Small, mid-cap stocks are the new wealth creators

MUMBAI:
Ever heard of Energy Development Carbon Dioxide (EDC)? Not if you are not in measure with the
investments of Bollywood ace star Amitabh Bachchan and his brother Amar Singh. The couple clasp 10 hundred thousand and 2.5 hundred thousand shares of this small-cap company (by BSE
classification), according to the shareholding form filed as on September 30,
2007. This relatively unknown
company have been inch the thick of action, soaring nearly 200% in the past one
month. That do the investings of these personalities worth Rs 26.7 crore and
Rs 6.7 crore, respectively, on the footing of the current market
price. EDC is only one of the
several small- and medium-cap banals which have got provided mind-boggling returns
in a short period. A figure of SME pillory witnessed a smart mass meeting on Wednesday
when the BSE’s Smallcap index closed for the first clip above the 10k
level, ending with additions of 238 points, or 2.4%, astatine 10,039. The Midcap index jumped 172
points, or 2.1%, to 8,286. The two indices, in fact, have got outperformed the
broader indices, gaining 14% and 14.5%, respectively, against the Sensex’s
rise of 13.5% since October 19, 2007. Unlike in the past, the
interest in little pillory have been wider, which is also reflected in healthy
advance/decline ratio in B1, B2, S, Deoxythymidine Monophosphate and deoxythymidine monophosphates groupings which generally house small-
and medium-cap stocks. Out of 2,454 scrips traded in these groupings on Wednesday,
as many as 1,739 recorded additions while 663 lost ground, resulting in an
advance/decline ratio of 2.6
times. The sudden rush in
second-rung pillory may have got got brought some alleviation to little investors, but brokers
have a word of caution. In the absence of any major fund-based buying, they
suspect that the mass meeting in many pillory may have got been triggered by manipulation. Brokers state there be good
investment chances in small- and mid-cap space, which investors should
find out with the aid of proper research and penetration into the background of
concerned companies. “Most pillory have got rallied because of herd mentality. Investors, no doubt, are chasing good stories, but they are also falling quarry to
rumours and bad negotiation in the market,” said Karvy Stock Broking
vice-president Ambareesh Baliga. Of late, a batch of involvement is
observed in pillory of working capital commodity and public sector companies from other
sectors. The bovine spongiform encephalitis Capital Commodity and PSU indices jumped 574 points (2.8%) and 396
points (3.9%), respectively, on Wednesday. Capital commodity pillory have got emerged as
the greatest outperformers in the current market. Analysts impute their gains
to break industry prospects in the aftermath of the government’s greater
emphasis on accelerating infrastructure
growth. “Order book of
most working capital commodity companies is full, reflecting high-growth potentiality in the
next few years. PSU pillory have got been rising because the marketplace have begun to
factor in evaluation of excess assets possessed by them,” said Religare
Securities’ Kiran Vaidya caput (investment banking).