Heard on the Street

Heard on the Street

Blame it on BoR merger, ICICI Bank sheds 3% Shares of ICICI Bank shed 3% to Rs 842.20 on Monday, leading the decline in banking stocks. According to dealers, a foreign institutional investor, which bought a sizeable chunk in the bank in the past month or so, was a seller on the stock. ICICI Bank has been in news recently after its decision to merge Bank of Rajasthan with itself, a move that was not appreciated by many in the market. Investors fear the move could hurt the bank’s asset quality. PSU insurer buys Essar Oil on price deregulation hopes A large PSU insurance major is believed to have been mopping up shares of Mumbai-based Essar Oil in the past few sessions. Brokers said that the insurance firm was a big buyer in the stock on Monday, though the stock closed 1% lower at Rs 127. According to dealers, market participants were anticipating some positive development on deregulation of fuel price. This could have helped the company in getting some relief in expanding their fuel retailing. The company has recently announced its plans to raise up to $300 million by issue of FCCBs in one or more tranches, on preferential offer basis to promoter company, Essar Energy Holdings to part finance its scaling up of Jamnagar refinery capacity by 25% to 3,75,000 barrels and increasing its complexity. Fairfield gains 14% on delisting hopes Shares of Fairfield Atlas rose 13.9% to Rs 55 on Monday on speculation the recent government rules on minimum public shareholding requirement would prompt the company to consider delisting. Promoters hold 83.91% in the company. Reliance Capital Trustee is one of the key FIs in the company with a 8.46% stake. The buzz is that Fairfield’s promoters are not in favour of diluting their stake in the company for meeting the new rules, while Reliance Capital is unwilling to sell its stake in an open offer, if any. Grapevine has it that Reliance Capital is not ready to tender shares around this level, as its average purchase price of this stock has been ‘much higher’. In 2007, TH Licensing Inc, the company’s promoters, had made an open offer to buy all of public shareholding at Rs 81 per share, but was not successful as Reliance Capital did not participate in the open offer. Contributed by Harish Rao, Apurv Gupta & Nishanth Vasudevan

If market goes below 4950, its a confirmed downtrend: Deepak Mohoni

Mid-term picks of the day

Top 5 picks | Mid-term picks

Sensex takes a knock on global hangover

Wall Street tumbles, S&P's lowest close in 7 months

New 'public float' norms spark MNC delisting fear

BGR Energy Systems

Mphasis

KPIT Cummins

Cox and Kings

GSPL

Rajesh Exports

Tulip Telecom

TV18 Ltd

Onmobile Global

BHEL

Stocks with Public Holding less than 25%

Oil and Gas Sector

Dishman Pharma

Tech view: Global cues hold more weight

TRADING DESK

Next few sessions could be choppy


Src: ET and DP blog and Smartinvestor.in

Heard on the street

Heard on the street

Speculation over Welspun Gujarat-MSK Projects buy

TALK of Welspun Gujarat Stahl Rohren looking to buy MSK Projects refuses to die despite the latter denying it. Grapevine has it that discussion between Welspun and MSK for the deal is in the final stage and will be announced soon. It is also speculated that MSK promoters are likely to offload their stake at Rs 140 a piece, followed by an open offer to buy another 20% from minority shareholders.

On Thursday, MSK shares fell 3% to Rs 120.65. Welspun shares fell 1% to Rs 279.50. Promoters hold 21.68% in MSK, while Subhkam Venture holds 23.66%, as on September 30. MSK officials were not available to comment on the matter.

Mid-cap cement stocks back in demand

INVESTORS took a fancy to midcap cement stocks on Thursday on talk that cement prices were likely to firm up soon. Stocks like Binani Cement, Andhra Cement, Saurashtra Cement, Dalmia Cement, Shree Cement and Prism Cement were among the prominent gainers, rising between 3-6 %.

Analysts tracking the sector say fund houses have been steadily buying cement shares in anticipation of further growth in the construction sector. According to them, many cement companies are set to increase prices further, sensing good demand in the residential property segment. Indian cement industry is witnessing a growth rate of about 8%, the fastest growing market next to China.

Satyam Computer basks in IT glory

SHARES of Satyam Computer are seeing a renewed burst of activity. Probably, strong quarterly numbers from Infosys Technologies could have raised expectations from other leading IT services companies as well. On Thursday, a US-based investor is said to have bought close to 30 lakh shares. Some of the bull operators too are said to be steadily building up long positions at the counter.

Dealers tracking the counter say the rise in the stock price from hereon may be a bit gradual, since many players who are tired of holding on to the stock may decide to cash in. The stock had touched a high of Rs 128 in September last year, but has been moving in a narrow band ever since. On Thursday, the stock closed at Rs 120.85, up 1.2% from the previous close. On the BSE, 1.23 crore shares changed hands, with roughly a fourth of it resulting in delivery.


Contributed by Nishanth Vasudevan & Apurv Gupta

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Top 5 picks

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Src: ET

Heard on the street

Heard on the street 14 Jan 2010, 0356 hrs IST, ET Bureau

Save Print EMail Share Comment Text:

Scooters India seen riding the divestment wave A group of punters appear to have taken control of the Scooters India stock. Shares of the loss-making public sector undertaking (PSU) hit a 52-week high of Rs 45.45, amid a sudden surge in volumes, and ended the day at Rs 44, up 14% over the previous close. Around 13.6 lakh shares changed hands on Wednesday, compared to an average daily volume of around 8,000 shares on most trading sessions in the past three months. The stock has risen nearly 60% this month alone. Cornering the stock does not need too much capital, considering that the non-promoter holding in the company is barely 20 lakh shares. With divestment being the flavour of the season, PSU shares are suddenly in demand. It is not too difficult for an operator to whip up volumes in an illiquid stock and then unload the shares to the unsuspecting public by spreading the divestment story. There were more than a dozen bulk deals in the stock on Wednesday, with all of them being squared off before close of trading. The sudden interest in the stock by arbitrageurs does raise eyebrows, considering the illiquid nature of the stock. Of the 13 players who took up positions at the counter, 8 squared off their positions for a small loss, two barely managed to break even, and four made a small profit. Scooters India made a net loss of Rs 2.27 crore for FY09, and a net loss of Rs 1.2 crore for the half year ended September 2009. Alarm bells ringing for second-rung stocks IS THE rally in second-line stocks close to peaking out? Yes, say some dealers, pointing out to the fact that money-making is becoming a bit too easy. “We get at least half-a-dozen tips daily with likely price targets over the next few days,” says a dealer at an institutional brokerage. “But, of late, the target prices are being attained before the specified period. That is too fast for comfort,” he says. NTPC follow-on offer may open on Feb 3 THE FOLLOW-ON public offering of NTPC is likely to start from February 3-5, according to people involved with the process. The company along with government officials and bankers has started meeting domestic institutional investors including insurance companies and mutual funds to gauge investor appetite for the Rs-11,000 crore share sale. The company filed its offer document with Sebi on Tuesday and is likely to be flexible in the new auction process by not placing any cap either in terms of the number of shares or percentage to issued capital. Investment bankers say that the success of the NTPC issue will play a crucial role in the government’s future disinvestment plan. Contributed by Santosh Nair & Reena Zachariah Src:ET

Heard on the Street

Heard on the Street


Investors lap up shares of PSUs ahead of FPOs
Savvy traders are said to be accumulating shares of public sector undertakings such as NTPC, Rural Electrification Corporation (REC) and National Mining Development Corporation (NMDC), which have lined up follow-on public offerings (FPOs). Officials at investment banks say the companies will be going in for the auction method, as the government is looking to maximise its collection from the sale of shares.

Punters are betting that institutional investors will bid at a decent premium to market price if they hope to be allotted the quantity they have bid for. The highest bid could then set the benchmark for the stock price, punters feel. REC shares rose 5% to close at Rs 252.50, NMDC gained 3.6% to
close at Rs 434, and NTPC closed 1% up at Rs 233.10.

Rar(e)ing Bull, loyalists take fancy to GIC Housing
Trade volumes in the GIC Housing Finance stock have shot up over the past few sessions. The counter witnessed a few bulk deals on Thursday and Friday, with Caledonia Investments, the largest institutional investor in the company, offloading nearly 32 lakh shares of the 51 lakh shares it held in its portfolio. Stock exchange websites (BSE and NSE) have no details of the buyers.

Buzz is that the Rar(e)ing Bull and his loyalists have been accumulating the shares. The Bull has publicly said that he’s no fan of real estate companies. But it looks like he doesn’t mind betting on sectors
that stand to gain if property developers do well.

Sebi wants to trace route of mutual fund ‘trail’
Not long ago, Sebi had slammed mutual fund houses for demanding a no-objection certificate from investors who wished to change distributors. The issue is back in focus, with a section of the industry protesting that some AMCs have continued to pass on trail to the ‘old’ distributor, despite knowing that it amounts to restrictive trade practice.

Perception is that companies want to protect old distributors who had bought in the client. Talk is that the regulator is taking a serious view of the issue and is likely to check whether trail has been going to the old distributor despite an investor having indicated otherwise. The issue clearly highlights the divide between larger and smaller asset management companies (AMCs).

Contributed by Reena Zachariah, Santosh Nair & Deeptha Rajkumar

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Mid-term picks of the day | Top 5 picks of the day

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Morning Newsletters - Jan 12 2010

Infinite Computer Solutions - Apply or Avoid ?

NTPC Ltd

ACE

IRB Infrastructure Developers

Themes for 2010

Ranbaxy

Src: Economictimes, Deadpresident Blog and etc

Heard on the Street

Heard on the Street

Cerebra snaps winning streak as traders corner co

Shares of Bangalore-based Cerebra Integrated Technologies snapped a 4-day winning streak to close at Rs 14.35, down 2.2% over the previous close. Buzz is that the stock is being cornered by traders close to “friendly circles” on talk that a Singapore-listed firm may pick up a strategic stake in the company. The overseas firm is said to be one of the largest electronic waste management in Singapore, and has been looking to expand its presence in India for some time.

According to people familiar with the development, the talks are at the final stage to set up India’s largest e-waste facility in India. Cerebra recently amended its main objects of memorandum of association to foray into electronic waste management. When contacted, V Ranganathan, MD, said confirmed that there were plans to foray into the e-waste segment.

Desperate house calls for stock recommendations

It is that phase of the bull run when analysts are unable to justify the valuations of shares by conventional ratios. Nevertheless, stocks have to be sold to eager clients, and there has to be some ‘story’ or ‘fundamental’ hook to it. As the joke goes, if a stock can’t be justified as a good buy based on the traditional price to earning multiple, then market it based on its price to cash earnings multiples.

If it still doesn’t look cheap, try the enterprise value to operating profits (EV/EBIDTA) ratio. If that doesn’t work, look at the market capitalisation as a multiple of sales. If that too fails, point out the “embedded value” in the stock in terms of holdings in group companies and other investments. And if everything fails, the scrip can still be marketed as a “concept stock”, only for the discerning investors with a long-term horizon. But above all, get the client to buy it.

Local institution’s sudden frenzy boosts Divi’s Lab

Shares of Divi’s Lab gained over 3% on Thursday to close at Rs 709.65, backed by heavy volumes. Over 10 lakh shares — more than 4 times the 2-week daily average volume — changed hands on both exchanges combined, but less than 30% of those trades resulted in delivery. Dealers said the sudden bout of buying came as a surprise, considering that the company’s third quarter numbers likely to be mediocre, just like those in the two quarters that preceded it.

A domestic institutional investor with a sizeable exposure to the stock is said to have whipped up the frenzy at the counter on Thursday. With most of the leading names already fully priced at current levels, investors now appear to be scouting for companies with not so impressive earnings, but those where a surprise performance could have a multiplier effect on the stock price.

Contributed by Apurv Gupta & Santosh Nair

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Top 5 picks | Mid term picks



sRC: et

Heard on the Street

Heard on the Street

TIL is back on HNIs’ radar as co lines up infrastructure projects

Touted as a fundamental play, TIL shares are back on the radar of some high net worth individuals, who have been accumulating the stock. The scrip, which has gained 18% over the past month, jumped 4% on BSE on Tuesday to close at Rs 348.60.

The company has clocked an earning per share of Rs 12.53 for the half year-ended September. With many infrastructure projects on the anvil for 2010, companies in this segment are expected to gain traction, say analysts. TIL’s principal activities are manufacturing and market heavy engineering equipment used in the infrastructure sector. The firm operates in three segments: construction and mining solutions, power system solutions and material handling solutions.

Bull on a value hunt laps up NHPC despite its poor show

Most investors burnt their fingers subscribing to the initial public offering of state-owned NHPC. After briefly topping its issue price on listing, the stock has been languishing below that mark ever since. Of late, a Rar(e)ing Bull appears to have taken a fancy for the stock.

In the past couple of trading sessions, the Bull is said to have accumulated over 25 lakh shares. It is not clear if he is merely scouting for value, or whether he is anticipating some favourable policy announcement that could benefit the company.

Talk of agro-chem joint venture with MNC lifts Astec Lifesciences

Astec Lifesciences has come on the radar of operators yet again. The buzz in the market is that Astec is planning to enter into a joint venture with a multinational company to expand its agro-chemical product profile. The joint venture, if it materialises, is expected to give a booster shot to the profit and turnover margins of Astec Lifesciences.

According to analysts tracking the company, Astec has been looking for technology support partners to grow its R&D and pharmaceuticals business. “The company could tie up with some research agency or a foreign company to grow its business verticals. A full-fledged JV for product development looks very unlikely at the moment,” said an analyst tracking the company. Shares of Astec Lifesciences ended 0.3% higher at Rs 82.35 on BSE on Tuesday.

(Contributed by Deeptha Rajkumar, Santosh Nair & Shailesh Menon)



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op 5 picks of the day I Mid-term picks

• Are we in for another bull run?
• Nifty support may come at 5120-5080
• Small companies reward their followers in 2009

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Src: ET

Heard on the street

Heard on the street

Market on a lean holiday diet in 2011

STOCK exchanges

have been spared some more unpopularity, thanks to several public holidays falling on weekends. There is a move afoot to cut down the number of trading holidays, as the wise men feel that the Indian market has one too many, compared to international markets. The reason to cut down on the number of holidays is based on the premise that investors here will not have a chance to react to major global events if the Indian market is closed.

This is, of course, assuming that no major global developments will unfold on January 26, August 15, or on the day of Bhau Bheej, or any of the other holidays that do not happen to be global ones.

“This year a large proportion of the holidays is falling on a Saturday/Sunday. We have only 11-12 holidays falling during the week. This year is taken care of. 2011 is when a shorter list — 8 to 10 days — will come into effect by which time the equity market will also have moved to a 9-5 pm cycle,” said a senior broker, who was present at the meeting NSE had with six top retail broking firms.

Garware Offshore sets sails for the north

SHARES of Garware Offshore have risen around 12% in the past one month. Buzz is that increasing demand for offshore support vessels is driving interest in the stock. Speculation is that some financial and strategic investors

are planning to pick up a stake in the company through secondary market transactions, though talks are said to be at a preliminary stage. In anticipation of this, “friendly circles” are said to be accumulating the stock

.

Rel Equity, Daiwa lose top honchos to Macquarie

MACQUARIE Securities is looking to beef up its equities team in India. Amongst its new hires are Sudhanshu Bhuwalka who joins as associate director, equity sales, from Reliance Equities, where he was co-head of equity sales. Neil Nathwani has joined Macquarie’s equity sales team from Daiwa in London where he was the India specialist for Europe. Suresh Ganapathy is joining to head Macquarie’s financials research team for India. He joins from Deutsche Bank’s cash equities business in India.

Orient Green Power to raise Rs 600-cr via IPO

GREEN is the new black. With green or clean energy gaining momentum across the globe, market observers expect companies operating in the renewable energy space to take the IPO route. Orient Green Power, a subsidiary of Shriram EPC is one such candidate. It has appointed Goldman Sachs, UBS and JM Financial as bankers for its Rs 500-600 crore IPO.

Contributed by Deeptha Rajkumar, Reena Zachariah & Apurv Gupta


Src: ET
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Balmer Lawrie & Company: Bargain hunt begins! Rathin Shah

India equity strategy: 2010 NextGen India Investments

14th Annual Wealth Creation Study 2004-2009 Motilal Oswal

Two attractive mid cap picks Sanjay Chhabria

Picks for an aggressive stock portfolio

Picks for a conservative stock portfolio


Src: Valuenotes

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Heard on the street

Heard on the street


Rain Commodities on a high as FIs turn bullish

Shares

of Rain Commodities, one of the largest producers of calcined petroleum coke (CPC), have been on an upward journey despite a downtrend in the broader market in the past few weeks. Market sources say institutional investors have been bullish on the stock with a leading mutual fund acquiring sizeable stake through the open-market route recently.

Analysts expect CPC demand to get a boost amid commissioning of many large aluminium capacities in the next few years. Rain Commodities also manufacturers cement which is marketed under the brand ‘Priya Cement’ in the South. Last week, Reliance Mutual Fund bought a 4.5% equity, raising its stake to 9.1% in the company.

The growing institutional interest in the counter is also reflected in the sharp rise in the share price. The stock climbed 9% to Rs 234.8 in a flat market on Thursday, recording a 39% jump in the past one month.

Overseas fund managers welcome early trade

Foreign fund managers tracking India out of Singapore and Hong Kong are happy that trade timings have been advanced rather than extended, while domestic fund managers wish that it would have been the other way round. These money managers

start their day as early as 7 am (Hong Kong/Singapore time).

By the time those markets close, there is about two-and-a-half hours of trading still left in India. So, the fund managers leave for home at 6 pm (HK/Singapore). Had timings been extended beyond 3:30, these fund managers would have been delayed in office for another hour. But domestic fund managers are unhappy, considering that they will now have to begin their day earlier.

Lack of clarity on RIL’s Lyondell bid drags down

Shares of Reliance Industries drifted lower on Thursday, shedding 1.2% over its previous close to end the day at Rs 1,034, and weighing down the main indices. The market is awaiting whether RIL will make a financial

bid for Dutch petrochemical firm LyondellBasell.

Market participants say officials from RIL’s investor relations team had met up with fund managers on Tuesday, where it was indicated that the bidding process could be a long-drawn affair, and that it would bid “reasonably” and not “aggressively”.

(Contributed by Vijay Gurav & Santosh Nair)


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India Financials

Wealth Creation Study

Src: Economictimes, DP Blog

Heard on the Street

Heard on the Street

Domestic institutions lap up Mangalam Cement
Rajasthan-based Mangalam Cement is said to have caught the fancy of a few domestic institutions of late. The stock was the star performer on Monday, rising 9% to close at Rs 138, despite the overall trend being sluggish. With Monday’s gains, the stock has climbed around 20% over the past one month. Buzz is that a private insurance company is leading the pack of domestic buyers. This insurer is said to have mopped up close to 4%. Analysts tracking say Mangalam is one of the safer bets among small-cap cement stocks.

Short-sellers in JSW Energy may lose
Traders, who have gone short on the JSW Energy issue in the grey market, could find themselves in a spot of bother. Talk is that the issue is likely to be priced closer to the lower end of the price band of Rs 100-115. The issue, which has been subscribed 1.7 times, received a moderate response from investors. The company may have decided against pricing the issue aggressively.

A leading investment bank, which failed to find a place in the syndicate of lead managers to the issue, is said to have heavily short sold through grey market punters. The punters pushed the price down to a discount of around Rs 4 to the top end of the price band. Now, that the issue is likely to be priced even lower than that, the punters could be in for a nasty surprise. But they may still end up making a tidy profit, if the stock lists at a discount to the issue price.

Market sees delay in SME trading platform
The launch of the trading platform for SMEs by existing bourses is likely to be delayed, according to market participants, pointing to the statement made by finance minister Pranab Mukherjee on Monday in Rajya Sabha. “The need and criteria of listing at SME exchange/platform are different from those for listing on BSE and NSE. Therefore, it is felt that separate SME exchange/platform of existing stock exchanges are required,” said Pranab Mukherjee in Rajya Sabha.


Rs 100-cr fund for investor awareness
Sebi is planning a Rs 100-crore investor awareness fund that will be used to spread awareness about mutual fund investments. Industry sources said the regulator is working out a plan to pool in money for the fund from AMCs. The regulator may advise fund houses to forego a small portion of the expense ratio they collect from investors. Expense ratio is an income for MFs, as it covers fund management fee and administrative costs.

As per Sebi regulations, a MF can charge a maximum expense of 2.5% for equity funds, 2.25% for debt funds and 1.5% for index funds

and 0.75% for fund of funds. MFs, on their part, maintain a small corpus of fund (also termed investor awareness fund) to educate investors. “Contributing for one more fund will further cripple the industry. As such, most fund houses are logging huge losses operating in the current environment,” said the CEO of a domestic fund house.

Contributed by Apurv Gupta, Santosh Nair, Reena Zachariah & Shailesh Menon


Src: Economictimes

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RIL woos Lyondell creditors as mgmt fights back

Heard on the street

Heard on the street

Punters zoom in on Time Technoplast Shares of Time Technoplast, a firm specialising in polymer products, witnessed a flurry of activity on Tuesday. On the National Stock Exchange (NSE), the stock rose 13.3% to close at Rs 43.05, with around 58 lakh shares changing hands. This included a bulk deal of 50 lakh shares, with Deutsche Equity Fund being the seller, according to the disclosure on the NSE website. No details of the buyer(s) were revealed. Market talk is that a clutch of mutual funds picked up the block on offer, with Reliable Mutual Fund accounting for a sizeable chunk. The company reported an earnings per share (EPS) of Rs 3.30 for FY09, and the EPS for the first half of the current financial year has not been spectacular at Rs 2.16. Talk is that the fund has been aggressively buying mid-cap stocks recently in anticipation of the next wave of bull run in the segment. MF distributors may again be left out in the cold The mutual fund industry, which is still to come to turns with the no-load regime, has been in the news of late following a debate over the need for a no-objection certificate (NoC) from an investor seeking to change distributors. With the market regulator clearly displeased with what it views as a restrictive trade practice, the industry and, in particular, the asset management companies and distributors have come under the regulatory scanner for following a practice which is against investor interest. The buzz on the street is that the AMFI-appointed committee (comprising 2-3 fund houses) has put forward the results of its analysis to Sebi. Initial feedback indicates that the requirement for an NoC will be done away with but the new distributor will not get trail commissions. The news has evoked mixed reactions from the distributor community. Most of them feel that without the trail fees there will be no incentive for a distributor to service his client. The ball is now in Sebi’s court. Motilal Oswal sales head joins to Abu Dhabi fund Jayesh Parekh, a former top institutional sales official at Motilal Oswal Financial Services, is believed to have joined Abu Dhabi Investment Authority (ADIA), a sovereign wealth fund owned by Abu Dhabi. However, ET could not confirm the role of Parekh, who was rated the top salesperson for India in the AsiaMoney Brokers poll recently, in ADIA. Earlier, ADIA had roped in Mihir Vora, equities head of HSBC Asset Management, as a fund manager. (Contributed by Santosh Nair, Deeptha Rajkumar & Nishanth Vasudevan)

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	Two attractive mid cap picks Sanjay Chhabria
	Polaris Software Labs: Buy at CMP Rs177 Nirmal Bang
	Cipla: Healthy growth going forward Punam Choudhary
	Technical Picks: Havells, Power Finance Corp HDFC Sec

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Src:Economictimes, Valenotes

Heard on the street

Heard on the street

Parent’s show of strength boosts Thomas Cook A series of positive developments helped shares of tour operator Thomas Cook (India) jump 11.93%, or Rs 6.90, on Monday to end at Rs 64.75 on BSE. According to analysts, the demand uptick in the travel and hospitality sector during the past couple of months has been boosting sentiment in the counter. The improved sentiment is expected to continue over winter, the peak season. Around the same time last year, the business was dull as a result of the global financial crisis and the subsequent Mumbai terror attacks. But what appears to have helped the counter on Monday was the strong set of numbers put out by the company’s European parent Thomas Cook for the full year ended September 30, 2009. Thomas Cook (India) touched an intra-day high of Rs 67 and low of Rs 59.70 before closing at Rs 64.75 on BSE. Institutional buying lifts Man Aluminium After two sessions of harsh selling, institutional investors started buying shares of Man Aluminium at lower prices in sizeable quantities. Man Aluminium shares were pounded on bourses last week (post-reports of Dubai debt debacle) as investors feared Dubai Bank PJSC, which holds 4.3% in the Indian aluminium company, would dump its India equity holdings, including Man Aluminium, to make good their losses in Dubai. Firm aluminium prices also supported the shares of the company. The near-month aluminium contract on MCX was trading at Rs 93.25 per kilo, up by Rs 0.70 from Friday’s close. Shares of Man Aluminium ended 1.9% higher at Rs 42.90 on the BSE on Monday. Earnings growth hopes trigger demand in Marico Institutional investors have been active in the Marico counter on hopes of better prospects for the company, after a leading Mumbai-based broking house said the company would sustain earnings growth amid national rollout of new products. In its research report, the broking house said the company’s strategy to reinvest savings in brands will help it post better volume growth even as the topline would moderate due to diminishing price growth. Recently, FII Arisaig Partners acquired nearly 17 lakh Marico shares to raise its stake to 5.2% through open market purchases. The stock has been seeing some action in the current market though it has underperformed the recent bull run. Marico closed marginally up at Rs 103.5 on Monday. The delivery ratio, which reflects long-term investor interest in a particular stock, has been healthy between 45 to 65% during the past few days. Contributed by Reena Zachariah, Shailesh Menon & Vijay Gurav

Src: Economictimes

Heard on the street

Heard on the street

Bonus bonanza drives volumes on RIL counter

A day before Reliance Industries (RIL) becomes ex-bonus (price being adjusted for 1:1 bonus), investors were seen flocking to the counter and, interestingly, many of them preferred to take delivery of shares than squaring off their positions intra-day.

According to brokers, the liberal bonus offers a good tax-planning opportunity for the shareholders. They can buy a certain number of shares cum-bonus (before being adjusted for bonus) and sell them ex-bonus, thus booking a loss that can be set off against short-term capital gains earned on any other transactions. By doing so, they would be entitled to bonus shares and would also save tax.

The RIL counter attracted delivery-based volume of 39.5% of the 13.2 lakh total traded shares on Wednesday, compared to 28.9% (7 lakh shares) and 22.8% (12.6 lakh shares) on the previous two days. The stock closed 0.8% higher at Rs 2,194 on the day.

FM to announce UTI stake sale after regulatory nod

The formal announcement of the 26% equity stake sale of UTI Mutual Fund to US-based investment firm T Rowe Price is expected to be made by finance minister Pranab Mukherjee next month. “There will be formal announcement on the stake sale after receiving all the regulatory approvals... it will be announced by a senior government official,” said an official familiar with the matter.

The NYSE-listed financial services firm would be paying $135 million for a 26% stake in the Mumbai-based fund house. The valuation works out to be 3.6% of assets managed by UTI AMC as on August 31, 2009.

L&T poised to make a grand exit from Satyam

Investors have been buying shares of engineering behemoth Larsen & Toubro (L&T) in large numbers on talks that the company will benefit immensely from a probable sell-off of Satyam Computer shares over the next few months. According to brokers, L&T had been accumulating shares of Satyam Computers since early-December last year.

L&T raised its stake by over 13% in Satyam Computers between December 2008 and February 2009. L&T, along with L&T Capital, holds a 6.9% stake in Satyam Computers as on September 2009. With L&T investment in Satyam nearing one year, the engineering company is expected to exit the stock.

Analysts are expecting Tech Mahindra (which acquired Satyam in April 2009) to buy the L&T stake in Satyam at a high price. This will further improve the cash position of L&T, say brokers. Shares of L&T ended 0.1% higher at Rs 1,650.45 on the BSE. Satyam Computers closed 11% lower at Rs 90.55 on Wednesday.

( Contributed by Vijay Gurav, Reena Zachariah & Shailesh Menon)

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Mid-term picks | Top 5 picks | Infy@all-time high

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Src: Economic Times

Heard on the Street - ET

Heard on the Street

Bears move in for the kill on Bharti counter
The tug of war at the Bharti Airtel counter continues. Just when it seemed that the stock was recovering lost ground, the bears have struck again. The stock was the among the biggest losers in Tuesday’s volatile session, shedding over 4% to close at Rs 293. Near-term outlook on the sector is bearish because of the ongoing tariff war.

But bears have not been able to make a killing so far. Most fund managers have an exposure to the stock, and talk is that they have been supporting the price at lower levels. Traders see Rs 280 as a key support for the stock, as it was the lowest level touched during the market meltdown in October-November last year. Bears will be looking to push the stock below this level so as to trigger technical-based selling pressure at the counter.

KSK Energy hops on to the QIP bandwagon
Even as the near-term outlook on the equity market remains uncertain, the qualified institutional placement (QIP) bandwagon continues to roll on. The latest company to raise funds through this route is KSK Energy Ventures. The indicative price band for the issue is Rs 194.50-196, and the company hopes to mop up around $125 million. KSK shares on Tuesday closed at Rs 198.60, up 0.2% over the previous close.

Market fails to warm up to interest rate futures
Despite interest rate futures having been made accessible to a wider base of participants in its new avatar, the segment is yet to generate excitement among market participants. The buzz is that most of the players, mutual funds and financial institutions are waiting for the first round of settlement of contracts.

The main concern is about the physical delivery and the fact that it’s a 30-day delivery period. Industry participants say the product in itself needs to be tweaked to make it more ‘user friendly’.

Spinning a yarn to make a pile
An investor-cum-operator, who runs an investment company named after an ocean, is believed to be active again in his favourites — Welspun Gujarat Stahl Rohren and Gokul Refoils. The operator, who has been booked by Sebi on various counts of front-running and circular trading, and his friends have been spreading rumours about both the companies securing large orders from overseas clients, market sources said.

Grapevine has it that the operator and his friends ramp up stock prices, while floating rumours, and dump the stock after it reaches a specific price target. Shares of Welspun ended 0.7% lower at Rs 275.25 on Tuesday while Gokul Refoils closed 1.5% higher at Rs 56.80 on the BSE.

Contributed by Santosh Nair, Deeptha Rajkumar & Shailesh Menon

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Nifty may find it tough to breach 4900-mark
11 Nov 2009, 0230 hrs IST, Devangi Joshi

The Nifty appears to be facing a tough time crossing the 4900-mark. The resistance at 4900 is highlighted by an addition of 12 lakh shares.

Mid-term picks | Views/Recommendations



Src: Economictimes.Indiatimes.com

Heard on the Street

Heard on the Street


General Atlantic seen in talks to buy Bhilwara stake

US-Based PE investor General Atlantic is learnt to be in talks to pick up an equity stake in Bhilwara Energy, the power generation company of the LNJ Bhilwara Group for around $100-150 million, according to investment banking sources. “We are exploring a lot of opportunities, including selling stake to a private equity fund, but nothing has been firmed up yet,” said Riju Jhunjhunwala, executive director of Bhilwara Energy, while admitting that his firm was in talks with private equity firms. Bhilwara Energy is planning an investment of close to Rs 10,000 crore over the next five years. Earlier in 2007, Bhilwara Energy had raised a little over Rs 100 crore from New York Life Investment Management and Wachovia.

Ramsarup Industries in talks to raise Rs 100 cr

Ramsarup Industries, a Kolkata-based producer of steel wires, is believed to be in talks with institutional investors, including mutual funds, to raise close to Rs 100 crore to fund its expansion plans. It is learnt that the company has held talks with potential investors recently, but is yet to finalise the pricing of the share placement. A person familiar with the matter said the company is looking to place the shares at roughly Rs 110 per share. On Monday, Ramsarup shares ended at Rs 80.15, down 4.2%.

Broking houses to help themselves to liquidity

After having helped their clients raise money and also make some, brokerage firms feel it is time they helped themselves to some of the liquidity that is sloshing around, before it dries up. Three prominent domestic brokerage houses, all of them listed, are said to be looking to raise around $200 million each. The buzz is that they have already begun approaching institutional investors, hopeful that improved market conditions will help them get the desired valuations. Brokerage firms are expected to report strong growth in quarterly earnings, thanks to the upbeat mood in both the primary and secondary markets.

Patels Airtemp scrip inches up on HNI buy

Patels Airtemp is being accumulated at lower levels by HNIs and some MFs. The scrip which has been inching up on bourses, ended at Rs 58.60 on BSE on Monday. The company is debt free and has an order book of around Rs 100-110 crore. Given the government’s thrust on infrastructure, it is expected to sustain the momentum, feel analysts.


Reena Zachariah, Nishanth Vasudevan, Deeptha Rajkumar & Santosh Nair



Src:Economic Times.com

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