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Stocks rally pushes investors’ wealth past Rs 70 trn mark

This article was posted on Sep 14, 2010 and is filed under Press Releases

A vertical-looking stock market rally pushed investors’ wealth in the country to over Rs 70,00,000 crore level today — a feat achieved after a gap of over 32 months.

As the market benchmark Sensex followed up yesterday’s 409-point rally with another 139-point jump today, the total investor wealth, measured in terms of valuation of all the listed companies in the country, soared to Rs 70,06,647 crore.The fattening investor wealth was accompanied by a rally in the Sensex, which also touched its highest level in 32 months at 19487.02 points in intra-day trade today. The index settled a little lower at 19,346.96 points at close.

Both the index and investors’ wealth are not far behind from their life-time peaks achieved on January 10, 2008. On that date, the Sensex had peaked at 21,206.77 points, while investors’ wealth was at over Rs 72,00,000 crore. The investors’ wealth had crossed Rs 70,00,000 crore level for the first time in December 2007.

Toeing global trends, the stock markets here had in early January 2008 touched new peaks but thereafter went into a tailspin and the fall continued for many months before an uptrend became visible in March 2009.

From the lows reached in early March 2009, the Sensex has grown by over 10,000 points, while the investors’ wealth has grown by over 2.5 times from about Rs 28,00,000 crore. In past six days alone, the Sensex has grown by over 1,000 points.

However, it is the promoters who share the bounty in a big way. From the overall gain of over Rs 42,00,000 crore in the ongoing rally, now in its 18th month, the value of shares held by promoters in about 5,000 listed companies has grown by over Rs 25,00,000 crore.

In comparison, the retail investors’ share in the overall gain is just about Rs 4,00,000 crore, while domestic and foreign institutional investors have seen their portfolios growing by about Rs 12,00,000 crore.

On an average, the promoters have approximately 60 per cent stake in Indian stock market, while retail investors’ shareholding is pegged at less than 10 per cent and remaining are with institutional investors like FIIs, Mutual Funds, insurance companies and other financial institutions.

Accordingly, the valuation of promoters’ stake has now grown to nearly Rs 42,00,000 crore, while retail investors’ total shareholding is worth about Rs 4,00,000 crore.

Out of this total valuation of over Rs 70,00,000 crore for about 5,000-odd listed companies, the 30 blue-chip companies that make up the Sensex have seen their collective market value to Rs 29,26,010 crore, as per the data available with Bombay Stock Exchange.

Besides, the 500 biggest companies have got a market cap of over Rs 65,00,000 crore, while the remaining about 4,500 companies have a collective market value of less than Rs 5,00,000 crore.

source: Business-Standard

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