Sensex will rise to 12,000 points in two years says Anand Rathi

Hyderabad: The Sensex will touch the magic figure of 10,500 points by December 2006 and rise to 12,000 points over the next two years, says maverick market player Anand Rathi, chairman of the Anand Rathi group who styles himself more as a 'Wealth Manager.'

The sectors on which Rathi is bullish include infrastructure, construction, FMCG, cement, banking and auto-ancillaries. "We are not into pharmaceuticals and commodities because both these sectors are still evolving out of the WTO impact and face competitive pressures on pricing," he said.

"In the last five years India has become the preferred investors destination of the world," says Rathi, and adds that robust growth indicators will drive the market index to move further up and touch the magic figure of 10,500 points on the Sensex by December 2006.

Rathi was in Hyderabad to inaugurate the 175th branch of his company the Anand Rathi Securities in the country and the first in Andhra Pradesh at Hyderabad today.

Rathi said, "In my last 40 years of involvement with the capital market, never have I ever seen such growth drive. Speaking about the huge returns provided by the equity markets, he said the equity market has provided an annualised 17 per cent growth in the last 25 years and is projected to provide a minimum of 15 per cent growth in the next five years. "The investments in the mutual funds sector will grow by 30 per cent in the next five years," he said.

Rathi said the service sector growth would be double that of the agriculture and manufacturing sectors. "Service sector will contribute 75 of the GDP in the next 20 years and the share of agriculture and manufacturing will go down," he said.

He said the main factors driving growth in the country were (a) increasing percentage of an population from 45 to 50 per cent, which is also equipped with better skills (b) low bank interest rates leading to increased consumption patterns and (c) and an annualised 20 per cent growth in exports. Topping that is the favorable global pricing valuation of India, "he added.

"India has a demographic advantage over Asian and European countries leading to the Indian industry being more competitive, he said.

He said the GDP was poised to touch nine percent growth rate and the index to touch the 20 percent mark in the next five years.

The Anand Rathi Group began operations in 1994 and now has an annual turnover of Rs4000 crore, employing 9000 brokers serving nearly 75,000 investors. With the opening of the Hyderabad branch the company has a presence in all the state capitals.

"We plan to invest around Rs25 crore in expansion to 300 branches by December 2006 " Rathi said.