Movement in BSE Metals vis-à-vis BSE-500 (Q4 FY09)
The movement of metals have shown upward trend in Q4 FY09. The metal stock has shown signs of recovery with steady rise in the stock price on anticipation of global economic recovery. Indian metals majors have shown a positive trend over past few months. Greater consumption from the infrastructure sector and renewed demand from power sector has rejuvenated metal stocks, which moved with a sluggish note on the bourses a few months back. With global scenario improving especially due to increased demand form China, has led the metal stock recover from their gloomy days. Uptrend would continue to prevail on the bourses as the demand from large consumers like China and India would keep the surging over times. However, countries are still far from the full recovery status.
Metals in Q4 FY 09Financial Review of BSE Metal scrips for Q4 FY09
Out of 15 companies under BSE Metal index, only 5 companies have declared result of Q4 FY09 till May 21, 2009
The Indian metal sector staged a smart recovery in the three months to March-end on account of a revival in demand from the automobile, rural infrastructure and housing sectors, at a time when the world’s major steel-producing countries are facing a steep fall in output. Steel production and consumption grew at 1.2% and 3.8%, respectively, in the January-March quarter over the same period last year, after turning in dismal figures in the previous quarter when production and consumption slipped 7.8% and 13.6%, respectively.
Expansion Plans in Metal Sector
Metal on Bourses
The BSE Metal Index has given a positive return of 11.14% in Q4 FY09 outperforming the BSE-500 which gave a negative return of 2.04%. The index witnessed fluctuations of 41.06% between its highest & lowest levels. It touched its highest level 6,216.01 on 7th January while it was the lowest on 23rd January at 4,406.66 whereby BSE-500 moved 31.21% between the highest and the lowest prices.
In the month of January, both BSE-500 and BSE Metal gave negative returns to the tune of 2.19% and 4.73% respectively.
The same happened with the month of February as BSE Metal gave a negative return of 8.02% and BSE-500 showed a return of -5.68%.
During March, BSE Metal outperformed BSE 500 giving 23.54% & 9.02% returns respectively.
Performance of Metal index on BSE in Q4 FY09
Indian steel producers are spreading their footprint all over the globe. India has emerged as the third largest steel producer in the world, leaving behind Russia and the US, in the January-March of 2009. As per the World Steel Association for the January-March period of 2009, India reported 1.02% increase in output at 13.17 million tonnes for three months ended against the year-ago period. This shows there is demand for steel in the economy.
China and Japan maintained their supremacy in terms of steel output to hold the first and the second slot respectively for the January-March period. China recorded a steel production of about 126 million tonnes, while Japan had 17.60 million tonnes in the three months. On the contrary, Russia and the US saw their production plunging by 33% and 53% to 12.88 million tonnes and 12.09 million tonnes, respectively, in the period.
While the demand for steel will continue to grow in traditional sectors such as infrastructure, construction, housing automotive, steel tubes and pipes, consumer durables, packaging, and ground transportation, specialised steel will be increasingly used in hi-tech engineering industries such as power generation, petrochemicals, fertilizers, etc. The new airports and railway metro projects will require a large amount of stainless steel.
Tuesday, June 2, 2009
Sector Analysis : Metals
Posted by Morgan at 8:20 AM