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Power sector stocks cheer up
Jayanta Mallick
Kolkata
,
May 26
THE stock market is trying to revalue power sector stocks in the changed political scenario. The valuations last week took a knock over apprehensions that power sector reforms may slow down.
The new Union Power Minister's initial assurance, after assuming office, that the Electricity Act of 2003 would not undergo any serious amendments has cheered up the stock market.
The power sector stocks including that of power equipment companies and utilities, showed a mixed trend. Some of the stocks in this sector such as Tata Power, CESC, Neyveli Lignite, Siemens, BHEL, Jyoti Structures and KEC International closed as gainers. The Reliance Energy counter, after showing a sharp rise in its price, finished marginally lower. In fact, all the sectoral stocks could not hold on to their peak levels achieved till end of the session today on profit-taking.
According to Mr Ketan Thacker of Anagram Stockbroaking, the Minister's suggestion that the State Governments providing free power must make suitable provision in their own Budgets was a positive signal for continuation of the reforms.
The Minister is reported to have said that the new Government would try to ensure financial closure for independent power projects of 8,000 MW capacity by June this year.
According to Mr Gul Teckchandani, CIO of Sun F&C, India could hardly afford to stall the power sector reforms. "Political posturing apart, it is widely recognised that the sheer economic needs would drive the nation to overcome deficiencies in generation, transmission and distribution. China has also gone through the dilemma of preferences between power and the poor," he commented.
In his opinion, for these reasons power stocks are long-term bets.
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