The Chill of Politics

In a previous article, we had discussed the impact of politics on rail stocks.

Politics plays a key role in deciding the fates of companies and sectors.As such, it can lead to plenty of warning signals for seasoned investors.

Take for instance, Jayalalithaa’s massive win in 2011 Tamil Nadu Assembly elections.

Since then (14th May, 2011) to now, shares of Sun TV (considered close to DMK) have tanked by a third.

A Raja was arrested on 2nd Feb, 2011.Since then, perceived losers such as RCom (-30%), GTL Infra (-75%) etc had to suffer devastating losses in their market capitalizations.

In 2012, assembly elections in Gujarat are scheduled towards the end of the year.Narendra Modi is widely expected to win but if he doesn’t you can be sure some corporate entities will be affected.

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