Most A group scrips pierce Dec '96 lows

Monday, November 17 1997

Most A group scrips pierce Dec '96 lows

Sanjay Sardana

MUMBAI, November 16: The worst may not have been over for the Sensex yet, but as many as 45 scrips in the BSE group A have already pierced their December 1996 levels. However, the BSE Sensex at 3569 points today is 30 per cent higher than its December 1996 low of 2745.

Garware Polyseter's scrip at Rs 24.25 is trading at a 74 per cent discount to its December 1996 level of over Rs 93. Scrips of Crompton Greaves, Ceat, SKF Bearings, Thermax, Garware Wall Ropes and Ashok Leyland too are trading lower by more than 35 per cent than their last December levels. These set of scrips, which have been very sensitive to the recent fall in the index, are likely to register a comparatively lower fall in case of a further slide in Sensex.

The analysis has been based on the prices in December last year as that was the time the markets went into a tailspin and nosedived after a disastrous first half corporate performance for 1996-97. Also, the scrips of companies who have announced bonus have been left out.

Barring a few scrips, most of these 45-odd scrips were quick enough to bounce back during the rally which started with the new year and peaked when the Sensex touched 4548 points on August 5, 1997.

So what's holding the Sensex, when most of the group A scrips have almost touched their bottoms? The Sensex heavy weights like Hindustan Lever, ITC , Hindalco and SBI have held steady and continue to trade well over their December '96 levels. This has restricted the Sensex downslide.

Interestingly, PSUs with a relatively heavy weight in the BSE Sensex like MTNL, HPCL and BHEL have outperformed the Sensex. These are now trading well above their last December level. Overall, at least 53 scrips are trading at a premium to their respective December 1996 prices. Hero Honda has yet again emerged as the winner with its scrip at Rs 941 is trading more than three times its level in December 1996. Other outperformers include, BPL , Dr Reddy's Lab, Reckitt & Colman, Pfizer, Parke Davis, SmithKline Beecham Pharma and Britannia. These scrips, even after the recent correction of nearly 1000 points from the high of 4548, are now trading much higher than the December levels.