Your wealth of shares rises by Rs 3,51,769 crore

Investors have struck a goldmine in the last four months. Thanks to the bull run on Dalal Street, investors’ wealth — market capitalisation or total market value of all listed shares — has shot up by a whopping Rs 3,51,769 crore in this short period, making it one of the fastest rises in investors’ wealth since the 1991-92 bull run.

Market cap on the rise

MAY 2: Rs 549,996 cr SEPT 4: Rs 901,765 cr

This means the share portfolios of investors have zoomed by 64 per cent to Rs 9,01,765 (the total market capitalisation of all shares on the Bombay Stock Exchange) from Rs 5,49,996 crore on May 2, 2003. Most of the leading stocks have appreciated by 50-75 per cent during the period, bringing smiles back on the faces of lakhs of investors.

Who’s the biggest gainer from this bull run? The government has accounted for nearly one-third of the rise in market cap as government companies like ONGC, IOC, SAIL and HPCL showed a sharp rise in the last four months. “If this government sells its entire stake in public sector companies, it can raise over Rs 3,00,000 crore. This is enough to wipe out all deficits and finance new development programmes,” said a fund manager.

Government-owned ONGC has added maximum — the rise in market cap is only notional — to the government kitty. The oil giant’s market cap has almost doubled to Rs 92,628 crore by September 4. Others like SBI, SAIL and Indian Oil also increased their market caps significantly. (see chart)

The fancied Sensex has shot up by over 1,300 points during the four months. And it’s showing signs of further rise. “This is the best chance for investors to offload some of their shares and book the profit. Investors should sell when the prices have hit the roof,” says stock dealer R.A. Podar.

So far so good. This is only a temporary phase. Fund managers and brokers know that the bull run will not continue for ever. It will have to stop at one point of time. And when the fall comes it can be steep. The market cap can fall at the same speed.

The message for investors: sell when others buy and buy when others sell.