In spite of the record peaks scaled by the Sensex, 2006-07 has not been a rosy year for equity investors as 55 per cent of the stocks figure in the list of losers. The market value of the losers declined by an average of 20 per cent, while that of the 45 per cent that gained rose by 35 per cent.
While investors in the 55 per cent falling stocks lost Rs 302,363 crore (Rs 3,023.63 billion), others (45 per cent) gained Rs 555,198 crore (Rs 5,551.98 billion). The net effect was: investors' wealth swelled by Rs 230,835 crore (Rs 2,308.35 billion). However, absolute gains remained only with the top five Sensex stocks that accounted for 43 per cent of the total market capitalisation gains made by the 45 per cent scrips.
Sensex stocks outperformed all traded stocks by posting 16.4 per cent gains against 7.5 per cent gains made by 2,566 actively traded stocks. Only three sectors -- oil & gas (courtesy Reliance oil and gas index's 30.6 per cent rise), banking (the Bankex up 27 per cent) and information technology (the IT index up 24.3 per cent) outperformed the BSE Sensex.
The big losers remained the fast moving consumer goods sector (the FMCG index down 24 per cent) with personal care giant Hindustan Lever (down 27.5 per cent) and cigarettes and hotelier major ITC (down 26.9 per cent) being the largest losers among Sensex stocks.
Besides FMCG, other major losing sectors were pharmaceuticals (the healthcare index down 7.8 per cent) automobiles (the auto index down 7 per cent) and metal (the metal index down 4.8 per cent). Public sector scrips lost ground with PSU index down 4.12 per cent. For small-cap investors, the year has been equally bad with the BSE small-cap index slipping 2.5 per cent.
The real winners of 2006-07 were 66 stocks that withstood the volatility of the markets to register gains in all the four quarters. And Reliance Industries remained the only large-cap stock to have registered gains in all the four quarters of 2006-07. The share price of Reliance has shot up 71.5 per cent in the past year with the counter climbing from Rs 796.25 on March 31, 2006 to Rs 1,365.20 on Monday (March 26, 2007). The other all-quarter winners were from various groups such as B1, B, S and trade-to-trade.
Rasoya Proteins, a solvent extraction company traded in the B group, topped all-quarter gainers posting a year-on-year appreciation of 2,100 per cent. The company's stock rose from around Rs 5.25 a year ago to Rs 115.40. Fact Enterprises, which ranks second in the list, zoomed 1,000 per cent, followed by Arshhiya Technologies (up 690 per cent), Core Projects & Technologies (up 606 per cent) and Vinay Cements (up 553 per cent).
The other big gainers that posted annual returns of over 1,000 per cent were Epic Energy (up 1,809 per cent), Ritesh Industries (1,436 per cent), Mahalaxmi Rubtech (1,290 per cent), Abhinav Capital (1,226 per cent) and Vas Animation (1,164 per cent).
The year 2006-07 eventually turned out to be a bad year despite the Sensex, S&P CNX Nifty and key sectoral indices such as Bankex, IT and Capital Goods rose to their all-time highs, first on May 10 last year and then on February 8 this year.
However, automobiles, cement, steel, real estates, constructions, infrastructure, chemicals, textiles, pharmaceuticals, aluminium, copper, offshore (shipping), airways, housing, fast moving consumer goods, public sector banks, oil refining companies and sugar stocks gave negative returns to their investors.
The first blow came from the sugar sector with the commodity having a poor run since April last year. Bajaj Hindustan, which was ruling around Rs 550, touched a low of Rs 134.20 on February 14 this year. Balrampur Chinni and other sugar scrips also met with the same fate. The fall was attributed to the export ban at a time when international prices were high and then there was bumper production.
Cement stocks had a tough time. The Centre first cut the custom duty by 12.50 per cent and then asked companies to control prices at least for a year. Cement scrips posted a year-on-year return of 1 per cent largely on account of a hefty 25 per cent and 50 per cent decline in the prices of India Cement, Grasim, Gujarat Ambuja, ACC and others in the past one month.
In the auto sector, two-wheelers (down 19 per cent) and four-wheelers (down 17 per cent) both made losses on the bourses. Among two-wheelers, TVS Motors plunged 56 per cent, Hero Honda slumped 25 per cent and Bajaj Auto fell 9 per cent. Tata Motor is almost quoted at its lowest level of June 2006 currently, while Ashok Leyland is hovering around a year-ago level. Mahindra & Mahindra, which rose 26 per cent, remained the sole gainer in the sector.
FMCG counters delivered nothing better to their investors with the market value of the personal care segment down 22 per cent, food products falling 21 per cent, tea slumping 33 per cent and cigarettes declining 27 per cent. Hindustan Lever, Colgate, Gillett, Tata Tea, Nirma and many others fallen over 30-40 per cent, with most of them having gone below their June 14 levels. ITC at Rs 140 was down to its 52-week low.
Construction and real estate scrips declined in the fourth quarter wiping out their yearly gains completely. Unitech, Sobha Developers, Parsvanath, Lok Housing and many other real estate stocks have plunged over 50-80 per cent from their peak levels.
The fall was attributed to the hardening of interest rates, the above 6 per cent inflation, the curb on lending to the real estate and infrastructure sector, the yen carry trade, the Chinese markets and Alan Greenspan announcing probability of slowing down of the US economy in the next three-four quarters.
