Market cap up Rs 4,00,000 cr

Market cap up Rs 4,00,000 cr
ENS ECONOMIC BUREAU

Sensex gains 1,945 pts in '99
MUMBAI, DEC 31: The last year of the second millennium was a bonanza for investors. While the share prices and indices moved up and down during the course of the year, the benchmark Sensex finally closed above the 5,000 mark, taking the market capitalisation above the Rs 9,00,000 crore level.

Investors wealth, or market capitalisation (market value of all listed shares) shot from Rs 5,02,451 (as on January 31, 1999) to Rs 9,05,840 crore on December 30, 1999, making investors richer by over Rs 4,00,000 crore.The jump in market cap was contributed by infotech stocks like Infosys, NIIT, Wipro and Satyam. Infotech stocks now account for as much as 20 per cent of the total market cap. Infosys alone accounts for Rs 48,058 crore of the market cap. Wipro and Infosys clock nearly Rs one lakh crore market cap. Wipro even overtook Hindustan Lever (Rs 49,403 crore) to get the top slot in market cap ranking.

On the other hand, Reliance, ITC, MTNL and SBI struggled to keeppace with the newcomers from the infotech sector. Infosys share which closed at Rs 14,516 on the BSE on Thursday had taken a vault from Rs 1,464 registered earlier this year. Other software shares also showed similar movements, making their shareholders millionaires during the year. This means an investor who acquired 100 shares of Infosys for Rs 1.46 lakh earlier this year was worth Rs 14.51 lakh by Thursday.

The benchmark Sensex which was 3,060.34 on January 1, 1999 closed at 5,005.82, showing a whopping gain of 1,945.48 during the course of the year. It was a happy ending for the Sensex and the capital market. The stock markets have set the benchmark for the new millennium with the Sensex closing above 5000 for the second time this year.

Though the 5000-benchmark has been set, select market players are jittery, as they point out that at this stage the market has slipped into the hands of the operators. ``Unless the FIIs step in with big business, it would be difficult to sustain this level. We alsohave the danger of warehousing in anticipation of FII buying coming up next week. The true test will be known only next week,'' a broker said.

The year 1999 saw tremendous improvement in stock market infrastructure and increased investor confidence evident by the fact that cumulative investments by foreign institutional players crossed $ 10 billion since December 1992. Encouraged by the success of dematerialisation, the Securities and Exchange Board of India (Sebi) is all set to introduce rolling settlement and internet trading early next year.

Dematerialised trading in over 160 scrips by all investors (covering more than 90 per cent of the market capitalisation) can be considered a major achievement during the year. What is in store for the stock market in 2000? The norms for rolling settlement are in place and trading in ten scrips would be settled on rolling basis after every five days from January 10, 2000.

Come January 17, another 40 scrips will move into compulsory demat list taking the total to200 scrips for all investors and 500 scrips for institutional investors. The recommendations of the Kumar Mangalam Birla committee on corporate governance would come into effect from April 2000.

The Birla committee recommended that institutional investors may not have representation on the company boards and that lending institutions be allowed a seat on the company board in case there is a default or potential for default.