Saturday, February 21, 2015

BNRSTOCKS-TWEETS..2015..!!!!

Posted by BAMMIDI NAGESWARARAO at 2/21/2015 11:53:00 am 0 comments

SHIPPING COMPANY WOES.!!...GE, MERCATOR, SCI,ESSAR..!!

Why did Baltic Dry Index drop to its lowest point ever?

Wednesday, 18 February 2015 - 9:55am IST | Place: Mumbai | Agency: dna Web Tea
The earlier lowest point was 554 in the August of 1986.
  • Representational image AFP AFP photo
Baltic Dry Index (BDI), the measure of the freight costs of shipping, has fallen to its lowest point in 30  years on the back of the imminent economic slowdown in China. 
According to Bloomberg data, on Tuesday, BDI dropped another 1.15% to close at 516 points. The index has already fallen over 34% year-to-date and nearly 55% over the past year. 
The earlier lowest point was 554 in the August of 1986. 
The global commodity trade is dominated by Chinese imports of key raw materials like coal and iron ore. In the wake of the slowdown in Chinese economy, the demand for these raw materials is falling and the cargo ships are running idle, leading to the fall , or freight rates. 
Various reports ranging from International Monetary Fund to the World Bank, theChinese economy is slowing down. 
In January this month, China posted its weakest annual growth rates in 24 years. 
The country even missed the official target and grew by only 7.4% last year. In the year before last, Chinese economy expanded by 7.7%. 
The effect of this Chinese slowdown has impacted its international trade as well. 
Its exports in January fell by over 3% and imports nosedived by 20%. 
It is this fall in imports that is putting pressure on freight rates across the world and the subsequent fall in BDI. 
Between its imports of iron and coal, China commands over 50% of the world's demand for these two raw materials. 
According to this report, the fall in Chinese imports is steepest since the economic slowdown of 2009. 
Another reason for this fall in BDI is excess shipping capacity. 
Shipping companies across the world went on a buying spree in wake of ever increase Chinese appetite for raw materials to fuel its economy. 
However, the global economic slowdown of the past decade reversed the trend. The result was the fall in commodity prices because of lack of demand. Shipping companies, who were adding capacity at a fast pace to handle the growing demand were suddenly sitting with huge debts and idle ships. 
http://www.dnaindia.com/money/report-china-slowdown-baltic-dry-index-drops-to-30-year-lows-2061992

Posted by BAMMIDI NAGESWARARAO at 2/21/2015 11:44:00 am 0 comments

Thursday, February 19, 2015

RCOM-QIP- STOCK SLIDE..HUGE DEBT.!!!

Reliance Communications’ QIP investors lose nearly 50% QIP issuance has turned out to be a regrettable chapter from an investor relations’ perspective Mobis Philipose 
 Monetization of the company’s non-core assets continues to look like a distant dream. Photo: Hemant Mishra/Mint Reliance Communications Ltd (R-Com) had struck when the iron was hot in mid-2014. It raised Rs.4,800 crore through a qualified institutional placement (QIP) at a time when the risk appetite for Indian stocks had risen considerably. But the large investors who bought shares in the issue are now sitting on a loss of almost 50%. 

 As far as the company goes, it may have got the funds, but from an investor relations’ perspective, the QIP issuance has turned out to be a regrettable chapter. During the time of the issue, it had seemed that R-Com would backup the fund-raising with sale of non-core assets.

 A report in The Economic Times had said in June 2014 that the company plans to sell its international business, Global Cloud Xchange, in the next three-four months, its direct-to-home television business in six months and its real estate holdings over a two-three year period. But about eight months later, there is no visibility on any of this. Monetization of the company’s non-core assets continues to look like a distant dream. Besides, as R-Com’s quarterly results statements have shown, there’s hardly anything in its operational performance to get excited about.

 In the December quarter, revenues and Ebitda (earnings before interest, taxes, depreciation and amortization) rose by 1.2% and 0.3%, respectively. In the nine months till December, Ebitda fell by 5.7%, while revenues were more or less flat. Meanwhile, competitors Bharti Airtel Ltd and Idea Cellular Ltd have been reporting strong growth in profit in the past few quarters. In addition, R-Com faces the greatest risk from the impending entry of Reliance Jio Infocomm Ltd. Analysts say that one of R-Com’s thriving businesses is data cards (also known as dongles), which can immediately come under pressure from Reliance Jio’s data-centric offerings.

 According to an analyst with a domestic institutional brokerage firm, in the forthcoming auctions, the company also faces the risk of not being able to get renewal spectrum to continue services in some key circles. The reason for this is that the spectrum on offer is limited, and larger companies such as Bharti Airtel, Idea Cellular and Vodafone India Ltd may well use their financial muscle to buy better quality 900 megahertz spectrum, even in circles where they aren’t compelled to bid. R-Com, on the other hand, is laden with debt and doesn’t have the luxury of some of its competitors while bidding in the auctions.

 After the QIP issue, net debt has reduced from around Rs.40,000 crore to Rs.36,767 crore. A silver lining is that the company is generating cash flow from its core operations. However, it has no option but to quickly monetize non-core assets and reduce debt. The longer it takes to do this, the more it will distance investors. The writer doesn’t own shares in the above-mentioned companies.

Read more at: http://www.livemint.com/Money/Tazh7uS5kzzC0UVo5rcjDK/Reliance-Communications-QIP-investors-lose-nearly-50.html?utm_source=copy
Posted by BAMMIDI NAGESWARARAO at 2/19/2015 11:22:00 pm 0 comments

Monday, February 16, 2015

RE-NEW-ENERGY.. Rs. 5 lakh crore!!!!

CHENNAI, FEBRUARY 16:  
The “commitments” made by a couple of hundred renewable energy companies for setting up 266,000 MW of solar and wind power projects over the next five years has created a wave of derisive sniggers in the industry.
Many industry insiders as well as observers feel that too much hype and unrealistic ambitions can only harm the industry.
“Given the base we are at today, of around 30,000 MW (of installed capacity of renewable energy), 266,000 MW in five years looks high,” says Santosh Kamath, Partner and Head-Renewables, KPMG. However, even if 50 per cent of it is achieved, it will be a game-changer for India, he says.
Today, at a conservative estimate, 1 MW of solar would call for Rs. 7 crore, and 1 MW of wind about Rs. 6.5 crore. Even assuming a still lower estimate of Rs. 6 crore a MW, 266,000 MW would require Rs. 16 lakh crore. At a debt-equity divide of 70:30, equity required would be close to Rs. 5 lakh crore, or roughly $ 80 billion—over the next five years.
“Against 266 GW of commitments, banks have offered funding commitments of only 78 GW,” says Dr Arunabha Ghosh, Chief Executive Officer of the Council on Energy, Environment and Water, a Delhi-based think-tank.
Even the 100 GW solar target of the Ministry of New and Renewable Energy would call for $ 160 billion, says Dr Ghosh.
According to Mercom Capital, which tracks funding for the renewable energy industry, the announced large-scale project funding in 2014 globally was $ 20 billion.
The message distilled from the various numbers is the commitments are too ambitions even only from financing perspective. And then there are other challenges.
Ashwin Gambhir of another think-tank, Prayas Energy Group of Pune, points to three key challenges: financial viability of the entire distribution sector, ensuring project development and land use, and issues relating to grid. “All this would require effective and innovative implementation mechanisms,” he says. Arunabha Ghosh speaks of the need for over all credit guarantee and payment security as key issues.
Many solar developers that Business Line talked (though none of them was willing to be quoted) said that while the commitments totalling 266 GW reflect the rise of renewable energy, unrealistic targets build up high expectations leading on to a bad name for the industry.
(This article was published on February 16, 2015)
http://www.thehindubusinessline.com/economy/renewable-energy-hype-unviable-
promises-not-good-for-the-industry/article6902306.ece
Posted by BAMMIDI NAGESWARARAO at 2/16/2015 09:10:00 pm 0 comments

Sunday, February 15, 2015

CSR- 14000 Cr !!

CSR spend may grow over 4 times to Rs 15k cr: Study

The finding was part of a report by consultancy firm BCG and Nasscom Foundation
Press Trust of India  |  New Delhi  
 Last Updated at 10:40 IST

Spending by Indian companies on corporate social responsibility (CSR) activities can grow more than four times to $2.5 billion (over Rs 15,000 crore) a year if all companies spend the funds as per the norms.

The total spending on CSR initiatives stood at $600 million in the 2012-13 fiscal, while almost half was accounted for by top 10 entities including RIL, Coal India, Tata Steel and SBI.

These funds were spent by the companies on various social initiatives of the government and NGOs.

"If all eligible companies spend their mandated budget this year, CSR spend is estimated to grow about four times to $2.5 billion and technology companies will likely contribute about 20 per cent or more of this," according to a report by consultancy firm BCG and Nasscom Foundation.

As per the new regulations under the Companies Act, 2013, the government has mandated a minimum CSR spend of 2 per cent of the company's profits, for all organisations above a certain size of revenues and profit.

Analysis of CSR activities of top 100 companies shows that the mode of giving has primarily been through NGOs and other social organisations as around 90 per cent companies are channelling their funds through these organisations.

"While majority of companies have established in-house foundations to engage in social activities, around 10 per cent of the organisations choose to design and execute activities directly through them," the report said.

Besides providing monetary assistance, companies are now also beginning to show greater degree of involvement in social initiatives like volunteering and providing expertise on best practices to NGOs.

A sector-wise analysis shows education and healthcare have received disproportionate attention with around 80 per cent of the companies supporting these two sectors.

Many companies are focusing on providing access to quality primary education, supporting mid-day meals at schools as well as health check-ups or blood donation camps. Other focus areas include skills development, women's empowerment and environment sustainability.

The CSR norms came into effect from April 1 last year through the Companies Act, 2013, which is being implemented by the Corporate Affairs Ministry.

As per the norms, a certain class of profitable companies are required to shell out at least 2 per cent of their three- year average annual net profit on CSR activities.

Going by estimates, about Rs 14,000 crore is expected to be spent towards CSR activities by companies in the current fiscal.

http://www.business-standard.com/article/pti-stories/csr-spend-may-grow-over-4-times-to-2-5-bn-study-115021500107_1.html
Posted by BAMMIDI NAGESWARARAO at 2/15/2015 11:01:00 pm 0 comments

Friday, February 13, 2015

FII holdings RISE IN HPCL,BPCL &IOC

FII holdings in oil PSUs hit multi-year high

In the December quarter FIIs hiked their stake in HPCL to 18.92%, in BPCL in 15.20% and in IOC to 2.61%
Deepak Korgaonkar  |  Mumbai  
 Last Updated at 10:46 IST
Foreign institutional investors (FIIs) have remained bullish on the state-owned oil marketing companies (OMCs) raising their stake for the fourth straight quarter ended December 31, 2014.

Their holdings in Hindustan Petroleum Corp Ltd (HPCL), Bharat Petroleum Corp Ltd (BPCL) and Indian Oil Corporation (IOC) have hit multi-year highs in October-December, 2014 quarter (Q3FY15).

The overseas investor’s holdings in HPCL and BPCL have touched eight-year high, while their stake in IOC at highest level since March 2001.

A sharp fall in crude oil prices and complete de-regulation of diesel prices seem to have sparked a renewed interest in stocks of OMCs among the overseas investors.

The current fiscal witnessed a series of positive developments. A stable/growth oriented government, free fall in crude prices and diesel decontrol has totally changed the terrain.

In HPCL, FIIs increased their stake by nearly 5 percentage points to 18.92% in December quarter against 14.10% as on September 30, 2014. They held 10% stake in the company at the end of December 2013 quarter.

HPCL stock, the largest gainer among the pack, has outperformed the market by surging 22% from Rs 483 on September 30, 2014 to Rs 589 on BSE till yesterday. The benchmark index S&P BSE Sensex gained 3% during the period.

The top funds that have stepped up buying in HPCL include National Westminster Bank PLC as Trustee and Merrill Lynch Capital Markets Espana S.A., the latest shareholding pattern data shows.

In BPCL, the overseas investors hiked their holdings by 2.6 percentage points to 15.20% from 12.57%, while in IOC to 2.61% from 2.45% in the September 2014 quarter. They held 10.14% stake in BPCL and 2.13% in IOC at the end of December 2013 quarter.

Domestic institutional investors led by insurance giant Life Insurance Corporation of India have reduced their stake in these companies during the recently concluded quarter.

QuarterFIIs stake in %DIIs stake in %
endedBPCLHPCLIOCBPCLHPCLIOC
Dec'201310.149.992.1317.6322.644.41
March'201411.3710.562.2116.7522.114.79
June'201412.2312.502.4115.9020.464.58
Sep'201412.5714.012.4515.7820.034.58
Dec'201415.2018.922.6113.9616.564.41
       
Source : Shareholding pattern/BSE

Meanwhile, the OMCs are expected to report profits buoyed by lower interest costs which has been a drag on profitability for quite some time.

Analysts expect OMCs to record earnings for the three months to December. On average, analysts projected an aggregate net profit of Rs 1,230 crore n the third quarter ending December, according to data compiled by Bloomberg. These three companies had posted a combined net loss of Rs 4,198 crore in the same quarter of the previous year. They remain positive on state-run upstream companies as subsidy reforms get implemented on the back of an improvement in production outlook.

“Oil under-recovery (the genesis of all problems for OMCs) is likely to fall from Rs 140,000 crore in FY14 to Rs 40,000 crore in FY16/17 (assuming crude at $ 80/bbl and INR-USD at 63). As a result, OMCs’ total debt/interest will reduce from Rs 1,325/78 billion to Rs 766/45 billion”, said Satish Mishra, analyst at HDFC securities Institutional Research in a report.
 http://www.business-standard.com/article/markets/fiis-holdings-in-oil-psus-hit-multi-year-high-115011200186_1.html
Posted by BAMMIDI NAGESWARARAO at 2/13/2015 10:44:00 pm 0 comments

Thursday, February 12, 2015

MUTUAL FUNDS SITTING TIGHT....?????

Is your mutual fund sitting on your cash?

If it is for a prolonged period, check its performance vis-a-vis peers' as well as benchmark and then take a call
Tinesh Bhasin  |  Mumbai  
 Last Updated at 22:35 IST
If your mutual fund scheme is sitting on 20 per cent cash, is it an underperformer? Not necessarily. ICICI Prudential Dynamic Plan has returned 37 per cent in 2014 against its benchmark – Nifty’s – return of 31 per cent. The scheme was sitting at cash levels of 19 per cent in December 2014.

Similarly, there are as many as 17 mutual fund schemes that are sitting on cash of 10 per cent in December. Of these,Quantum Long Term Equity Fund tops the list with cash levels of 32.49 per cent and two funds from Escorts had cash levels of 24 per cent. Two dynamic funds from HSBC and ICICI Prudential had cash of 23.92 per cent and 19 per cent, respectively.

Explains I V Subramaniam, director, Quantum AMC: “Holding cash doesn’t mean we are timing the market. We booked profits on stocks when we thought the value was good. If you look at the corporate results, nothing has changed significantly. When we see valuation change irrespective of the index levels, we will invest.”

After the global financial meltdown in 2008, many equity funds kept a significant amount of portfolio in cash due to redemption pressure and market uncertainty. Those who did not deploy the cash sooner had a tough time recovering. “Even some good funds took two-three years to better the benchmark and give returns above the category average,” says Dhaval Kapadia, director investment advisory at Morningstar India.

According to Vidya Bala, head of mutual fund research at FundsIndia, mutual funds can hold high amount of cash in some situations. Mutual funds keep 20-25 per cent cash for a few weeks when markets are nose-diving like it happened in 2008. This helps them protect the downside risk.
“High cash holdings usually do not last over a quarter,” says Bala.

Some dynamic funds have a mandate to stop investing when they think the market has turned expensive. For example, HSBC Dynamic Fund and ICICI Prudential Dynamic Fund say upfront that they will move to cash when they perceive valuations to be high.

Mid- and small-cap funds follow this strategy often when the markets see a significant run-up. During a rising market, mid- and small-cap companies can become expensive and make the fund managers uncomfortable. These stocks are also not as liquid as say the 50 stocks in National Stock Exchange’s Nifty. “Funds book profit in such scenario and deploy the cash they received slowly in a phased manner,” said Kapadia.

From an investor’s perspective, it is important to see how long the scheme has held on to cash. If it is for a long time, say a year or so, there could be questions about the fund manager’s ability to pick stocks. On the other hand, if it is a tactical profit booking, then it is good for the scheme. Sometimes, the fund manager is forced to keep cash owing to redemption pressure. In such cases, compare the performance of the scheme with peers and benchmark. “If the scheme is holding 90 per cent in equities, investors really need not worry,” adds Bala
http://www.business-standard.com/article/pf/is-your-mutual-fund-sitting-on-your-cash-115021100379_1.html
Posted by BAMMIDI NAGESWARARAO at 2/12/2015 11:10:00 pm 0 comments

SHIPPING COMPANY WOES...!!

 

Baltic index on crash course, at 28-year low

Coal, fertiliser importers to benefit but shipping firms in troubled waters
Aditi Divekar  |  Mumbai  
 Last Updated at 00:57 IST
Commodity shipping costs are at a record low, with the Baltic Dry Index falling 30 per cent to 556 points, the lowest since 1986.

In the past two months, freight rates for major bulk commodities such as iron ore, coal and grain have dropped about 40 per cent, as slowing demand for coal from China, as well as weaker bookings, have compounded a fleet glut. This year, the Chinese economy, which buys about half the world’s coal and ore cargoes, is set to expand less than in 25 years, economists’ forecasts compiled by Bloomberg show.

While the fall in the index is proving beneficial to India’s coal and fertiliser importers such as NTPC, Adani Power, Tata Steel and Steel Authority of India, it is a drag for shipping companies, as lower freight rates hurt their revenue. For shipping companies to break even, the Baltic Dry Index has to be at 3,500, at the least.

“In the case of fertilisers such as di-ammonium phosphates, freight rates have declined 20-25 per cent in the past two months in the West Asia-India route,” said an executive of SIVA Bulk, the fourth-largest carrier of coal into India. “Coal freight has declined to $10 a tonne from $15 in the past two months, on the South Africa-India route,” said another company executive.

India primarily imports coal from Richards Bay in South Africa, Australia and Indonesia. Overall, coal freights have declined 25 per cent in the past two months, said the official. “There is a benefit for chartering companies, those that are on time charter, but the extent of the benefit depends on the nature of the contract they have signed for the import.”

Chartering companies are those that import or export cargo, either by hiring a vessel from shipping companies or appointing a shipbroker to deliver the cargo. With a fall in the Baltic Dry Index, those companies with spot contracts will benefit the most, compared to those running on long-term contracts (for about a year) or short-term deals (two-three months).

Exporters of rice and basmati will also benefit. For the year ended March 2014, India exported rice and wheat worth $9.6 billion.

Given trade troubles across the globe, especially the slowing coal imports from China and the approaching Lunar New Year, officials say freight rates will continue to remain low.

That will come as bad news for shipping companies. “2015 does not seem like a good year for the sector, in terms of freight rates. Even if China reopens after their New Year, the pick-up in trade will remain moderate, not rosy,” said Anoop Sharma, chief executive (sea transportation business), Essar Shipping.

“This is the lowest level we have seen ever. Apart from falling commodity and crude oil prices, the drop in the index is because of too many ships on water,” said an executive at JM Baxi & Sons, a leading shipping agent.

The low freight rates aren’t allowing companies to even recover operating costs, say executives. “The situation is getting worse for shipping companies. Forget debt servicing; companies are unable to recover even operating costs. As of now, we don’t see any light at the end of the tunnel. If the situation prevails, we might see companies shut down,” said an executive of Link Shipping & Management System.

“Though a 3,500 index level is broadly seen as break even point, a lot also depends on the fleet utilisation (both for spot and long-term contracts) by shipping companies,” said an analyst with a domestic brokerage firm. “The more the contract renewals at this juncture, the adverse will be the situation for a shipping company, as contracts will be locked at much lower rates,” he added.

For instance, Shipping Corporation of India is in a difficult position, as two of its 17 bulk vessels have signed mid-term (three-month) and 15 spot contracts. Essar Shipping has a 50:50 break-up between the two segments, with long-term contracts varying between two and five years.

SECTORS TO BENEFIT

COAL (IMPORT)
  • India-South Africa route
  • Freight: To $15 per tonne from $10 per tonne
FERTILISER (IMPORT)
  • India-West Asia route (di-ammonium phosphate)
  • Freight: To $8 per tonne from $12 per tonne
GRAINS (EXPORT)
  • India-Iran route
  • ..........................http://www.business-standard.com/article/companies/baltic-index-on-crash-course-at-28-year-low-115021101238_1.html...........===============
THE FALLING CRUDE PRICES HELPS OPERATIONAL EFFICIENCY AND SAVING BUT THE SENTIMENT GOT HURT. MOSTLY INVESTORS SHALL OFF LOAD 50-60% AND REENTER AGAIN AT LOWER LEVELS....THE BOTTOM FISHING IS ONE WAY OF INVESTMENT MODEL FOR LONGTERM GAINS FOR NEXT 1-2 YRS SPAN.

THE HEALTH OF SHIPPING COMPANIES DUE TO LOW FREIGHT INDEX WENT FOR A TOSS.

Posted by BAMMIDI NAGESWARARAO at 2/12/2015 08:12:00 am 0 comments

Friday, January 30, 2015

BALLOONING NPAs- Govt banks' valuations!!!!

Opaque disclosures hurt govt banks' valuations

PSU banks have failed to cash in boom time despite desperate capital need
Manojit Saha  |  Mumbai  
 Last Updated at 00:50 IST

The fact that the markets are touching new highs has failed to bring cheer to public sector banks (PSBs). Most of these have seen their capital adequacy ratios being depleting through the past few years, with non-performing andrestructured assets ballooning, for which they have had to allocate capital by way of provisioning.

Though market conditions are conducive, most PSBs aren’t keen to tap the capital markets, primarily due to low valuations.

On Tuesday, the State Bank of India (SBI) board approved equity capital-raising of Rs 15,000 crore, though the bank hasn’t disclosed the timing of the fund-raising yet. The approval is valid for a year. (HEALTH CHECK)

The Bank Nifty, the benchmark banking index, has doubled in the past year, outperforming the overall indices. Some private banks have seen their valuations double. However, barring a few, most PSBs have failed to reap the benefits of the bull run.

Both chief executives of these banks, as well as the government, have cited low valuations as deterrence to tapping the capital markets. The Reserve Bank of India (RBI), too, said capital-raising by public sector banks other than through capital infusion by the government faced challenges because of the relatively low valuations of these entities, compared to their private peers.

Why are investors not buying the PSB story? The dismal financial health of these entities isn’t the only reason. Analysts say the opaque nature of discloses might well explain the lack of investor appetite.

“Public sector banks are in a vicious cycle — they need to raise capital, but they are trading at less than book values, which implies capital-raising will be book value-dilutive in nature,” says Saday Sinha, an analyst with Kotak Securities.

Market participants say banks are unable to provide consistent estimates of certain crucial parameters that reflect headwinds to earnings, such as slippages from restructured assets and restructuring asset pipeline.

For investors, slippages on the restructured assets front are a concern. These have risen sharply in the past two quarters and are out of sync with the projections of bank managements. Restructured asset pipelines, too, have often been at variance with estimates.

According to RBI data, stressed advances in the banking system increased to 10.7 per cent of total advances in September 2014 from 10 per cent in March 2014. “At 12.9 per cent of total advances in September last year, PSBs continued to record the highest level of stressed advances; private banks recorded 4.4 per cent,” RBI said in its latest Financial Stability Report.

And, worries related to non-performing assets (NPAs) are far from over. “As far as NPAs are concerned, these banks are still not out of the woods. There could be some front-loading of restructuring assets during the fourth quarter, as the regulatory forbearance they enjoy won’t be there from April 1, 2015,” Sinha said.

RBI has mandated banks have to make provisioning for restructured assets in line with sub-standard assets — 15 per cent compared with the current five per cent.

According to RBI, Indian banks are expected to remain under pressure on account of additional requirements towards capital conservation buffers, countercyclical capital buffers and supervisory capital.

In addition, delay in appointments to senior management posts has hampered decision-making at PSBs. While the government appointed the chief executives of four banks last month, the top positions at four others, including Punjab National Bank, Canara Bank and Bank of Baroda, remain vacant.

“When a bank is going to investors for raising equity, the absence of a chief executive sends a wrong signal,” said a senior official at a PSB.

 http://www.business-standard.com/article/opinion/opaque-disclosures-hurt-govt-banks-valuations-115012900150_1.html
Posted by BAMMIDI NAGESWARARAO at 1/30/2015 06:42:00 pm 0 comments

PSU STORY OF OFFERS AND PRICE TUMBLES...!!!

MUMBAI, JANUARY 29:  




Will Coal India’s offer-for-sale on Friday receive strong response from retail investors?. Expectations are high after, the previous offer-for-sale (OFS) by SAIL last December met with overwhelming response, with the portion reserved for retail investors subscribed 2.5 times.
However, the track record of individual stock performance once the OFS is complete is more varied. Of the 14 OFS made since the first one March 2012, eight are now trading above their floor prices.
SAIL – at Thursday’s closing of Rs. 78.60, is above its March 2013 allotment price of Rs. 63 but well below last December’s second OFS price of Rs. 83.
MMTC, NTPC and NMDC have fallen below their floor prices. Hindustan Copper closed on Thursday atRs. 70, its floor price for its July 2013 OFS but a far cry from the one just eight months prior (in November 2012) at Rs. 155.
Thanks to overall rally in the market, PSU stocks have also started looking up. Even the ones that have moved up had, till recently, been reeling under pressure of an overall downturn in PSU stocks.
The BSE PSU Index, in fact is currently ruling at 8,344, far from its all-time high of 11,205.38, registered in 2008.
Most offers-for-sale, despite discount, had attracted only a lukewarm response from retail investors. According to analysts, lack of knowledge on how to apply through exchanges was also one of the major reasons for poor response. Addressing the issue, SEBI recently tweaked the rule, saying investors can put in their at a cut-off price (in addition to placing bid price) for shares sold through the OFS route.
(This article was published on January 29, 2015)
http://www.thehindubusinessline.com/news/will-the-sale-garner-a-
strong-retail-response/article6835391.ece
Posted by BAMMIDI NAGESWARARAO at 1/30/2015 06:32:00 pm 0 comments

Tuesday, January 27, 2015

RALLY SUPPORTED BY FINANCIALS...!!!

Financials contribute 50% of over 2,000 point Sensex rally in eight days

HDFC, ICICI Bank, HDFC Bank, Axis Bank and SBI have collectively contributed 1,201 points of 2,224 points Sensex rally.
Deepak Korgaonkar & Puneet Wadhwa  |  Mumbai / New Delhi  
 Last Updated at 17:20 IST

Financial stocks have contributed more than half of the benchmark index, the S&P BSE Sensex, over 2,000 points rally in past eight trading sessions. Five stocks – Housing Development Finance Corporation (HDFC), ICICI Bank, HDFCBank, Axis Bank and State Bank of India (SBI) – have collectively contributed 1,201 points rise in benchmark index since January 15, data suggests.

The S&P BSE Sensex that closed to 29,571 on Tuesday has rallied 2,224 points or 8.13% in past eight trading sessions from 27,347 on January 14. The benchmark index scale new high of 29,619 during intra-day on Tuesday.

Between January 15 and January 23, in seven trading days,FIIs have pumped in Rs 9,226 crore in the equity markets. The total investor wealth increased by Rs 5.33 lakh crore during the period. Measured in terms of total market capitalisation of all listed companies on the BSE, the overall investor wealth in the Indian stock market rose to Rs 104.11 lakh crore on Tuesday as compared to Rs 98.78 lakh crore as on January 14, 2015.

“Private sector banks have been steady financial performers. As a result, investors have been preferring the private sector banks to their public sector counterparts. Secondly, the rate cut that got announced recently is still having a positive impact on these stocks. Thirdly, most of these banks have subsidiaries in the form of insurance companies and broking arms. There is a possibility that there is some value unlocking in case they get FDI (foreign direct investment) in insurance. This is one trigger waiting to happen in some of these companies,” said K Subramanyam, assistant vice-president (institutional research), Asit C. Mehta Securities.

HDFC twins shine

HDFC, the country's largest mortgage financier company, the largest contributor among 30 share index, have contributed 363 points in total index gain.  ICICI Bank has contributed 320 points, followed by HDFC Bank (247 points), Axis Bank (181 points) and SBI (91 points).

Larsen and Toubro (217 points), Tata Motors (179 points) and Reliance Industries (106 points) are from non-financials contributed more than 100 points each in Sensex rally. Sun Pharmaceutical Industries, Bharti Airtel and ITC have contributed between 75-90 points during the period.

Since January 15, the market price of HDFC, ICICI Bank, HDFC Bank, Axis Bank and SBI market price have appreciated between 8-18% after the Reserve Bank of India (RBI) Governor Raghuram Rajan unexpectedly cut the benchmark repurchase rate by 25 basis points to 7.75% from 8%.

Axis Bank, which recently announced its December quarter results impressed the Street on most parameters. As against analysts' expectations of around Rs 1,100 crore additional restructured assets, the bank added a mere Rs 132 crore due to reduced stress in the mid-corporate segment, a pressure point for some time, reports suggest.

“Axis Bank’s pre-provisions profitability continues to be one of the strongest among banks. Further, falling bond yields will continue to provide additional tailwind to earnings. Capital remains comfortable to take advantage of growth opportunities. Maintain outperform rating,” Ashish Gupta, Prashant Kumar and Kush Shah of Credit Suisse said in a post results note.

In the short – term, analysts say, banking stocks may appear stretched but a deep correction in them doesn’t look likely.

“I think most of these stocks will be bought into till the Budget in February and there could be a possible correction post that. I suggest partial profit booking in these counters,” Subramanyam adds.

 http://www.business-standard.com/article/markets/financials-contributes-50-of-over-2-000-points-sensex-rally-in-eight-days-115012700789_1.html

Posted by BAMMIDI NAGESWARARAO at 1/27/2015 08:03:00 pm 0 comments
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