Some mutual funds, including Star Sign Mutual Fund and market operators, are believed to be buying shares of sugar companies. The news that the government is planning to increase levy sugar prices by 30% for the current September-October season has spurred the buying, according to dealers.
The step will help sugar companies post better profits in this quarter. Balrampur Chini surged close to 10% to finish Rs 86.15, supported by heavy volumes. According to dealers, most of the purchases by mutual funds and operators are for the short-term and they could even offload their positions within a week.
IDFC prices QIP at Rs 168.25 a share
Infrastructure Development Finance Company(IDFC) is learnt to have priced its qualified institutional placement(QIP) at Rs 168.25 apiece. India’s leading infrastructure lender plans to mop up close to $575 million through the issue. It has roped in four bankers including Credit Suisse, Morgan Stanley, CLSA and IDFC-SSKI to manage the share sale. The stock closed at Rs 169.90 on Monday, up 0.95 % over the previous close.
(Contributed by Harish Rao & Reena Zachariah)
Look Beyond the Indices
Most market participants pay too much attention to the gyrations of the Sensex or the Nifty and unnecessary worry about their volatility. There are numerous stocks that have more convincing reasons to buy or sell and these may give you more returns in day then what the indices can give you in a month.
Not those individual investors buy the indices but it does distract them from individual stocks. It is difficult for analysts to change their mind sets quickly and by the time you get to see an affirmations of a move from them, its too late in the day.
Take R.Com for instance. The first fundamental recommendation by a large house has come after a 5 weeks and 53% surge. That does not mean the stock does not have more upside, but it only goes to affirm that investors have to carry their own cross.
A few weeks back, we had spoken about the sugar stocks, as to how they seem to have formed a bottom. Yesterday they have broken out of the range bound pattern and demonstrated enough strength to warrant a buy.
The reason we gave at that time was that the industry is expecting some sops from the Government. While the sops are yet to be announced, the surge in the international prices has lit a fire under the sugar pot.
Expect the Government to impose a duty on white sugar imports and to cut the levy sugar quota from the current 20% to something like 16%. Levy quota was last raised form 10% to 20%. More cane crushing expected this year will ensure a higher power output and the raw material prices could be low, giving some relief to the beleaguered sector.
The US markets were confused yesterday. It now dawned on them that if the G-20 is infact going to cut deficits, then where is the growth going to come from?
We will continue to have data from the US that is bearish and stock specific announcements like GTL Infra will continue to present opportunities. If the Saudi investors are going to put money in the stock at 20-25% premium to the then prevailing price, then what stop you from going for the kill now.
We will have to train ourselves in limiting our greed and taking those small profits that come our way or just watch the indices oscillate up and down, worrying a lot but doing nothing.
The choice is yours.
Disclosure : No holdings or trading positions in stocks mentioned or recommended to clients
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Standing at the threshold!
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Daily News Roundup - June 29 2010
GSFC
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Technical Report - June 29 2010
Technical Watch - June 29 2010
Daily Market Outlook - June 29 2010
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ANALYSIS: RCom - GTL deal
Src: ET and DP blog and Smartinvestor , HDFCSECetc
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