Investors Reap Rich Gains As Poll-Related Consumption Stocks Spurt
NEW DELHI: Stock market seems to have its own favourites when it comes to betting on the polls-related consumption boom this election season.
With the battle for electoral supremacy picking up a fervent pace, nimble-footed fund managers, high net-worth investors and even some foreign institutions are buying into these "consumption plays" available once every five years alongside Lok Sabha polls.
Not to be left behind, retail investors are also buying these shares to reap polls-related gains, pushing the share prices of many of these companies higher by 10-50 per cent in the past one month.
While the benchmark index Sensex has itself gained about 6.8 per cent in 30 days and is above 22,500 level after hitting record highs for the eighth straight session, stocks perceived to benefit from elections have shot up as much as 50 per cent in a month.
Even as bets on the new government getting a strong mandate are abound in what some say is a sure-shot 'hope rally', experts feel many listed firms are likely to benefit, at least in the short-term, from poll-related spending. This is driving investor interest in these counters, amid rising trading volumes.
"Poll-related spending comes into listed firms through media, automobiles, telecommunications, paper, liquor etc. Investors pick up fundamentally strong shares and hold them to benefit from this sentiment. It can land good gains pretty quick but is risky as well," Geojit BNP Paribas head of research Alex Mathews said.
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