Backwardation in Nifty futures
Mumbai: S&P CNX Nifty - remaining in a narrow range of 1016.90-1007.65 points, turnover at the derivative segment slipped on Tuesday; turnover dipped to about Rs 2,346 crore as against Monday's figure of about Rs 2,700 crore. The near-month June contracts were active with 14,283 contracts being traded. The June contract closed the day at 1003.95 as against Monday's close of 1009.20. Open interest improved by over six per cent to 10404 contracts. The July contracts closed at 1003.45 (1009.15) and open interest jumped by over 40 per cent to 874 contracts. Backwardation is still seen on index futures as both these contracts maintained the sharp discount with Nifty spot, which ended the day at 1010.65 (1015.15). A market is considered to be in backwardation when the cash price exceeds the future price or a nearby futures price is greater than a more distant futures price. The unmatched order buy/sell order book also suggests more traders were willing to go long on index futures as buy side order overwhelmed the sell side.
Back to News Review index page  

HDFC hardens; hits intra-day high again
Kochi: Shares of housing finance major HDFC has been gaining strength on the bourses with the stock hitting an intra-day high second day in a row. The share, however, came off its high — Rs 390.40 — and ended the day firm at Rs 381.60 on the BSE, up 1.90 per cent with around 2.04 lakh shares traded. On the NSE, the stock ended the day at Rs 378 up 1.52 per cent with around 4.12 lakh shares changing hands. Says market analyst The stock had been beaten down in the past over concerns about its group company HDFC Bank eating into HDFC's earnings. This apart, some FII selling in the market has also put pressure on the stock price. Last week, Warburg Pincus, a strategic investor had offloaded 2.6 per cent stake in the housing finance major for Rs 230 crore. Wraburg now holds 6.2 per cent skate in the company. According to market rumours, the US-based Alpine International sold 2.58 per cent of its stake to a foreign investor on Tuesday. However, market participants maintain that with a PE of 11, which is lower than its net profit growth of 20 per cent, the stock makes for attractive valuation. "The business growth is there. And given the volatility in other sectors it is a safe stock to hold," a broker said. Total foreign shareholding including GDRs, is 5,42,92,905 equity shares representing 22.21 per cent of the equity capital.
Back to News Review index page  

Bank stocks post mild recovery on bourses
Mumbai: Even as the uncertainty over the issue of paying premium on the equity being returned by public sector banks continued to persist with the union finance secretary, S. Narayan, reiterating his earlier statement, banking stocks made a mild recovery on the bourses on Tuesday. "We have already clarified in a statement on Saturday that no decision has been made as yet on the issue of whether the Government will charge a premium on the equity proposed to be returned by some banks. If the markets were active on the presumption that the Government is not going to charge a premium on the equity being returned, then we have just clarified that no decision has been made on the issue," Narayan told presspersons here. He was speaking at the sidelines of a meeting at the SEBI office to review the performance of UTI II. The finance secretary's comment, however, seemed to have eased the pressure at banking counters with most stocks ending in the positive note after being battered on the bourses following Saturday's statement.
Back to News Review index page  

IOC on buy list ahead of results
New Delhi: Another petroleum company that is being accumulated by market players is Indian Oil Corporation (IOC). Dealers said after the good financial results from most of the oil companies, market players are optimistic about the good financial performance for the last quarter by IOC. The talk is that the company is likely to report Earning Per Share (EPS) of around Rs 90 for the year 2002-03. The oil major has already reported EPS of Rs 50.28 in the first three quarters. In addition, the market is also expecting a good dividend pay-out from the company. As per the estimates, the dividend for the full year would be around Rs 27 per share (that is 270 per cent) and out of this Rs 5 per share has already been paid as interim dividend. Dealers said several FIIs are also buying the shares of IOC, as the current price-earning ratio is around 4, based on the 02-03 results. In comparison, HPCL and BPCL are quoting at P/E ratio of around 6.5. On Tuesday, the stock of IOC closed at Rs 367.50, down by 1.2 per cent with a volume of 1.73 lakh shares on the BSE and the NSE it was Rs 370.15, down 0.67 per cent ( 3.71 lakh shares).
Back to News Review index page  

Ray Ban gains on speculation
Mumbai: Even before the final order from the Securities Appellate Tribunal (SAT) is announced on Ray Ban Sunoptics, market players have started speculating on the stock. The talk is that the SAT is expected to announce the order shortly. Most of the players are optimistic that the tribunal will ask the parent of the company — Luxoticca — to make an open offer. The talk is that the offer would be around Rs 100 (excluding interest). The current dispute among the market players is on the issue of interest. On these hopes there was active buying in the counter on Tuesday. The stock gained 11.31 per cent at Rs 51.60 with volume of 1.31 lakh shares.
Back to News Review index page  

Federal Bank up on takeover talk
Mumbai: At a time when the market attention is on PSU banks, a section of the market has quietly accumulated the stock of the South-based private sector Federal Bank. In just over a month's time, the stock has gained 50 per cent, mainly on the expectation of the bank is on the takeover list from another bank. Even though this has been talked for long, this time some players said that it was likely to happen as the Government has freed on the voting rights in banks. On Tuesday, the stock gained 1.55 per cent at Rs 150.95 on the BSE with a volume of 3.40 lakh shares on the BSE. On the NSE, it closed at Rs 150.25, down 0.23 per cent with a volume of 12.30 lakh shares.
Back to News Review index page  

SEBI puts onus on AMC chief for MF risk management
New Delhi: In a significant decision, the Securities and Exchange Board of India (SEBI) has ruled that the Chief Executive Officer (CEO) of an asset management company (AMC) would be responsible for the overall risk management function of the mutual fund.

The Indian mutual funds industry has more than Rs 1,00,000 crore of assets under management. Besides ensuring that the mutual fund complies with all provisions of the mutual fund regulations, guidelines and circulars issued by the SEBI, the CEO of an AMC would also need to make sure that the investments made by the fund managers are in the interest of the unit holders. Sources said the capital markets regulator has also amended the SEBI regulations on mutual funds to stipulate that the fund managers (whatever the designation may be) should ensure that the funds of the schemes are invested to achieve the objectives of the scheme and in the interest of the unit holders.
Back to News Review index page  

Rupee up 18 paise; gilts rally
Mumbai: The rupee gained 18 paise on Tuesday. Dollars flooded the markets as the month-end demand for greenbacks from corporates cooled. The rupee ended the day at a high of 46.94/95 against the dollar. On Monday, the domestic currency closed at 47.12/13. Internationally, the rise of the euro against the dollar over the past few months has seen sudden aberrations following George W. Bush's voicing of a `strong dollar policy' at the recent G-8 summit in Evian, France. Dealers here are betting on a definite appreciation of the rupee to as high as 46.50 in its value against the dollar in three months time. The rupee had taken a sharp fall to as low as 47.25 on Monday. Both six months and one-year forward closed lower as exporters were seen selling forward contracts heavily in the absence of any demand for it. The six-month forward closed at 1.55 per cent (1.71 per cent) and the one-year closed at 1.56 per cent (1.73 per cent).
Back to News Review index page