues along with the US rate cut also contributed to the rise of the Indian Stock market which has seen an increase of over 20% due to the increased foreign investment in the period.
However, the rise of the stocks is happening at an alarming pace and the Indian Government and SEBI, the India stock watch are concerned with the steep increase markets due to the heavy dollar inflow through Participatory Notes in derivatives market and compounded by the weakening of dollar against the Rupee. The Indian Rupee has appreciated by over 10% in the last one year and current hovering around 39 rupees which is the highest levels in the past 9 years.
So SEBI recently decided to calm the investors and put in regulator controls in place in market place that the Participatory Notes in derivatives market cannot exceed the 18 month limit. This announcement on Oct 16th resulted in the market crash by over 1,700 points and it soon recovered back after an assurance was made by the Finance Minister Mr. Chidambaram that there is no proposal to ban Participatory Notes.
High performing stock quotes in Rupees as of Oct 16th 2007 are as follows:
Reliance Energy 1,810
Infosys - 1915
ICICI Bank 1135
Tata Power 1200
Infosys - 1915
ICICI Bank 1135
Tata Power 1200
The US Investors can also invest in the Blue chip Indian Stocks on the NY / Nasdaq Stock exchange and these are traded as ADRs (American Depository Receipts)
Following are some of the Indian Stocks traded in the NY Stock exchange:
ADR Prices are as of Oct 17th 2007
Company Exchange USD Value
WIT - Wipro NYSE 15.10
RDY - Reddy’s lab NYSE 15.50
VSL - Videsh Sanchar NYSE 24.90
SAY - Satyam NYSE 26.80
INFY - Computers Nasdaq 49.30
HDB -HDFC Bank NYSE 108.00
IBN - ICICI Bank NYSE 54.70
REDF - Rediff Nasdaq 17.25
Investments in these blue chip Indian stocks has paid off handsomely to a number of Individual and Financial investors… We will have to wait where the Indian Stocks go from here…
D&A Consulting
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