Jul 31, 2009|
Spring time returns for IPOs
With Indian stock markets emerging as one of the best performers in 2009, more and more companies are being emboldened to come out with IPO issues. More so after the success of two big IPOs viz. Mahindra Holidays and Adani Power. As per a leading business daily, in order to fuel their huge expansion plans, IPOs worth Rs 160 bn are being lined up by India Inc for the remainder of the fiscal. It goes without saying that a bulk of the fund raising, Rs 100 bn to be precise, will come from companies from the infrastructure space in the sphere of power, shipping, energy and construction.
Infact, there could be quite a few names that would be familiar to investors what with the global financial crisis scuttling their previous plans. But now with money once again finding its way into risky asset classes such as equities, companies are making a dash for the IPO markets in a bid to take their businesses to the next level of growth. However, before making a beeline for the same, it would be sensible if investors take a hard look at the fundamentals of the company that is seeking to raise capital. A proven track record should be a pre-requisite especially with complex and large gestation projects such as power and above all, valuations should make sense. Please bear in mind that IPOs like equity investing should be viewed as a platform to earn returns from a long-term perspective and not for making listing gains.
IMF Chief says recovery not possible in 2009
So, the stockmarkets globally have been rallying and corporate results are not as bad as they were last year. Does that mean that a recovery is around the corner? The MD of IMF Dominique Strauss-Kahn believes otherwise and is of the opinion that 2009 will still remain a bad year. What's more, he believes that unemployment will continue to pose a problem even when the economy has recovered. So those who were looking for a quick recovery will have to brace themselves for a disappointment. Strauss-Kahn does not have a soft corner for the investment banks and has left no stone unturned in labeling the bonuses that they have received as 'scandalous'.
Also, while the dollar's status as the world currency has been questioned in recent times, he believes that since the US is still the most powerful economy, dislodging the dollar from its position is not something that the IMF chief envisages in the near future at least. And he is not the only one harboring the opinion. A lot of experts have toed the same line observing that unless an economy emerges that challenges US economic size, dollar would be difficult to remove from its pedestal, its trillion dollar deficits notwithstanding.
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