Heard on the Street - ET

Heard on the Street

Engineers India rides high on bonus issue buzz
The stock of Engineers India has gained over 24% in the past week on the BSE. The scrip ended over 2% higher at close on Wednesday at Rs 1,428.25. Brokers say the stock is being driven by speculation that the company may announce a bonus issue of shares shortly. The other key trigger has been the announcement last week by the government that it planned to sell stakes in profit-making public sector undertakings.

Analysts point out that Engineers India was among the few companies unaffected by the slowdown in 2008. Even as the company’s earnings grew 61% in FY09, there was a steady increase in new orders. Engineers India is well-entrenched in high-end project consulting, which provides the company an edge when it comes to bidding for hydrocarbon, metal and infrastructure projects.

IPO issuers ready to eat humble pie
The dismal performance of some of the recent initial public offerings seems to be prompting some of the prospective issuers to be a bit more “generous” when it comes to pricing their issues. For instance, last month, a mid-sized Mumbai-based realty firm announced that it was looking to raise around
Rs 1,500 crore through an IPO. Market buzz is that the projected figure has been shrinking over the past couple of weeks. Last heard, the company will raise around Rs 1,100 crore.

BSE gets ready to launch its derivatives offering
The Bombay Stock Exchange, which is also Asia’s oldest stock exchange, is likely to launch a derivative product next month. Unlike the existing derivative products, which expire on the last Thursday of every month, the expiry of this derivative product will in the middle of the month. “The trade cycle will expire on the second Thursday of every month as against the current practice of expiry on the last Thursday of the month,” said an official privy to the development. He did not disclose further details about the product.

According to the official, the exchange has received market regulator Sebi’s approval for the product’s launch. The move is aimed at boosting the fortunes of BSE’s sagging derivatives segment, which has not been able to compete with rival NSE’s derivatives segment. Trading in BSE’s derivatives segment has been non-existent, while the daily total turnover on NSE is usually around Rs 70,000-80,000 crore. NSE’s dominance in the equity derivatives segment has been a cause of concern for the market regulators.

Contributed by Deeptha Rajkumar, Santosh Nair and Reena Zachariah

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Src:Economictimes.Indiatimes.com, Moneycontrol.com