Money on the markets
A maturing market amid the mayhem
(Any opinions expressed here are those of the author, and not necessarily those of Thomson Reuters)
As the end of 2012 approaches, investors will likely remember this as a bipolar year for Indian markets.
Calibrations about the economy, interest rates, and the government’s ability to respond to these challenges have undoubtedly been the key themes of the year.
from India Insight:
Sometimes people suspect that the grass is greener in the next field ... but they're not always right.
Consider this. India's gross domestic product has grown about 7 percent on an average per year for the past nine years. Its industrial growth has been steadily rising since then. Buoyed by economic growth, the country’s capital markets also offered itself as an attractive and inflation beating investment option.
Shares of travel operator Cox and Kings (India) Ltd closed nearly 30 percent up on Friday after listing about 8 percent lower than its issue price of 330 rupees.
Shares in the counter rose to an intra-day high of 433.45 rupees before closing at 426.05 with volumes of 16.9 million shares.
The UPA government’s deferred divestment programme seems to have had a smooth take-off. State utility NHPC’s IPO was subscribed 23.5 times at close.
A lot of comparisons are made between China and India but there are myriad differences between the two developing nations — some wide, some not so wide. It would be a huge mistake to believe the two markets and economies are developing along similar lines, or indeed, behaving in the same way, particularly the financial markets.
Take the respective stock markets. The first chart shows the last decade of both India’s benchmark SENSEX stock index and China’s Shanghai Composite. One thing that is immediately evident is that the Composite outperformed India by a long way in the run-up to the very overblown highs. In fact, using 2005 as a starting point it put on a staggering 380 percent while the SENSEX managed 225 percent over the same period.