Business & Economy Magazine IIPM News Edition: Despite the dilemma, which the industry is facing, aviation stocks seem to have suddenly caught the fancy of investors.

Wednesday, April 28, 2010

Despite the dilemma, which the industry is facing, aviation stocks seem to have suddenly caught the fancy of investors.

Ratan Lal Bhagat questions this big run-up in Indian skies...

“I invest my money in stocks which give me good returns, irrespective of the company or the sector. If the market is optimistic on the future of the aviation sector, then I won’t hesitate in investing in it, even if the sector has been in bad shape for quite some time now,” avers Lalit Ahuja, a former employee of Indiabulls Securities and now a businessman, who still has a hawk eye on the stock market.

Even Prakash Bhatt, an avid day trader, believes in somewhat same philosophy. “As the economic recovery gathers steam, I feel that the Indian aviation sector might bounce back in no time. In fact, I have made some really good money trading in stocks of domestic aviation companies during the last one month,” he tells 4Ps B&M.

No doubt, investors like Lalit and Prakash are well aware of the fact that investment in the share market is certainly a big gamble (What else would you call Sensex’s roller coaster ride from 21,000 points to 8,000 and then back to over 17,000?). They know it’s the right acumen with proper market study and projection that becomes imperative before one dishes out his hard earned pennies on any stock. But even then they are betting big on the Indian bourses, particularly, on the stocks of domestic airline companies, which are in a financial mess at the moment. And, it’s not just the two of them. In fact, there are thousands, or rather say millions of such Lalits and Prakashs who are busy reaping profits by investing their hard earned cash in the stocks of the domestic aviation companies.

And why not? In the last one month alone, the stock prices of almost all the domestic aviators including Vijay Mallya’s Kingfisher Airlines, Naresh Goyal’s Jet Airways, or even for that matter SpiceJet, the budget carrier financially backed by US-based billionaire Wilbur Ross, have all moved up a whopping 23-66% (Interestingly, the benchmark index Sensex merely rose by 4% during the same period). What’s more? The rally has been accompanied by an over 300% increase in trading volumes of each of these listed stocks. So what is it that makes the stocks of these domestic aviators a perfect catch?

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.