This year has been a see-saw ride as far as the Stock Markets are concerned. The Markets witnessed one of the worst falls but staged a comeback of sorts during the later part of the year. The fall was meteoric owing to the global economy slowdown which turned out to be disastrous for the Indian Stock Markets.
The Shareholders wealth tumbled like nine pins. But, at the same time the fall bought the valuations of stocks to decent levels exposing new investment opportunities. When the markets tanked to 8k levels, the investors were too sceptical to invest. But, the Indian Economy recovered at a good pace and things started turning around.
The markets saw some real good short term bull rallies which took the BSE Sensex close to 12k levels. With 12k levels sustaining for a short duration, it was clear that the markets are heading for a uptick. The rise to current levels of 17k has been a free ride so to speak.
But, of all this see-saw ride in the Stock Market, who made the maximum money for Investors. There is little room for surprises here though. It was indeed Reliance Industries.
Reliance Industries has emerged as the biggest wealth creator for the third time in a row. It has created Rs 1,514- billion worth of wealth contributing 15.6 per cent of total wealth created in FY 09. (Source: Motilal Wealth Creation Study)
This is not too surprising given the DNA of Reliance Industries.Reliance has played the Indian Stock Markets like no other organization has. The founder knew all tricks of the trade and is still remembered as the master of Stock market dynamics.Moreover, Oil and Gas will always be a sector which will drive wealth creation. Being in short supply, it is a pricey commodity and Reliance Industries is pretty much the market leader in the Indian Sub-Continent. ONGC comes close but the government subsidies take its toll on its profit margins.
Another interesting result from the study is UNITECH , which has been termed as the fastest wealth creator. It has been my personal favourite over the years. The stock being from the realty sector is bound for volatility but makes for a very profitable short to medium term buy. Unitech has always been the punters bet and a traders delight.
To get an idea of the the price volatility that Unitech has witnessed for the past two years, its best to look at the graphs from FY08 to FY09
But, it did rise like a phoenix(from its shattering lows) of the year ending 2008. Here is the Unitech price movement from the year 2009 to Dec 2009,
The stock rose from its lows of 24 to highs of 118 levels and the stock mostly saw a consistent uptrend for the given period. That’s almost 5x gains for the year. No wonder, it was the fastest wealth creator for FY09. However, as is clear from the two graphs, a stock like UNITECH may not be the most prudent choice for a long term horizon. Given the cyclic nature of realty/infra sector, it only makes sense to keep a profit booking strategy in a stock like Unitech.
The long term portfolios will still take considerable time to show some green but the investors who made fresh purchases during the start of the year are definitely sitting on decent profits.
