With the new government fuelling hopes of an economic recovery, stocks of realty, infrastructure and power companies within the BSE 500 universe have seen the highest average daily volumes over the last one-month period.
Real estate developer Unitech tops the list as the counter has seen daily average volumes of 9.2 crore shares over the last one month, which is 69% higher than daily average volumes seen on the counter in CY14. Within the infrastructure space, GMR Infrastructure’s one-month average daily volumes are 78.63% higher than the average volumes seen in CY14.
Suzlon Energy has seen 3.2 crore shares exchange hands on an average in the last one month, which is 93% higher than its average volumes seen in CY14.
Experts believe that a possible revival in the capex cycle in the coming months is fuelling trading activity. “Any sector related to capex cycle revival is evincing interest. That is why we are seeing such high volumes in high-beta sectors such as power, infrastructure and realty,” said Gaurav Mehta, vice-president, institutional equities at Ambit Capital.
CNX Energy has gained more than 15% in the last one month against gains of more than 23% in YTD.
CNX Realty has gained more than 29% in the last one-month period with Unitech (66.1%) leading the gains.CNX Infrastructure has gained more than 19% in the one-month period against gains of 27.60% in CY14.
Brokerages expect the realty sector to see an improvement in realisations. “A stable government at the Centre and an improving economic sentiment drive up our FY15E and FY16E realisation 7% and 13%, respectively, for companies under our coverage. Our optimism on the sector stems from expected recovery in volumes and prices and the strengthened position of developers to ride the recovery in the economy,” said Edelweiss.
Market observers believe that infrastructure will be the first sector to recover. “On a three-year view, we see infrastructure as a relatively early-cycle end-market. If the new government decides to speed up infrastructure projects, it can do so, as there are several projects that have been awaiting ordering, even after completion of land acquisition, largely due to procedural and tendering issues. We see potential for $25 billion in large infrastructure projects to be ordered out over the next 12-18 months, based on old order pipelines,” Barclays said in a recent report.