Millennium Post

Investor wealth jumps over Rs 23 trillion so far this year

Stock market investors have become richer by over Rs 23.33 lakh crore so far this year, as 25.49 per cent rally in the benchmark Sensex has helped the total valuation of all the Bombay Stock Exchange (BSE) listed firms reach close to Rs 94 lakh crore.

In contrast, investors’ wealth had surged by over Rs 1 lakh crore to Rs 70,44,431 crore in 2013.
At present, the total market capitalisation (m-cap) of BSE listed companies stands at Rs 93,77,672 crore, about Rs 6.22 lakh short of the Rs 100 lakh crore milestone.

The Sensex has gained 25.49 per cent from 31 December to 1 October and touched its life-time high of 27,319.85 on 8 September. Positive investor sentiment following the formation of new government at the Centre and strong foreign fund inflows have been driving the domestic equity markets, experts said.

‘The undercurrent of the stock market is bullish although stocks are currently in the consolidation phase and buying may resume in the days to come,’ said an equities expert. Marketmen have maintained that the surge in investor wealth is also due to continued rise in listed firms. The total
number of listed companies stands at 5,485.

Sensex blue-chip companies whose market valuation is more than Rs 1 lakh crore include TCS, ONGC, RIL, ITC, Infosys, Coal India, HDFC Bank, SBI, Sun Pharma, ICICI Bank, HDFC, Bharti Airtel, HUL, Wipro, Tata Motors, L&T and NTPC.

Outsourcing giant TCS is the most valued Indian company with a market cap of Rs 5,43,684.13 crore. Indian markets have seen smart gains this year helped by robust foreign fund inflows.
Since the beginning of this year, foreign investors have infused a net of Rs 83,438 crore ($14 billion) in the stock markets, while they have invested a net of Rs 1.18 lakh crore into the debt market ($19.6 billion).

Meanwhile, coinciding with rise in stock value is India Inc business confidence which has shown uptick post the formation of Narendra Modi-led government with key industry surveys showing marked improvement in investor perception during the July-September quarter. While the survey by industry body Ficci showed business confidence at a 15-quarter high, the CII poll indicated a sharp improvement in business confidence. The CII Business Confidence Index shot up to 57.4 in the July-Sept quarter, from 53.7 in the previous quarter.

Ficci's Overall Business Confidence Index moved up to 72.7 in the present survey, highest in 15 quarters. The index value in the previous survey was 69.

‘The determination shown by the new government at the Centre to provide an impetus to growth along with reviving the 'feel good' factor has sent the business confidence index soaring for the second quarter in a row,’ CII Director General Chandrajit Banerjee said.

‘In order to capitalise on the early signs of improving business sentiments, we must ensure that this momentum is maintained going forward,’ he added.

Banerjee suggested that ‘management of inflationary expectations through supply-side measures would hold the key for ensuring continued momentum of economic revival’.

Ficci said: ‘The confidence level of the investors is steadily improving. The new government has geared into action and we have seen clearances being given to some big ticket projects. The government has also announced a series of progressive policy and procedural measures that augur well for economic and industrial growth.’

It added: ‘Industry feels that we are on the right track and that government should continue with its efforts to further smoothen the clearance process.’

The proportion of respondents citing 'moderately to substantially better' performance vis-a-vis last six months recorded a significant jump at the economy, industry and firm level in the current survey.
The participants were also optimistic about the near term prospects, with 93 per cent of the companies saying that they expect the overall economic situation to be better over the next six months.

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