Indian LSE stocks drop on environmental concerns
The BP disaster in the Gulf of Mexico has had a knock-on effect
on share prices of India-focused oil and gas companies listed on
the London Stock Exchange (LSE), according to India Watch, a
quarterly review due to be released this month by the business and
financial adviser Grant Thornton.
"The spill-over from BP's exploration disaster
has set back our India Watch index, which was further exasperated
by other environmental concerns in connection with mining.
Investors are worried that India might introduce tougher regulatory
rules for oil exploration, deepwater drilling and mining," comments
Anuj Chande, Head of the South Asia Group at Grant Thornton UK
LLP.
Among the largest losers on India Watch were
Hardy Oil & Gas, the India-focused oil and gas exploration
company which saw its shares plummet 21% in Q2 2010 leading to a
total loss of 31% in the first half of this year.
Meanwhile Oilex, the Australian-based
AIM-listed oil and gas explorer which also operates in India, saw
its shares drop 22% in Q2 2010 and lost 45% in the
year-to-date.
The miner Vedanta Resources also saw its share
price fall almost 26% in Q2 2010, cancelling out first quarter
gains to record a loss of 19% in the first half of 2010. The drop
follows reports of environmental concerns about the miner's alumina
refinery in Lanjigarh in India's Orissa state, and its planned
Bauxite mine at the nearby Niyamgiri mountain.
The entire India Watch index dropped about
8.4% in Q2 2010 but gained 0.9% over the first six months of this
year. By comparison, the FTSE 100 dropped 14.4% in Q2 2010 and lost
9.2% in the first half of 2010. Both were outperformed in the
year-to-date by the AIM All-Share, which dropped by 6.0% in Q2 2010
but gained 1.2% in the first half of 2010.
"In spite of recent market jitters, India will
remain a favourite destination for investors. Since inception in
2007, our India Watch index has gained 59% and outperformed
London's main indices. India continues to provide terrific market
opportunities but it is essential for corporate investors to get a
clear picture of the regulatory framework in the country," Chande
concluded.
ENDS
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