Sensex

Thursday, February 14, 2008

DG - Promoters join the party for bottom fishing

NEW DELHI: It’s not just the portfolio investors who were bottom-fishing in the market. Promoters of a bunch of mid and small-cap firms have taken advantage of the market meltdown to buy shares of their own companies from the open market through the creeping acquisition route.
Some companies whose promoter groups have bought shares in the last fortnight when the market crashed include NIIT, Maharashtra Seamless, Gujarat NRE Coke, Uflex, KRBL, Hitech Gear, Birla VXL and Jyoti Structures, among others.
Promoters raise their equity stake for various reasons. Typically for shoring up equity holding or infusing funds into the company, the owners go for preferential allotment of shares or convertible instruments such as warrants.
The creeping acquisition route of buying shares, for which there is a mandatory ceiling in a particular year, entails buying shares from the secondary market is typically done when promoters feel the price in the market is low enough to justify such a purchase. Some firms with healthy cash reserves even go for equity buybacks which in turn tends to increase promoter holding while repricing undervalued stock.
According to stock market disclosures the firms have bought shares of varying proportions in the open market. For instance, one of the promoter group entity of NIIT bought 0.27% stake from the market. The transaction was done at a price 15-20% cheaper than its recent highs.
While the quantum of purchase was not too significant, it comes at a time when promoter holding in the IT solutions firm had been coming down over time. Promoter group holdings slipped from more than 40% in December 2005 to just about 30.14% on December 31, 2007.
Nor was this one off case. Promoters of Gujarat NRE Coke also inched up their holdings by a similar proportion(0.25%). In their case also the promoters holding had come down over the last one year from 46% in December 2006 to 41% in December 2007.
For others its been a mixed picture. For instance, in case of basmati rice company KRBL, one of the promoter group entities has been buying and selling shares of KRBL at the fag end of 2007. However, the firm started buying shares consistently since January 30 and, as of today, has added 0.7% stake over 10 days.
Maharashtra Seamless promoters have added 1.42% stake last week through open market purchases. The transactions come at a time when the company is mulling a preferential allotment of warrants to the promoters.
Incidentally, the proposal for the stock split which was mooted last year and was to be implemented soon, has been postponed as is the EGM for approving the allotment of warrants to the promoters. This is not surprising, given that the scrip has dropped about 50% in value over the last one month.
Among others KS Oils promoter Ramesh Chand Garg increased his stake in the edible oil company by 1.71% since January 21, the day the market took the first big hit. Another company where the promoter bought 0.33% stake is Uflex (formerly Flex Industries).

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DG - FW: Sharekhan Post-Market Report dated February 14, 2008

 

 

From: The Sharekhan Research Team [mailto:marketwatch@research.sharekhan.com]
Sent: 14 February 2008 19:21
To: The Sharekhan Research Team
Subject: Sharekhan Post-Market Report dated February 14, 2008

 

 

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February 14, 2008

 

Index Performance

Index

Sensex

Nifty

Open

17,265.19

4,944.65

High

17,838.08

5,220.25

Low

17,265.19

4,944.65

Today's Cls

17,766.63

5,202.00

Prev Cls

16,949.14

4,929.45

Change

817.49

272.55

% Change

4.82

5.53

 

Market Indicators

Top Movers (Group A)

Company

Price 
(Rs)

%
chg

Gainers

Power Finance

184.75

22.51

IndusInd Bank

104.45

16.38

HPCL

297.60

14.81

Syndicate Bank

96.95

13.92

Indian Oil Corporation

536.75

13.83

Losers

United Phosphorus

311.40

-2.69

Ipca Lab

600.00

-1.72

BEML

1,233.15

-0.58

Nirma

184.75

-0.46

Concor

1,717.30

-0.19

Market Statistics

-

BSE

NSE

Advances

2,057

1,075

Declines

697

124

Unchanged

41

10

Volume(Nos)

34.38cr

54.92cr

 Market Commentary 

Sensex rallies on buoyant overseas markets

Positive global cues and buoyancy in realty, power, oil and capital goods stocks saw the Sensex end with a gain of 817 points.

The market held firm above the 17,450 level for almost the entire trading session, as strong US and Asian markets created a perfect platform for investors.  

 

After registering a gain of 341 points yesterday, the market resumed with a huge positive gap of 316 points at 17,265. The Sensex quickly moved up on sustained buying in realty, power, oil and capital goods stocks and the index touched the day's high of 17,838 towards the close. The Sensex finally ended the session at 17,767, up 817 points. The broad-based Nifty ended the session at 5,202, up 273 points.

Movers & Shakers

  • Orchid Chemicals surged on receiving USFDA nod for Granisetron generic formulation.
  • Punj Lloyd jumped after the group received a $400 million (Rs1,119.2 crore) project from Marina Bay Sands Pte Ltd, Singapore.
  • Gail moved up on signing a MoU with ITERA Oil & Gas Company of Russia.
  • Steel Strips Wheels gained on receiving another export order for steel wheel rims from PSA Peugeot Citroen, Europe's number two automotive manufacturer.


Among the sectoral indices, the power index led the upsurge on the Bombay Stock Exchange (BSE) with gains of 8.14% at 3,729 followed by the BSE Realty index (up 7.58% at 10,144), the BSE PSU index (up 7.55% at 8,352), the BSE CG index (up 7.53% at 16,282) and the BSE Oil & Gas index (up 7.42% at 10,932). The market breadth was extremely positive. Of the 2,795 stocks traded on the BSE, 2,057 stocks advanced, 697 stocks declined and 41 stocks ended unchanged.

Out of the 30 Sensex stocks, 29 managed to end in the green. BHEL was the leading gainer and soared 12.63% at Rs2,232. Reliance Energy jumped 9.63% at Rs1,708, Reliance Communications shot up by 9.26% at Rs610, Hindalco advanced 9.20% at Rs164, ONGC moved up by 8.66% at Rs1,026, L&T added 7.03% at Rs3,507 and NTPC gained 6.84% at Rs201. However, Infosys slipped marginally at Rs1,547. 

Over 2.67 crore Reliance Natural Resources shares changed hands on the BSE followed by Jaiprakash Associates (1.86 crore shares), Reliance Petroleum ( 1.46 crore shares), Ispat Industries ( 1.13 crore shares) and Nagarjuna Fertilisers (1.05 crore shares).

Jaiprakash Associates registered a turnover of Rs501 crore on the BSE followed by RNRL (Rs339 crore), Reliance Power (Rs303 crore), Reliance Capital (Rs237 crore) and Reliance Petroleum (Rs230 crore). 

European Indices at 16:15 IST on 14-02-2008

Index

Level

Change (pts)

Change (%)

FTSE 100

5892.20

12.10

0.21

CAC 40 Index

4888.66

33.26

0.69

Dax Index

6990.51

16.84

0.24

Asian Indices at close on 14-02-2008

Index

Level

Change (pts)

Change (%)

Nikkei

13626.45

558.15

4.27

Hang Seng

24021.68

852.13

3.68

Kospi Index

1697.45

65.67

4.02

Straits Times

3045.59

96.05

3.26

Jakarta Composite

2675.65

64.86

2.48

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