The Hindu Business Line : Major biz and finance developments in 2005

The year 2005 brought with it many disasters. From the killer quake in Kashmir and the cyclones that threatened Tamil Nadu and Andra Pradesh to the unprecedented deluge in Mumbai and many parts of Tamil Nadu. Yet there were positives too. The economy progressed. Democracy and the will of the people endured.

Almost all sectors of the economy seem poised for another good year. Many highly qualified Indians employed in the US and other foreign countries are returning home. The telecommunication and IT sectors have grown by leaps and bounds and even extended to rural areas. Tourism is picking up. States such as Kerala, Goa and Rajasthan have benefited enormously.

The Sensex hit an all-time high and public confidence in the stock market grew. The standard of living of people also improved and is likely to increase in the years to come.

V. Venkitasubramanian, Kochi, vvsmani2002@yahoo.co.in

The Sensex crossing the 5000-6000 points barrier and moving towards the 10,000 mark has to be the biggest event in business in 2005.

V. Mani, CMC Limited, Chennai, mani.v@cmcltd.com

Last year saw the share market boom. The Sensex closed at 9,398 recording a 42 per cent increase in one year.

The market is attracting Japanese, South Korean and Australian funds. The price index of small-scale shares increased by more than 70 per cent. Crude oil prices reached an all-time high. And so did foreign fund deposits.

T. V. Jayaprakash, tv.jayaprakash@rediffmail.com

The global stock market boom, integration of various financial markets, India emerging a major financial market, hardening of interest rates, consolidation in the industry with many mergers and acquisitions were among the highlights of 2005.

S. Krithivasan, SBI, s.krithivasan@sbi.co.in

Cobrapost.com and Aaj Tak conducted the Questions for Money sting operation. Parliament and its ethics committee appropriately expelled the guilty.

Ravi Sharma, Jammu (Tawi), ravi_sharma580@yahoo.com

The year 2005 was an eventful one comprising many major business tie-ups and landmark deals. The Look East policy was initiated and nuclear deals were sealed. GDP looked promising. However, the revolution in the IT sector and the sensational rise in the Sensex were by farthe outstanding developments.

A. Jacob Sahayam, Thiruvananthapuram, jacob_sahayam@yahoo.co.in

The Sensex crossing the 9,000 mark is one major development in business in 2005. The upsurge has been attributed to the consistent performance of the corporate sector during the last three years, portfolio inflows, investment by mutual funds, and black money turning white. Overall, the advance-decline ratio was also in favour of the bulls. India is now a hot destination for FIIs — the number of FIIs registered with market regulator has increased substantially.

The FIIs are investing heavily in the equity market; they pumped in more than $10 billion in 2005. A foreign broking firm concluded that Indian stocks trade at a 30 per cent premium to the US price to book value (P/B) multiple, making it possibly the most expensive market in the world. Price-earning ratio was also seen as most over-valued among the emerging markets. Investors are reaping the benefits, mutual funds are booking profits, market capitalisation of corporate entities is heading north. Even the number of large-cap stocks has more than doubled in one year and now stands close to 100. Ditto for mid-caps. By the end of December, 161 companies graduated from small-cap to mid-cap segment on account of rise in market capitalisation.

The Sensex stocks had a higher price-to-earnings ratio than those forming part of MSCI's Emerging Markets Index. The market capitalisation of a single entity, that is, ONGC was more than the market capitalisation of all entities on Karachi Stock Exchange's index. Even at this level, it was being considered as the cheapest oil stock in the world. At the same time, this has resulted in penny stocks becoming much sought after.

This mechanism is ensuring that black money is being converted into white without hassle. However, doubts have been raised on the quality of FII inflows. Dr Ashok K. Lahiri, Chief Economic Adviser, Ministry of Finance, has cautioned against the `potential abuse' of the FII route by foreign investors. Let's hope that regulators of the money market (RBI) and the equity market (SEBI) will ensure that the Indian capital market does not become a casino where FIIs and money launderers play and go.

Anil Kumar Angrish, Senior Teaching and Research Associate, Finance and Accounting, Department of Pharmaceutical Management, NIPER, Punjab, anil_angrish@yahoo.co.in

Transparency is the buzzword. The key to development is opening up of core sectors to private participation with world-class technology.

M. V. Vimala, Electronics & Telecommunications Engineer, Secunderabad

The year past was fabulous. The major achievement was the soaring market sentiment that lifted the stock market by over 40 per cent. Hopefully, we will be leaders in Asia shortly.

M. Sunanda Ramachandra, Manager, NABARD, Hyderabad

As leaders in IT, we should now start competing in terms of quality. We should also develop the infrastructure sector.

M. Annapurna, Lecturer, Physics, Secunderabad

If stock market is the indicator of the economy, then the results are encouraging. I think it is the leadership of the Prime Minister that is helping the economy perform better by the day.

T. V. Siddharth, Aeronautical Engineer, New Delhi

The economy is looking encouraging.

T. V. B. Rohini, Forex Department, Vijaya Bank, New Delhi

The economy picking up is good news for business. Business houses are bullish and the common man is the benefiting. It is a win-win situation for all and I consider this as a major achievement.

T. V. Atchutram, Under Secretary, Ministry of Steel, New Delhi

The major development in the last year was our foreign exchange reserves going up. On the whole it was excellent year for business and finance.

M. N. Ravi Shankar, Executive Director, Lanco Electric Utility Ltd, Hyderabad

The investor got his returns higher than expected because of the stock market surge. The year 2005 can be termed as year of the happening.

M. Ramakrishna Rao, Secunderabad

The year saw many major changes — liberalisation of the financial sector and inflation being kept under 5 per cent. And GDP growth at around 8 per cent is a significant achievement.

M. Sitaramachandra, MBA student, Said Business School, Skoll Schollar - Oxford University, UK

The FII/FDI contribution towards business and finance is a major economic achievement. .

S. Sivasankaran, Senior Manager (Retd), Canara Bank, Salem

India is making giant strides in the industrial world. Its performance in the hardware sector is impressive. Mittal plans to set up one of the biggest steel plants in the world in Jharkhand. Another steel plant is being sanctioned in Orissa. Tata Steel is in acquisition mode entering into joint ventures with foreign units. SMEs are thriving. We are in a position to compete with China and North Korea.

India is evolving into an industrial giant, from its earlier brand image as the land of "cyber techies".

T. S. Sundareswaran, Consultant, New Delhi

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