Recommendations for the
forthcoming week using technical analysis
HDFC Sec, www.valuenotes.com
6 July 2010
Heard on the Street: Delisting buzz drives up KSB Pumps, MphasiSDelisting buzz drives up KSB Pumps, MphasiS In the absence of any other exciting “story”, delisting remains one of the favourite themes in the stock market. Shares of KSB Pumps, which makes power-driven pumps and industrial valves, extended their winning streak on Tuesday, climbing 3.5% to close at Rs 561.40.
The stock has gained around 14% in the past couple of weeks on talk that the foreign parent may buy out the minority shareholders shortly. An e-mail sent to the company remained unanswered till the time of going to print. Promoters own 66.8% of the company’s equity, with Canada-based Kay Pump holding a 40.54% stake.
An analyst said the company’s margins for the current calendar year could be under pressure, as it had quoted low price for some key projects it had bid for. The margins are expected to improve next year, once new orders at higher prices start flowing in. Shares of IT services firm MphasiS, too, have been inching up of late on rumours of a possible delisting.
The stock closed flat at Rs 605.15 on Tuesday, but have risen nearly 10% over the last week. The stock had touched a record high of Rs 796 in November last year on similar talk. Analysts say it would be risky to take event-based bets on stocks where there is little fundamental support. In the case of MphasiS, analysts say that the stock is fairly valued at current levels. Also, the outlook on the IT services sector in general has turned cautious, following renewed doubts on the health of the global economy.
eClerx Services snaps 3-day winning streak Shares of Mumbai-based KPO Eclerx Services snapped a three-day winning streak on Tuesday, shedding 2.3% to close at Rs 664.85. The stock has risen around 10% in the past couple of weeks, on thin volumes. Dealers tracking the counter say domestic mutual funds and a leading bank-promoted PMS player have been buying the stock over the past few sessions.
The buzz is that some fund managers had met up with the management to get an idea about the company’s plans. Sensing an opportunity, some local operators, too, seem to have thrown their hats into the ring. On Monday, when the overall trading volume in the market was down around 40%, the eClerx counter logged a volume of 4.39 lakh shares on the NSE alone, compared to the two-week average daily volume of 16,000 shares. Barely a tenth of those massive volumes resulted in delivery, testifying to the speculative interest in the stock.
PK Malhotra likely to join SAT One of the long-pending vacancies at the Securities Appellate Tribunal (SAT) is likely to be filled this month. The buzz is that PK Malhotra, additional secretary, ministry of law & justice, has been selected and will join Samar Ray, member and Justice NK Sodhi, presiding officer at SAT. Sebi had proposed to the government that the retirement age for members of the tribunal should be increased to 65 years from 62 to avoid frequent reconstitution.
Last year, there was a backlog of cases at SAT because of the absence of quorum. The situation eased after the appointment of former deputy Comptroller and Auditor General (CAG) of India, Samar Ray.
(Contributed by Deeptha Rajkumar, Apurv Gupta & Reena Zachariah) ****************************************
Src: HDFCSEC, ET and DP blog and Valuenotes and etc
