Stocks, which trade above Rs 100 irrespective of their par value, are fast losing investors? confidence. The number of such stocks has significantly decreased by slightly more than 55% to 397 on March 17, 2009, compared with 889 on March 17, 2008. The share of such stocks in the total number of stocks quoted on BSE has thus decreased from 31.1% to 15.4% during the same period. Stocks which are losing shine, mention may be made of Bharat Forge, Chennai Petro, Rolta India, Jai Corp,Godrej Industries, SAIL and Sintex Industries.
Harish Menon, executive director, H-Zone Capital said, ?A lot of these stocks had benefited from above-average valuations from the investors due to an overall buying spree in the equity market. With markets correcting and stretched valuations contracting, these stocks have been forced to shed a large part of their gains.In many cases, lower profitability due to economic downturn has also hampered the stock prices.?
During the one-year period, the number of stocks below Rs 10 increased from 467 to 803.Their share in the total number of stocks quoted on the bourse increased from 16.3% to 31.1%. The number of stocks quoted between Rs 10 and Rs 25 increased from 540 to 629. The share of this group of stocks in the total number of stocks has increased from 18.9% to 24.4%.
Similarly, in the range of Rs 25 to Rs 50, the number of stocks decreased from 496 to 440 during the study period.The share of these stocks has decreased to 17.1% from 17.3% in the year ago period.
On March 17, 2009, there were 181 stocks being traded in the Rs 50-75 range, while the number of such stocks was 278 on March 17, 2008. The share of this group of stocks decreased from 9.7% to 7.0%.
In the range of Rs 75-100 group, the number of stocks decreased from 188 to 128 during the period under review. Their share in total BSE stocks marginally decreased from 6.5% to 4.9%. Some stocks from this group too have moved to the above Rs 100 category.
An analyst from the market said: ? Poor earnings growth in the middle level companies have led to decrease in market interest in these stocks leading to significant price depreciation.? From the above analysis one thing is clear that the number of stocks has decreased in all the price range during last one year except in the range of below Rs 10 and in the group of Rs 10-25 range.