SME Times News Bureau | 10 Sep, 2019
The ongoing economic slowdown has severely hit stocks value
of automobile and manufacturing companies, with majority of them losing one-third
share value in a year.
Data from the bourses suggest that in just the past one year, the automobile
and manufacturing companies, have seen over one-third of their share value
getting eroded, on average, indicating a sharp decline in these companies'
abilities to raise capital in the market.
During the period in consideration, the Nifty metal index has lost the most
among the 11 sectors constituting the benchmark index.
Manufacturing companies like SAIL and Jindal Steel, which constitute the metal
index, declined by 35 per cent, on an average
Not a distant second was the auto index, which fell over 33 per cent.
Among the 15 constituent stocks of the auto index, Tata Motors, Motherson Sumi
Systems and Ashok Leyland have been worse hit, losing 55 per cent , 66 per cent
and 51 per cent, respectively. Bajaj Auto seems to have bucked the trend,
coming down merely 2 per cent amid companies severely hurt owing to the
slowdown.
Latest data shows that automobile sales for the month of August hit the lowest
since 1997-98.
Steel companies are witnessing a similar trend. The state-owned Steel Authority
of India (SAIL) has lost over 57 per cent, while Jindal Steel has also shed
over half of its share value in the last one year.
Six of the 15 companies constituting the index have lost over 40 per cent of
their share value.
The state-run bank index - Nifty PSU Bank index - despite a slew of measures
that have been announced for the sector, has yet to regain investor interest.
The PSU (public sector undertaking) bank index has declined by 21 per cent
during the same period.
The Nifty pharma index - investment in which firms are considered to be
relatively safe during downturns, and, therefore, called defensive investments
-- fell 22 per cent.
The Nifty media index also also shed over 30 per cent.