Financial Daily from THE HINDU group of publications
Wednesday, Apr 03, 2002
Financial Daily from THE HINDU group of publications Wednesday, Apr 03, 2002 |
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Markets
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Stock Markets PSU stocks in limelight Virendra Verma
PUBLIC sector companies were the major attraction of the stock markets in the first quarter (January-March) of this calendar year. The buying spree in PSU stocks has seen the BSE PSU Index rise by 73.75 per cent in the first three months. The index rose from 914.14 points on January 1 to 1588.39 points on April 1, an increase of 674.25 points. In comparison, other benchmark indices moved in a narrow range. The BSE Sensex gained 7.82 per cent, BSE-100 index was up 11.88 per cent and the BSE IT Index by 1.6 per cent. The interest in the PSU stocks was on account of the Government initiatives for speedier privatisation. In the financial year 2001-02, the Government sold its stake in listed companies such as CMC, VSNL, IBP and Hindustan Zinc. However, the rise in the PSU stocks in the first three months in 2002 had been mainly on account of the likely disinvestment in companies such as BPCL, HPCL, IPCL, Nalco, Shipping Corporation. The stocks of these companies have already risen sharply this year; stocks of other companies such as ONGC, Neyveli Lignite, Container Corporation (Concor), Engineers India have also gained between 70 and100 per cent this year. "Highly undervalued PSU stocks attracted interest from institutional (foreign and domestic) investors,'' said a dealer with a broking firm. The interest in the PSU stocks has revived on the sell-off of the Government stake at attractive prices. For instance, the sale of Government stake in IBP to IOC was at Rs 1,552 per share, much higher than the market expectations. The sale price of Hindustan Zinc to Sterlite at Rs 40.50 per share was also higher than the market price. "Since the Government is firm on the privatisation programme based on the market prices, the shares of PSU companies are likely to attract more attention,'' said a dealer. However, some experts warn that with an across-the-board rise in PSU shares, investors should exercise caution and invest in companies that are likely to be divested by the Government.
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