Business Daily from THE HINDU group of publications
Thursday, Nov 02, 2006
ePaper
Business Daily from THE HINDU group of publications Thursday, Nov 02, 2006 ePaper |
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Markets
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Stock Markets States - Tamil Nadu Our Bureau
Market trends Domestic money will drive the markets far more than the FII flow in the next few years This will be due to favourable factors such as electronic trading platform, growing wealth and increased tax compliance
MR C. RAVINDRAN
Tiruchi , Nov. 1 Stock market returns seem to follow a seasonal pattern. Resemblance to seasonality and Sensex returns have been established in the studies of Sensex movements made by Morgan Stanley-Asia over the past 25 years, said Mr C. Ravindran, Managing Director, Wealthmax Enterprises Management Pvt Ltd, Bangalore. The studies indicate that positive returns are assured between November and February and from June to July while March and October are months with negative returns. Positive performance in February is linked largely to pre-Union Budget expectations following which the market has tended to sell off, and December returns are linked to speculative activity just ahead of January allocations by global investors. Adding up of the 25 years of returns between November and February has delivered an annualised median return of 45 per cent over these months, explained Mr Ravindran, inaugurating the activities of the Business Line Club for the current year at the Department of Management Studies (DOMS), National Institute of Technology - Tiruchi (NIT-T).
Domestic money
Confluence of capital expenditure and consumption cycle augurs well for a higher, irreversible and bottom-up driven structural economic growth exceeding the current 8 per cent. Domestic money that is likely to enter the equity market facilitated by favourable factors such as electronic trading platform, growing wealth and increased tax compliance (favourable tax regime) will take this proportion of equity to 15 per cent by 2010-11, reflecting in domestic savings of about $45 billion. It fell from 17.4 per cent in 1991-92 to 1.1 per cent in 2004-05, but rose to 4.9 per cent in 2005-06. Domestic money will drive the markets far more than the foreign institutional investments flow in the next few years. In his interaction with students, Mr Ravindran emphasised that mutual funds were a better option.
Other speakers
The Director of NIT-T, Mr M. Chidambaram, expressed eagerness to organise a series of special lectures and quiz programmes under the aegis of BL Club. Mr G. Kannabiran, Professor, DOMS, presented a note on two awards constituted on the occasion: `Dr. Ibrahim Prof. Seetharaman Award for Excellence' and `Prof. Thirumalairasan Memorial Award'. The Founder Head of DOMS, Mr S.H. Ibrahim, the serving Head, DOMS, Mr J. Raja and Deputy Regional Manager (Circulation), The Hindu, Mr K. Chandrasekaran, offered felicitations.
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