NIFTY INDEX
charts software courtesy www.advfn.com
___________________________________________________________
Here's one more reason why this bull market is so different from the ones that preceded it. Value or high-dividend yield stocks have surged, outperforming growth stocks in the past three months. Typically, growth stocks tend to do well in a bull market as investors pay a premium
for companies sensitive to changes in economic growth. But amid the
slump and investment proceeding at snail's pace, growth stocks aren't
exactly hot favourites. The MSCI India Value index outperformed
the MSCI India Growth index by more than 5% in the past three months.
As there is uncertainty over the economy
recovering in the next one or two years, analysts believe investors are
poised to shift to value stocks to earn a better return. "For
the past few months, except a few consumer goods, most of the value
stocks have done exceptionally well," said Gaurav Dua, head of research
at Sharekhan. "There is uncertainty over the recovery of the Indian
economy and, hence, investors (tend) to put their money in bigger value
companies which will begin to outperform the growth companies." Growth stocks generally have high P/E and P/B ratios and are expected
to continue growing at an above-average rate relative to the market.
Value stocks are those that tend to trade at a lower price relative to
their fundamentals. Value stocks generally have good fundamentals with
high dividend yield, but have low P/E and P/B ratios.
During the bear phase in July-August last year, all kinds of stocks -
small, large, growth and value - underwent correction. In the rebound
from the 2013 low on August 21, clearer patterns have emerged as value
stocks have beaten growth. For instance, the MSCI India Value index has
risen 7.06% in the past three months whereas the MSCI India Growth index
gained just 2.13%. The BSE Sensex has risen 4% during the same period. The Sensex has recovered nearly 14% since the August low.
Historically, growth has always outperformed value stocks. That's seen, for example, in the performance of the MSCI India indices. In the past one, two and five years, MSCI India Growth has given a return of 14%, 44% and 155%, respectively. On the other hand, MSCI India Value has given a negative return of 5% in the past one year, while gaining 19% and 86% in two and five years. "One of the main reasons for value stocks to beat growth in the last few months could be value stocks have been beaten down badly for the past two years till August 2013. On the other hand, valuations of the growth companies, especially IT, pharma and FMCG (fast-moving consumer goods) have been overstretched," said G Chokkalingam, founder, Equinomics Research & Advisory.. .. .. .. .. .. .. .. .. source:economictimes.com.. .. .. .. .. ..
 |
Historically, growth has always outperformed value stocks. That's seen, for example, in the performance of the MSCI India indices. In the past one, two and five years, MSCI India Growth has given a return of 14%, 44% and 155%, respectively. On the other hand, MSCI India Value has given a negative return of 5% in the past one year, while gaining 19% and 86% in two and five years. "One of the main reasons for value stocks to beat growth in the last few months could be value stocks have been beaten down badly for the past two years till August 2013. On the other hand, valuations of the growth companies, especially IT, pharma and FMCG (fast-moving consumer goods) have been overstretched," said G Chokkalingam, founder, Equinomics Research & Advisory.. .. .. .. .. .. .. .. .. source:economictimes.com.. .. .. .. .. ..
.. .. ..Could the market be turning? After a surge late in 2013 signalled improved
prospects, it's not really been a Happy New Year for the Sensex so far.
Read more at:
http://economictimes.indiatimes.com/articleshow/28528755.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
http://economictimes.indiatimes.com/articleshow/28528755.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
MUMBAI:
Could the market be turning? After a surge late in 2013 signalled
improved prospects, it's not really been a Happy New Year for the
Sensex so far.
Foreign institutional investors (FIIs), so full of certainty at the end of last year, seem to have again been assailed by doubt as domestic political worries, the possibility of non-state companies being examined by the government auditor and global economic factors weigh on the markets.
Foreign institutional investors (FIIs), so full of certainty at the end of last year, seem to have again been assailed by doubt as domestic political worries, the possibility of non-state companies being examined by the government auditor and global economic factors weigh on the markets.
MUMBAI:
Could the market be turning? After a surge late in 2013 signalled
improved prospects, it's not really been a Happy New Year for the
Sensex so far.
Foreign institutional investors (FIIs), so full of certainty at the end of last year, seem to have again been assailed by doubt as domestic political worries, the possibility of non-state companies being examined by the government auditor and global economic factors weigh on the markets.
Foreign institutional investors (FIIs), so full of certainty at the end of last year, seem to have again been assailed by doubt as domestic political worries, the possibility of non-state companies being examined by the government auditor and global economic factors weigh on the markets.
No comments:
Post a Comment