Dec. 14 (Bloomberg) -- Shoppers Stop Ltd., India’s second- largest retailer, snapped five days of losses in Mumbai trading after Prime Minister Manmohan Singh said his government plans to overcome opposition to allowing foreign ownership in retail.
Shoppers Stop rose 1 percent to 310.60 rupees at the close in Mumbai. The benchmark Sensitive Index fell 0.8 percent.
India on Dec. 7 suspended a decision to allow overseas ownership of multibrand retail stores after protests by opposition political parties and some allies of the ruling coalition paralyzed parliament. Singh said today his government “will do everything” to encourage foreign investments and overcome opposition to overseas ownership in retail.
“We have to convince our allies. I feel we will succeed, though not in the next two months,” Singh said in an interview in New Delhi. “The state elections should be over by March and things should change.”
Singh’s ruling Congress party faces at least five regional elections next year, including one in India’s most populous state Uttar Pradesh.
India’s suspension of its decision last month to allow overseas retailers including Wal-Mart Stores Inc. and Carrefour SA to own up to 51 percent of stores selling more than one brand delays plans of overseas companies to expand in the nation’s $400 billion retail market and build supply systems.
Policy makers have debated foreign investment in retail for at least seven years in the face of concerns that owners of so called mom-and-pop stores will lose their livelihood.
“The government has been going back and forth on this, so it’s tough to say how much it will deliver, and March is quite a while away,” said Abhishek Ranganathan, an analyst at MF Global Sify Securities India Pvt. in Mumbai. “The government seems to suggest that they are having more problems with their allies than with the opposition, when it comes to this.”
Pantaloon Retail India Ltd., the nation’s biggest retailer, pared its losses to end 9.8 percent lower at 142.10 rupees.
-- Editors: Subramaniam Sharma, Suresh Seshadri
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