With four days to go for "muhurat trading" (October 30), investors are being flooded by analysts on stocks that they should buy this year (Samvat 2073) to maximise their returns. The current fiscal has been fairly bullish for stock market investors, especially those who put in money in initial public offerings (IPOs).
With bond yields on the decline, there is an expectation that retail investors would gravitate towards stocks from fixed income instruments. This also has contributed to higher interest among investors to look for stocks that would deliver good returns over a 12-month horizon.
Low bond yields no longer an attraction
The yield on 6.97 percent govt bond due September 2026 stood at 6.76 percent on Monday (October 24), while the 8.27 percent 2020 bond yield dropped to 6.60 percent, according to a note by Geojit BNP Paribas.
Angel Broking said that G-sec bond yields have fallen to multi-year low after the recent repo rate cut by RBI. "With the recent interest rate cut, India's 10 year G-sec bond yields (6.72 percent) have fallen to 12-year low, (keeping aside, the few months of low yields just after Lehman Brothers crisis)," it said in its note.
Some of the listings have given reasonable returns to investors, except those like ICICI Prudential Life Insurance that listed at a discount to its issue price of Rs 334. Stocks that did well on debut and held on to gains include Endurance Technologies, Quess Corp, RBL Bank and GNA Axles, to name a few. The IPO deluge continues, with two issues — PNB Housing Finance and Varun Beverages — currently on.
Sovereign Gold Bond Scheme
Another investment option for retail investors is the sixth tranche of sovereign gold bond scheme, which opened on October 24, ends on November 2, 2016. The issue price per bond of 1 gm of gold is Rs 2,957 and the interest rate is 2.50 percent per annum, down from 2.75 percent earlier. The earlier five tranches saw investors applying for 10,155 kg of gold.
Here are some of the top picks by brokerages Angel Broking, DynamicLevels and Geojit BNP Paribas.
|Scrip||CMP (Rs)*||Target Price (Rs)||Remarks|
|Axis Bank||487||630||Angel Broking|
|Axis Bank||487||650||Geojit BNP Paribas|
|HCL Tech||792||1,000||Angel Broking|
|Ashok Leyland||87||116||Geojit BNP Paribas|
|Equitas Holdings||176||235||Angel Broking|
|Hero Motocorp||3,408||3,960||Geojit BNP Paribas|
|KEC International||127||157||Geojit BNP Paribas|
|Dewan Housing||316||350||Angel Broking|
|Larsen & Toubro||1,504**||1,636||Kotak Securities|
|Mahindra & Mahindra||1,327**||1,541||Kotak Securities|
|Allcargo Logistics||181**||215||Kotak Securities|
|Dish TV India||95**||110||Kotak Securities|
*Current market price at around 2.45 pm on Wednesday (October 26).
**Share price as of October 20.
It is important to mention here that the recommendations were made on Tuesday (October 25) by Geojit BNP Paribas and on Monday (October 24) by Angel Broking. Therefore, the current market price (CMP) as reckoned by them is different from the CMP shown in the above chart.