Indian Software Index beats global indices, posts a return of 467% in '99
The Indian Information Technology stocks have emerged world beaters in the calendar year 1999 posting impressive returns. The S&P software index in India galloped by a whopping 467 per cent, outperforming its nearest competitor Jasdaq by 223 per cent. While the Nasdaq was up 86 per cent in calendar 1999, the Easdaq (Europe's version of a technology index) gained by 86 per cent and Japan's Japan's Jasdaq shot up 244 per cent. However, the IT revolution in both US and Europe began much earlier and hence, the stocks in those markets have risen from a much higher base.
The gains made by the Indian IT stocks reflects the faith reposed by both domestic and foreign institutional investors. The ADRs of both Infosys and Satyam Infoway also got excellent response with their prices racing to dizzy heights.
In its quarterly report on its growth fund, Morgan Stanley has said that the rapidly growing force of investors across the world is willing to hand our cash at dizzying valuations to get a piece of the revolutionary action. "A technological revolution is changing our lives fundamentally and though largely still on paper, never before have so many people have become so rich so quickly. The markets across the globe are dancing to the same tune. The US market is the trendsetter and the remarkable thing is that India is also mirroring global themes," says the quarterly report from Morgan Stanley. However, Morgan Stanley has a word of caution for investors. The report says. "The IPO market in India has a mania running through it. In the secondary market, the buying of late has been increasingly indiscriminate and virtually every stock with a technology stock connotation has risen excessively."
While a technology mania is sweeping the Indian bourses, Morgan Stanley Growth Fund has a non-technology oriented portfolio. "This kind of a portfolio will help investors weather any storm and we have the best names in many non-technology businesses," says the report. As on December 30, 1999, the top 25 holdings of the fund account for 81 per cent of the portfolio. There has been a marginal change in the top five holdings with Infosys. Hero Honda, Zee Telefilms, Telco and BHEL leading the pack. However, a little known Federal Technology has made an appearance in the top 25 stocks.
As on January 25, 2000, the fund's NAV was at Rs.22.57 while the MSGF units closed at Rs.16.30 on the National Stock Exchange. Thus, the units are trading at a 27.78 per cent discount to the NAV. In the last one year, the fund's NAV galloped by `37 per cent from Rs.9.48 to the current levels. The Unit capital of the fund has come down from Rs.759.5 crore as on September 30, 1999 to Rs.745.80 crore as on December 30, 1999. Thus, the asset management company has been buying back units from the market. In the third quarter, the AMC has bought back 1.4 crore units from the secondary market.
Source : MI
Feb 8, 2000 |
