Retailer shares rally after decision over FDI

Retailer shares rally after decision over FDIOn Friday, shares in retailers jumped after the government moved to open up the supermarket sector to global giants, a move that prompted a flurry of investments and tie-up opportunities for local players.

On Thursday, the Indian government 51 percent foreign direct investment in multi-brand retail, paving the entry of international firms such as Wal-Mart, Tesco, and Carrefour into the $450 billion market.

From in.finance.yahoo.com:

“Accelerating the pace of investment in the supply chain to meet demands of increasing scale and enhancing efficiencies… besides expertise of foreign retailers.”

Shares in Pantaloon Retail (India) jumped as much as 18.2 percent, Shopper’s Stop rallied 11.4 percent, and Trent, part of the salt-to-steel Tata Group conglomerate, rose 17.2 percent.

In comparison, the BSE Sensex was down 0.7 percent at 9:35 a.m. (0405 GMT).

The government said late on Thursday that would also raise the cap on foreign investment in single-brand retailing to 100 percent from 51 percent.

“FDI in multi-brand retail would benefit capital-constrained retailers such as Pantaloon Retail,” Wall Street bank JPMorgan said in a research note on Friday.

Comments are closed.