Mumbai, Nov 12: After remaining in the backburner for almost a year, old economy stocks are back in the limelight. A number of scrips from this sector, after dipping to their lowest level in the last few months, have been witnessing an upward movement.The rise has been in the range of 20 per cent to 50 per cent in the last one month and the prime mover for this change was the increased interest of the foreign institutional investors (FIIs) in these stocks.
On the other hand, some of the stocks from the new economy sector have been witnessing a downturn in their fortunes during this period.
As the market prices of most of the old economy scrips were quoting much below their book-values and the continuous rise in their profitability and the hidden assets have made them attractive for the institutional investors, market sources said.
In addition, the recent takeover threats to two leading companies - Bombay Dyeing and GESCO Corporation - have also brought the intrinsic worth of these companies, with lot of cash reserves, to limelight.
The demand for the brick and mortar companies across the globe as represented by the rise in the Dow Jones Industrial Average (DJIA) during the period, had also led to a shift in the FIIs perception about these companies.
Some of the top companies which witnessed the rise in their stock prices since October 2000 include Ashok Leyland, rising from Rs 35 to Rs 44 (a gain of 21 per cent), ITC Bhadrachalam from Rs 42 to Rs 56 (33 per cent), Bharat Petroleum up from Rs 160 to Rs 193 (21 per cent).
GE Shipping (up 25 per cent), Ballarpur Industries (up 37.5 per cent) and Philips (up 66 per cent) were the other companies which saw similar rise in stock price.
While GE Shipping's decision to buy-back the shares have fuelled the rise, Ballarpur scrips was up due to the alleged takeover threat by the jute baron Arun Bajoria.
In the case of Philips, the Dutch parent's decision to increase its stake from 51 per cent now to 74 per cent might have given the impetus to the current rise.
During the same period, the Sensex dropped from 4135 points to the Friday close of 3941 and S&P CNX Ninfty dipped from 1282 to 1241 points.
Even though there has been a fall in the indices, Foreign Institutional Investors were actively buying in the domestic market, and in November alone, they have pumped in over Rs 1,000 crore till November 8.l
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