Though there was caution in the air due to the deluge of initial public offerings (IPO) that saw close to Rs 50,000 crore being raised from the primary markets, the bellweather sensex defied gravity to kiss the 15K mark on Friday.
The strong point marketmen identified during the current rally was the strong flow of liquidity into both the primary and secondary markets. Despite the two mega IPOs — DLF and ICICI Bank — that raised almost over Rs 18,000 crore in a single month, the secondary market continued its northward rally.
Pundits who had argued that these IPOs would send the secondary market into a tailspin due to drying up of liquidity are now ducking for cover.
Their scepticism though did seem justified. Their fears were based on the fact that through all of 2007, around Rs 33,485 crore was raised through IPOs. Add to this the fact that these two IPOs alone raised over Rs 18,000 crore in a single month. In 2006, the amount was raised through IPOs was just Rs 23,375 crore.
"What is commendable about this rally is the fact that it has come about despite a deluge of primary markets offers," said VK Sharma, head of research, Anagram Securities.
Lalit Thakkar, director-research, Angel Broking, said that the markets have scaled a new peak despite fears of a liquidity crunch. Given the bright prospects of the Indian growth story coupled with the comfortable liquidity scenario and the high appetite of investors for equities, even the mega issues scaled through comfortably without impeding the secondary markets, he added.
Source: http://timesofindia.indiatimes.com/...uidity_out_of_markets/articleshow/2183462.cms
The strong point marketmen identified during the current rally was the strong flow of liquidity into both the primary and secondary markets. Despite the two mega IPOs — DLF and ICICI Bank — that raised almost over Rs 18,000 crore in a single month, the secondary market continued its northward rally.
Pundits who had argued that these IPOs would send the secondary market into a tailspin due to drying up of liquidity are now ducking for cover.
Their scepticism though did seem justified. Their fears were based on the fact that through all of 2007, around Rs 33,485 crore was raised through IPOs. Add to this the fact that these two IPOs alone raised over Rs 18,000 crore in a single month. In 2006, the amount was raised through IPOs was just Rs 23,375 crore.
"What is commendable about this rally is the fact that it has come about despite a deluge of primary markets offers," said VK Sharma, head of research, Anagram Securities.
Lalit Thakkar, director-research, Angel Broking, said that the markets have scaled a new peak despite fears of a liquidity crunch. Given the bright prospects of the Indian growth story coupled with the comfortable liquidity scenario and the high appetite of investors for equities, even the mega issues scaled through comfortably without impeding the secondary markets, he added.
Source: http://timesofindia.indiatimes.com/...uidity_out_of_markets/articleshow/2183462.cms