Jun 13, 2007 07:34 PM
3237 Views
The Market index remained buoyant in the month of may with 500 points upward movement and sustaining there.It is a very healthy boom where the stocks prices and movements are strongly coordinate related with the corporate earning growth.There are enough takers for the winners.
The rael estate industry is coming of age with an ipo of DLF.It is a very large and successful company in the real estate sector.They have an excellent track record of creating high quality real estate in various segments.At the IPO price, the company is valued at almost Rs.! lac cr.The argument tp justify this is to have a gleam of faith in sustenance of current real estate prices and in the backdrop of masive supply in the next 5-6 years.
The IPO clearly spells two things:one its a very large sector which had clearly emerged permanantly into investing arena and the second one is that many a stars will shine in the years to come.Going by the valuation of DLF, I would rather try to look around for smaller nuggets but at much reasonable prices.The margin of safety at current prices more particularly the sector beset with issues related to accounting and pricing has led to PE multiple issues.
The wise people around the globe have an apprehension of an emergence of global bubble in the stock markets. My sense is that they are probably right, but as you know, Indian markets are still at PE of 18 and in my opinion far from a confirmed bubble.Therefore, we can look forward to a positive return environment for more time to come.
Happy Investing!
