Boston, MA 05/19/2014 (wallstreetpr) – HDFC Bank Limited (ADR) (NYSE:HDB) shined radiantly on Friday, recording a surge of more than 6%, driven higher amid a broader rally in the Indian stocks.
Election Results
On Friday, the Indian ADRs traded higher, reflecting the optimism in the country with the clear win of Bharjitya Janata Party’s Prime Ministerial Candidate Narendr aModi in the Lok Sabha elections. Throughout last week, India’s benchmark index, Sensex as well as Indian ADRs had rallied enormously ahead of the final day of the vote counting. While analysts had noted that the BJP’s win could further spike a rally in the market by 8-10%, they feared that the opposite will be true in case if the vote count does not fall in favor of BJP. However, Friday start cleared all doubts leading to a clear win for BJP alliance National Democratic Alliance. It is to be noted that it is the first time since 1984 when a party has come to power with a clear majority, as until now it was being run on coalition based government.
Modi’s Landside Win
The landslide victory of Mody further strengthens the hopes that the pro-business leader will steer the economy towards growth through business investment, employment and cutting out red tape. Experts anticipate Modi, who served as Chief Minister for Gujarat for over 12 years, as one to take big leaps through distancing from red tape. The change in government was much needed as the country was seeing a decelerated growth of 5% since the 2008 financial crisis. In fact, the country’s bureaucracy scored worst with 9.21 out of 10 score as per a report released by Hong-Kong based Political and Economic Risk consultancy. The UPA government under the leadership of PM Manmohan Singh failed to record any prominent reform during its reign in the last ten years.
HDFC Bank Limited (ADR) (NYSE:HDB)’s ADR has so far recorded a gain of 15% in the month of May, where a major rally was induced by the election results.
