It’s an old cliché that that there are two sides to a coin, but it holds true on most occasions when it is cited — like when referring to the post-26/11 fate of stocks.
The first side of the story is about the stocks that were hit hard by the terrorist attacks that engulfed India’s financial capital. The horrific Wednesday evening of 26th November, 2008 — and the couple of days following it — is one that we would like to forget, but it will forever be etched in our minds.
In respect to the victims of the attack, the Indian Stock Markets had remained closed on 27th November. And when they reopened on Friday, the share prices of companies in the hotel industry went on an expected downfall. India Hotels Company, which owns Taj Mahal Hotel fell by 17 per cent. On the other hand, East India Hotels, the owner of Oberoi Trident, actually rose by 4.9 per cent.
However, the case of East India Hotels was a one-off, as the hotel stocks kept going south in the week that followed 26/11. EIH has in fact been a gaining stock since the terror attacks.
The economic recession has been biting all sectors including hotels and tourism, but this state of fear of life looming over the rich has affected this sector all the more with reports coming in from different sections of the media about cancellations and postponements of trips. However, the second week of December saw the hotel stocks resisting further drops with many hotels dropping their rates in an attempt to survive. Thought he domino effect will take some time to wear off from this industry.
Now, coming on to the second side of this story — to the stocks that gained from the terrorist attacks. The companies that gained post-26/11 are ones that provide security or manufacture surveillance equipment.
Zicom and Bartronics are two such companies that have seen their stock prices rise after the attacks. Bartronics is one of the oldest companies in the solutions for bar coding. It is also into providing security related solutions. The share prices for this company soared by 30 per cent in about 15 days from the incident.
Another company which saw its share price soar since the tragedy is Zicom, its stock has gone up by around 45 per cent during the same period. Zicom deals specifically in products related to electronic surveillance systems for small, medium and large establishments.
For the record, we don’t mean to imply that these companies are happy that the attacks took place. We’re sure they condemn the attacks as much as we all do and would rather gain through peace and hard work, than through such a situation.
Well, let’s hope 2009 turns out to be better and safer year for not only the companies, but for us, the general public, as well.