Roller-coaster year for markets

PARTY AT THE BOURSES

Net FII inflows into equities alone add up to $8.39 billlion, an all-time high.

Building on a good 2003, when the benchmark Bombay Stock Exchange Sensex gained 73 per cent, investors survived a mid-year scare to see the index climb to a record-busting high of 6,567 on Wednesday. This marks a 12.4 per cent per cent gain year on year over 2003.

But the bigger story is in the broader market. Almost all stocks hit either lifetime highs or at least 52-week highs in the course of the year. The broader index of 500 scrips, the BSE-500, posted a 17 per cent gain in 2004, way ahead of the Sensex's 12.4 per cent, indicating a broad-based rally in equity prices.

The Bharti Tele-Ventures scrip was the top gainer of 2004 in terms of absolute investor wealth (market capitalisation) added. Sunil Mittal's telecom company Bharti was worth Rs 19,803 crore more during the course of the year and is Rs 39,282 crore today.

Investors were amply rewarded for their faith in information technology companies: Infosys Technologies, at second place, added Rs 17,884 crore to end at Rs 54,961 crore, while Wipro, at number three, added Rs 12,103 crore to end at Rs 52,589 crore.

 

Stars of 2004
Top 10 cos Rs crore	Market capitalisation
	On Dec 28, 2004	Absolute gain*
Bharti Tele	39,282.18	19,803.26
Infosys Tech	54,960.67	17,884.31
Wipro	52,589.27	12,103.19
ITC	32,682.05	8,273.09
IOC	61,091.60	7,719.38
BHEL	18,478.16	6,045.57
L & T	12,496.60	5,936.37
ICICI Bank	27,406.37	5,688.39
SAIL	26,413.91	5,307.56
Tata Steel	21,645.73	5,255.44
Top 10 sectors Rs crore	Market capitalisation
	On Dec 28, 2004	Absolute gain*
Banks	161,210.48	39,840.58
IT	163,979.34	30,769.11
Telecom	63,939.59	25,230.48
Pharma	105,928.46	21,624.87
Refineries	223,784.19	13,494.71
Steel	53,376.97	12,417.02
Cigarettes	33,633.51	8,419.22
Engineering	21,141.94	7,913.13
Electrical equip	20,578.32	6,782.44
Cement	20,415.03	5,491.58

It is a mixed bag among the top 10 gainers in market capitalisation. Apart from the two IT companies which stand at the top, there are two engineering companies, BHEL (6) and L&T (7), and two steel companies, Steel Authority (9) and Tata Steel (10).

FMCG heavyweight ITC ended at number 4 in this list, after having added a solid Rs 8,273 crore in 2004. Indian Oil Corporation finished at number 5 and ICICI Bank at number 8.

Talking of ICICI Bank, the banking sector generally dropped its stodgy image and captured investors' imagination. Despite a string of reversals through the year, primarily related to interest rate and inflation worries, the banking sector added the largest chunk --Rs 39,840 crore--to its market capitalisation, ending the year close to Rs 161,210 crore.

And the strengthening rupee could not stop the IT sector from adding Rs 30,769 crore to its overall market capitalisation to Rs 1,63,979 crore. State-owned MTNL added its weight to Bharti's with the net result that the telecom sector added Rs 25,230 crore to end at number 3 in the list of sectors by absolute gains in market capitalisation.

Investors surely liked the string of positive news in the pharmaceuticals sector: the sector added Rs 21,625 crore in capitalisation in 2004 to end at number 4. And despite volatile international oil prices, the refineries sector managed to finish in the top 5, adding Rs 13,495 crore.

In terms of market performance, the Bombay Stock Exchange's TECk index posted gains of 32.4 per cent, followed by the Bankex at 30.7 per cent.

Penny stocks turned multibaggers with a vengeance, small-cap stocks graduated into the mid-cap league while select mid-caps burst into the large-cap fold. At last count, 32 stocks had a market capitalisation of Rs 10,000 crore ($2 billion), up from 27 last year.

For the record, let it be said there are 62 companies with a market capitalisation of $1billion (Rs 4,500 crore), up from 53 at the end of 2003.

The year was pockmarked by records. Foreign institutional investors (FIIs), the main drivers of this year's rally, turned out in huge numbers to buy Indian equities. A record 120 new FIIs jumped on the India bandwagon this year, taking the tally to 637.

Net FII Inflow in the equity market alone adds up to $8.39 billlion, an all-time high.

The primary market saw record money being raised, and the successful mega-IPOs attracted the world's attention.

The year also saw a record $3.3 billion-plus being raised by Indian companies overseas, till November 2004, according to Prime Database.

Ajay Sondhi, vice-chairman and managing director, Kotak Investment Banking, says: "The year 2004 was memorable for investment banking in many ways. The primary equity markets set a number of milestones, with a record over Rs 30,000 crore raised. The Rs 10,000 crore ONGC offering was the largest ever, and along with the Rs 5,000 crore TCS and NTPC IPOs, stunningly proved that global-sized deals can be successfully executed as Indian listings."

Jagdish Master, director at Enam Financial, one of the largest broker procurers for equity initial public offerings (IPOs) this year, said: "The quality of issues has been one of the most important features this year. We were among the top fund gatherers this year and this was helped by the quality of the IPOs." He highlighted the fact that though not measurable, client-service levels and reach also touched new highs.

Sondhi added: "The year saw a surge of foreign currency convertible bonds and depository receipt issuances after some years, reflecting foreign investor appetite for quality, large as well as mid-cap companies. It was a busy year on the M&A front too, with the Tatas, Reliance, Patni, Bharat Forge and others increasingly building global business models via overseas acquisitions.