Posted: 14/May/2007 at 9:42am

Reading newspaper in the morning:

Reference:            The Economics Times PUNE MONDAY 14 MAY 2007

Capital goods index soars on core thrust - Beats Benchmark, Sectorial Indices in past 5-7 years

---- The BSE Capital Goods is one such index, which can surely boast about the fact that it has outperformed the benchmark Sensex in each of the past five calendar years. Further the index has outperformed all the sectorial indices too, if the seven-year average is taken into consideration----

“Companies in the infrastructure sector have great future and stock prices reflect growth,” says Manish Sonthalia, VP (equity strategy), Motilal Oswal Securities. “The outlook is on future growth and there is no doubt that the stocks that are a part of the capital goods index would continue to grow for the next 3-4 years, The government’s increased focus on infrastructure in the 11^th plan provides an excellent opportunity to the capital goods sectors,” he added. -----------

The index comprises stocks like L&T, Bhel, ABB, BEL---------.However, Bhel and L&T accounting for a collective weight age of nearly 56% of the index.

“While most of these companies have a strong order book, in some of the cases, three-year sales have already been built in” adds Mr. Sonthalia. The PPP (public private partnership) model has also been successfully tried and going ahead one will see more of such examples, he added. --------

In the past seven years, the index has generated and average return of 42.17% as against 16.34% of the Sensex. --------

PKB