Software scrips surge on bourses

MUMBAI, JULY 8: Software scrips continued to surge ahead on the stock exchanges. The rise in prices which started a couple of months ago has...

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MUMBAI, JULY 8: Software scrips continued to surge ahead on the stock exchanges. The rise in prices which started a couple of months ago has intensified with the government planning a host of incentives for the sector. With speculators taking advantage of the situation, trading volumes have also shot up.

Pentafour Software scrip shot up from Rs 618.25 to Rs 667.50, NIIT from Rs 1498.75 to Rs 1549.75, PSI Data System from Rs 118.60 to Rs 128. Infosys Technologies has zoomed by almost Rs 400 in the past three sessions to touch Rs 2525 on the National Stock Exchange (NSE) and Rs 2510 on the Bombay Stock Exchange (BSE).

It is again inching towards its 52-week (bonus adjusted) high of Rs 2625. Infosys’ scrip rise was also supported with huge trading volumes on July 7 which suddenly shot up by 172 per cent and 74 per cent to touch 1.6 lakh and 1.4 lakh shares on BSE and NSE respectively. On July 8, Infosys shot up by Rs 112 (4.6 per cent) from Rs 2495.75 to Rs 2510.75 and volumes rose further to 1.83 lakh onthe NSE and 1.37 lakh shares on BSE.

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Satyam’s scrip rose by Rs 25 from Rs 416.75 to Rs 445.25, but trading volumes almost doubled to over 42 lakh shares agianst 22.8 lakhs shares traded on July 7 on the NSE.

On BSE, more than 26 lakh shares were traded aggregating Rs 119.34 crore. The rupee fall from Rs 33.8 in April 1997 to the current level of Rs 42.5 has aided the surge in earnings for these software companise as more than 95 per cent of the income is in the form of foreign exchange.

Further, various path-breaking recommendations by the national task force on information technology and software development also fuelled the rally in the software stocks.

The proposals include introduction of sweet equity to IT employees, blanket approval for Indian It companies to acquire foreign companies and zero duty on all IT products by 2002. It also suggested a 100 per cent depreciation on all IT products in two years.

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With excessive speculation rampant in many software scrips, the Bombay Stock Exchange hasimposed five per cent additional purchase margin on several scrips.

Meanwhile, the software industry has crossed the Rs 10,000 crore mark during the last financial year, with exports contributing more than 65 per cent. The industry registered an overall growth of 58 per cent during the year.