Bullion and realty got a sparkle this Samvat 2067 (November 5, 2010 to October 25, 2011) even as the stock market took a beating.
Bullion and realty got a sparkle this Samvat 2067 (November 5, 2010 to October 25, 2011) even as the stock market took a beating. Bullion registered a spectacular growth despite the volatility in the segment. Prices of gold and silver were up by 36% and 40% respectively. When compared with fixed deposits, bullion and realty turned out to be a far more profitable investment. The two even outperformed equities in Samvat 2067.
But experts fear a bearish trend in almost all these investment avenues for Samvat 2068. When Samvat 2067 began on November 5, 2010, the Sensex touched an all time high of 21,004.96 points and Nifty was at 6312.54. Since then, both the indices have seen several free falls. Sensex and Nifty both are down by more than 17%.
As for real estate, the sector has seen a hike of around 20% despite rise in jantri rates, frequent increase in lending rates and other factors. In Satellite, which is one of the posh areas of Ahmedabad, the residential space has seen a hike of 21% in price at around Rs4,600 per square feet in Samvat 2067. The rate before that was Rs3,800 per square feet. But many believe that realty has reached its saturation level.
In bullion, silver touched a peak of Rs75,000 per kg this year while for gold it was Rs28,600 per 10 gram. Over all, silver has given higher returns than gold in Samvat 2067. "But in Samvat 2068, gold is expected to outperform silver. It is said that gold loves bad news and in the coming days we are expecting more bad news from the US and Europe," said city-based bullion trader and analyst Girish Choksi.
He said that in the domestic market a bullish trend is expected in bullion and both the precious metal are expected to rise by more than 25% in Samvat 2068. Choksi even predicted that gold is likely to see the Rs30,000 to Rs35,000 per 10 gram levels in the next year.
But experts also fear that trepidation about a slowdown, global recession coupled with rising inflation and other factors may impact bullish investment avenues. "In Samvat 2068, markets are expected to remain in the broader range. I am expecting Sensex to trade between 13,500 and 18,500 while Nifty is likely to remain between 4,000 and 5,600," said MD & CEO of Dhanvarsha Fincap Pvt Ltd, Nilesh Kotak.
According to Kotak, Sensex and Nifty gave negative returns in Samvat 2067. "The markets initially started with a positive outlook but then slowly went down. Finally both the benchmark lost around 21% from its peak. However, in Samvat 2068, overall trend of the market till June 2012 will be negative," he said.
Realty, despite being expensive has always remained a favoured investment avenue.
NK Patel, director of Real Estate Studies and Management Academy (Reshma), said, "This year the sector gave a 20% return to investors despite the market being stable for the last few months," said Patel. He said another benefit of realty is that it can generate income by way of rents. "However, the next year is likely to be tough for this sector due to inflated property prices, escalating home loan interest rates, weak global economy and over supply in the market, he said.
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