Software stocks ride high

By : |May 10, 1999 0

Pentafour, Satyam offer 1:1 bonus
This recent development in the stock options of two top Indian IT companies narrates
something more than the success story of these companies. It clearly outlines the fact
that despite widespread political uncertainty in the country, the growth of IT industry is
unaffected, almost.

The government falls, and so does the market
With the fall of the BJP government the investor fancy for infotech stocks also seemed to
have taken a pause. As a country’s political and economic situation are directly
proportional, this did not come as a surprise.

A different tale
But this time it was a different story. Trends of software scrips drove home a point that
though the political situation of the country is highly unstable, the infotech industry,
especially software sector, can continue growing.

Trends on the stock market over the past couple of trading
sessions suggest the slow pace visible immediately after the fall of the government, was
nothing but a knee-jerk reaction from some weak-hearted investors. For more than past
three trading sessions, infotech stocks have witnessed good buying response.

Good response for IT stocks
More interesting is the fact that the good response has come from well-heeled investors.
Pentafour, DSQ Software, and Satyam Computers have attracted fresh investments at
relatively low prices. Most of these investors-FIIs and funds-strongly believe that the
growth in infotech stock prices is far from fully tapped. And therefore, the potential the
sector holds as far as investments are concerned.

Infotech companies’ stock prices are rising, defying the
belief that unstable politics means unstable economic growth-Pentafour and Satyam are now
available in a price range of Rs 1100 to 1400 with an additional attraction of 1:1 bonus.

Final word: Infotech can grow during a political
crisis

The infotech sector has become a hot favorite for two reasons-it has offered
maximum returns on the market over the past year, and in the state of uncertainty this
sector still holds the promise of profits. But more important than all this is the fact
that stock situation has brought to light. That is, the IT sector is strong enough to
continue its growth in midst of political and economic odds.

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