Oil and Natural Gas Company (ONGC), India's 74.1% state-owned oil giant is expected to stick to its plan to raise about $ 2.7bn through a 5% share sale by mid-March. The recent 13% slide in the SENSEX has not deterred the company from its privatisation plans, according to Indian press reports. The Government, as part of its plan to cut the large fiscal deficit, plans over the next few years to sell stakes in about 60 state- run companies.

Eoin Treacy's view The Chinese large cap Shanghai A-Share Index bottomed in late 2008 and remains in an extended base formation It has laboured under increased supply from the unlocking of non-tradable shares and the various capital raising measures pursued by the financial sector. The slowdown in its major export markets as well as rising domestic inflationary pressures have been an additional impediment to the performance of its dominant stock market sectors.

The Indian stock market performed spectacularly well following the 2008 crash and regained the pre-crisis highs by last October. The subsequent sharp pullback has been driven at least in part by the deterioration in sentiment regarding the government's ability to manage nascent inflationary pressures. A number of government scandals have also damaged investor confidence.

Privatisation is a prickly issue in India so it is not at all certain just how much of its extensive holdings the government will actually dispose of. However, it is to be hoped that this process is managed with the interests of achieving the best possible sale prices for these assets. Investors have long advocated privatisation of a number of Indian sectors and would likely welcome any significant move in this regard. However, an extensive program would also act as a headwind for the stock market as the additional supply would take time for investors to digest. (Also see David's comments on India and China yesterday).