Grant Thornton Index shows strength against other indices

Tuesday, April 12, 2011 | Posted by: Grant Summers
Categories: India, India Watch Issue 12 | Tags: business, India, finance, investment, economy, Grant Thornton, growth, India Watch, UK, LSE, infrastructure, South Asia Group, Grant Thornton India, aim, South Asia, Capital Markets, Fiona Owen, FTSE, IT, India Economy

For the first quarter of 2011, the Grant Thornton India Watch Index* made a 1.19% gain, which proved to be the only index to perform positively in the quarter in comparison to the FTSE100, FTSE ASEAN, FTSE AIM All-Share, FTSE AIM 100 and FTSE AIM UK 50. 

When looking at the previous 12 months the India Watch Index gained 7.88% which compares favorably against the FTSE 100 which rose by only 2.05%. The FTSE AIM All-Share Index and FTSE AIM UK 50 also experienced a rise, reflecting the sustained growth of the AIM market.

The top three performing stocks during the fourth quarter of 2010 were India Energy, which gained 25.61%, Infrastructure India which gained 25.60% and Indus Gas which gained 22.38% and which having listed in June 2008 has consistently been one of the top three performers in each quarter.

The three lowest performing stocks in the previous quarter were India Hospitality Corp., which fell by 43.59%, DHIR India Investments, which fell by 42.63% and Hirco, which fell by 40.26%. The best performing stocks over the last 12 months were Oilex (255.56%), CBay Systems Holdings (61.27%) and Indus Gas (49.75%).

Best and lowest performers for Q4 2011

Percentage change	Last quarter	Last 12 months
	1 Jan 2011 to 31 Mar 2011	1 Apr 2010 to 31 Mar 2011
Indus Gas	22.38	49.75
Infrastructure India	25.60	36.52
India Energy	25.61	-64.73
India Hospitality Corp.	-43.59	-43.59
Dhir India Investments	-42.63	-42.63
Hirco	-40.26	-69.91

 

Best and lowest performers for past 12 months

Percentage change	Last quarter	Last 12 months
	1 Jan 2011 to 31 Mar 2011	1 Apr 2010 to 31 Mar 2011
CBay Systems Holdings	1.09	61.27
Indus Gas	22.38	49.75
Oilex	7.87	255.56
Hirco	-40.26	-69.91
India Hospitality Corp.	-43.59	-43.59
Indian Energy	25.61	-64.73

 

With regard to the two largest market cap Indian entities on the London markets - Essar Energy and Vedanta Resources - Essar Energy finished its first quarter of trading down 18.43%. Essar has struggled to maintain its share price in recent months despite making progress on the construction and overhaul of its refineries and power stations. Its shares peaked at 589.5p in December but have since slipped back. Essar was spun out of Indian conglomerate Essar Group in a £1.3bn IPO last April. An analyst at Credit Suisse described the company as an “unrivalled growth proposition”.

Vedanta Resources also fell by 5.48% in the first quarter of the year. There was hope that the proposed $9.6bn takeover of Cairn Energy’s Indian assets would boost the company’s share price through the increase in production from Cairn India’s Rajasthan fields to 300,000 barrels a day (about 30 per cent of India’s domestic production) but India’s government has said it would not approve the takeover amid deep divisions within the cabinet about how best to resolve a dispute over royalty payments.

Fiona Owen

Partner, Head of Capital Markets for South Asia Group

Grant Thornton UK LLP

* The India Watch Index consists of 31 Indian companies listed on AIM or the Main Market (excluding GDRs). We only consider companies to be Indian if they are domiciled in India and/or foreign companies holding Indian assets or Investment companies with Indian promoters. The index has been created via Datastream, a Thomson Reuters product and is weighted by Market Value. To avoid distortion of index trends, the two largest market cap entities, Essar Energy and Vedanta Resource, are excluded.

** Data sourced from Thomson Reuters.

Other articles in this issue of India Watch include:

New M&A wave witnessed by India Inc.

Sustained growth expected for India economy

India business optimism soars but skills shortage threatens growth

India Union Budget 2010-11: A reflection