Market Buzz, Gossips

[rajeshn2007]

BSE shares change hands via off-mkt deals.

A SIZEABLE number of Bombay Stock Exchange (BSE) shares are understood to be changing hands through offmarket deals, even as the shareholders keenly await the listing of the Asias oldest stock exchange. Shares are being quoted at Rs 270-280, much lower than their price at the time of demutualisation.

Last year, BSE had offered 12:1 bonus to shareholders, subsequent to which the shares were available at ex-bonus price of around Rs 430. The exchange has diluted 51% of its equity in favour of a clutch of local and foreign investors. Overseas buyers include SGX and Deutsche Boerse, which had picked up equity at Rs 5,200 per share (cum bonus), valuing the exchange roughly at $1 billion then.

The off-market deals in BSEs shares are said to be mostly between broker shareholders, who have been impatiently waiting for the bourse to get listed.

 

[rajeshn2007]

THE stock price of K Sera Sera has gained close to 35% in the past one month alone. The buzz is that the company is betting big on some of its new releases that are in the pipeline. It has made an investment of close to Rs 100 crore in about 10 movies, out of which two will be released shortly. Some of its past blockbusters include Guru, Partner and Sarkar, among others.

The stock, trading at its 52-week high, closed at Rs 21, down almost 2% from its previous close on huge volumes. Brokers say the firm is also planning to set up a chain of smaller version of multiplexes (having lower seating capacity) in tier-II cities in the next few months. The expansion would be part-funded with the money it recently raised in the GDR market.

 

[rajeshn2007]

THERES a selective buying in Zylog Systems shares, following a buzz that the Chennai-based company has completed its Wi-Fi pilot project. It is expected to put in place about 4000 Wi5-enabled nodes against 250 currently installed in Chennai, within a year to make its entry in the ISP business. It has obtained a category-A internet service provider licence to operate in all DoT circles.

Similar Wi-Fi services will be made available in Bengaluru, Delhi, Mumbai, Hyderabad and Kolkata. The stock closed at Rs 343, down almost 1.9% from its previous close, after gaining close to 5% in the past one month. The company may also lease its infrastructure and expand overseas, after complete services rollouts.

 

[rajeshn2007]

Top operators set to have built up sizeable positions in the stock of Walchandnagar Industries. This counter was out of action in recent weeks.

 

[rajeshn2007]

Grey market premium seen losing sheen.

THE grey market premium of a company that is about to be listed is fast losing importance among experienced traders and investors as a parameter to determine the listing price of a stock. This is because the disconnect between the listing price of all the recent public issues and their premiums in the unofficial grey market.

While market conditions on the debut day have a major impact on the listing price, brokers said increased management of the grey market premium by companies and the public issues investment bankers has resulted in this premium ceasing to project the real picture.

 

[rajeshn2007]

APTECH shares were among the biggest losers on Tuesday, falling over 17% to close at Rs 211.65. Market talk is that the retail broking arm of a private sector bank offloaded a sizeable position of its client(s) positions owing to margin commitments not being met.

Many bulls had loaded up on the stock in the past few weeks on talk that Aptechs China subsidiary would go public shortly, at a fantastic valuation. But with market sentiment having changed for the worse, dealers tracking the Aptech counter says there is uncertainty over the Chinese arms valuations, and that it may not be as high as was initially expected. This appears to have sparked a stampede among the bulls at the counter, leading to the slide in the stock price.

 

[rajeshn2007]

Sesa Goa tumbles 12% on SFIO inquiry reports
SHARES of Indias biggest iron-ore exporter, Sesa Goa fell over 12% to close at Rs 276.35 on Tuesday after media reported that the Serious Fraud Investigation Office (SFIO) has initiated an inquiry into the accounts of the company. With Tuesdays fall, the stock is down 24% from its 52-week high of Rs 362 touched last week.

Dealers tracking the counter say weak second quarter numbers had undermined sentiment for the stock, and the corporate governance issue could not have come at a worse time for the bulls. They say unwinding of leveraged positions could put further pressure on the stock near term. On its part the company in a statement to the exchanges said that it has not received any communication or notification from the SFIO on this and that it is not in a position to comment on such statements in the media.

 

[rajeshn2007]

APTECH shares were among the biggest losers on Tuesday, falling over 17% to close at Rs 211.65. Market talk is that the retail broking arm of a private sector bank offloaded a sizeable position of its client(s) positions owing to margin commitments not being met.

Many bulls had loaded up on the stock in the past few weeks on talk that Aptechs China subsidiary would go public shortly, at a fantastic valuation. But with market sentiment having changed for the worse, dealers tracking the Aptech counter says there is uncertainty over the Chinese arms valuations, and that it may not be as high as was initially expected. This appears to have sparked a stampede among the bulls at the counter, leading to the slide in the stock price.

was down today too... after news was flashed in cnbc.

 

[rajeshn2007]

DESPITE posting poor numbers for the September quarter, shares of Jet Airways were in demand on Wednesday. The stock was the best performer in the A group, rising 9% to close at Rs 398, supported by heavy volumes. In the last one month, the stock has gained around 22%. Players tracking the counter say that earnings for the current quarter are expected to be good because of the vacation season.

Also, most of the negatives are already reflecting in the current price, they say. Buzz is that one of the domestic mutual funds, which already has a stake in the company, has been adding to its position over the past few sessions. In addition, a South-based mutual fund too has begun accumulating the stock.

The company is awaiting approval the FIPB to raise up to $400 million through an equity offering to domestic and foreign investors.

 

[rajeshn2007]

HOW effective are Sebi orders banning individuals and entities from trading in the stock markets as a penalty for manipulative practices? If Dalal Street veterans are to be believed, such curbs matter little as the debarred players can easily work their way around. As surveillance officials in regulatory bodies (including stock exchanges) admit, enforcing the ban is far more difficult than handing out the punishment.

Float a private limited company, appoint some relative or close acquaintance as a director, and invest through this firm without drawing attention to yourself, said a market old-timer while talking on the modus operandi of players who have fallen foul of the regulator.

The more sophisticated players transfer their money out of the country, through hawala or some other convenient route, and deposit it with a friendly foreign bank. The bank then routes this money to a tax haven-registered sub-account of a foreign institutional investor (FII), with instructions to invest that money in specific stocks in India.

Back home, there are any number of brokers willing to execute trades on behalf of debarred players, as long as the margin commitments are met and brokerage commissions paid. In June this year, Sebi stumbled upon evidence showing that scam-tainted broker Ketan Parekh banned by the regulator from the stock market for 14 years in 2003 has been trading in shares using certain entities as fronts.

Another such market player, banned from trading in shares of Atlanta in 2007, is said to established himself as a specialist in rigging mid-cap stocks, often in collusion with the management. Brokers says he was the kingpin of the bull cartel that ramped up the stock price of realty firm Akruti from Rs 800 to Rs 2,200 during February-March this year.

Operators who trade on a big scale have tie-ups with a dozen odd brokerages. At each of these brokerages, there is a set of clients, which act as fronts for this operator. This way, there is little concentration of volumes at any single brokerage house, or in the account of any one client.