By Gyanendra Kumar Keshri, IANS,
New Delhi : Indian stock markets are likely to gain 15-18 percent in 2011 on the back of an estimated 8-9 percent economic growth with robust performances by telecom, auto, banking and financial stocks, says France-based $1.2 billion consultancy Mazars.
“Economic growth is expected to remain robust with 8-9 percent. The market should grow double this rate. We expect 15-18 percent rise this year,” Viraf Rustom Mehta, director for assurance and risk advisory services in India with Mazars, told IANS.
“Telecom stocks look interesting. Despite the odds, the sector should do well. Growth in the banking and financial sector is also good,” said Mehta, adding strong growth and proposed reforms, especially in insurance and pension, would help rally in financial stocks.
The government proposes to increase the foreign direct investment (FDI) cap to 49 percent in the insurance sector from the current 26 percent. The Insurance Amendment Bill that proposes to raise the cap has been pending before parliament since 2008.
“Major global insurance players already have a presence in India. Raising the cap will give a big fillip to the industry,” said Mehta, who is a member of the expert committee on banking and finance of Associated Chambers of Commerce and Industry of India (Assocham).
The sensitive index (Sensex) of the Bombay Stock Exchange (BSE), which gained nearly 18 percent last year, would scale a new high in 2011, said Mehta.
After hitting a record closing of 21,004.96 points Nov 5, the 30-share bellwether index finished 2010 at 20,509.09 points, with a gain of 17.43 percent over the previous year close. The Sensex had scaled an intra-day high of 21,206.77 points Feb 10, 2008.
“The Indian equity market is fairly balanced. Given the economic growth outlook, we hope the key indices will scale a new high this year,” said the Mazars executive.
He said foreign institutional investors (FIIs) — which had pumped in a record $28.83 billion in Indian equities last year against $17.46 billion in 2009 and a net sale of $13.135 billion the year before — would continue to invest in Indian equities.
“I don’t see any reason for a substantial decline in FII inflows. This year also it should remain around what we received in 2010,” he said.
Mehta was also gung ho on India’s realty industry — the index for which performed the worst among 13 sector-specific indices in 2010 with a fall of 25.92. He expected the index to rise 10-15 percent price in near term.
“It may happen this year or next. We expect a moderate correction place soon.”
On Mazars’ India plan, Mehta said the company aimed to double its India business in two-tree years. “We have an ambitious growth plan for India. Currently we employ 500 people and plan to double the strength in two years. We will also open new offices and expand our reach.”
France-based Mazars, which has a $1.2 billion turnover, employs over 12,500 professionals in 56 countries. It has nine offices in India, including New Delhi, Mumbai, Bangalore and Pune.
(Gyanendra Kumar Keshri can be reached at [email protected] and [email protected])