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ICICI Bank drives Indian shares to record high



By Devidutta Tripathy
07 January 2008 @ 7:07 pm IST

Mumbai - India's main share index shrugged off weak global markets on Monday to post its third record high of the new year, riding a gain of more than six percent in ICICI Bank on market talk of a proposed share sale in one of its units.


A road sign stands next to the Bombay Stock Exchange building (R)
A road sign stands next to the Bombay Stock Exchange building (R), August 3, 2005. (Photo: Reuters)
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Analysts and traders said ICICI, the country's most valuable bank which accounts for more than 10 percent of the benchmark index, was planning an initial public offer for its investment banking and broking unit, ICICI Securities.

The bank held a meeting for select group of investors on Monday, and traders said that was the source of the talk, which helped the stock recover form an early fall of 3.9 percent to end up 6.1 percent at a record close of Rs.1,363.90.

"There is a belief in some circles that if the subsidiaries are valued separately, the sum-of-the-parts business that is the listed entity ICICI Bank would have a far higher valuation than what the market currently reflects," said Arun Kejriwal, director at KRIS.

"It is with this intention that they had called the select investors' meet," he said.

A spokesman for ICICI Bank said it was exploring various opportunities for its subsidiaries and that an announcement would be made if there was any decision.

The benchmark BSE 30-share index ended 0.61 percent, or 125.76 points, up at 20,812.65, its highest ever close.

However, 18 components ended down.

The index hit a record high of 20,861.83 during trade as the ICICI talk helped it recover from early losses of 1.2 percent after it was caught in a sell-off in global markets after weak U.S. employment data heightened fears of a U.S. recession.

Sentiment has been underpinned by expectations that companies will report good December quarter earnings from later this week, as well as bullishness on India's biggest ever IPO.

This article is copyrighted by Reuters.

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