Posts Tagged ‘FIIs’

CIL sets IPO record; to list on Nov 4

India’s IPO market created history on Thursday with state-owned Coal India share issuer in the becoming the biggest country, beating Reliance Power’s 2008 initial public offering.

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At the time of going to press, the CIL issue was subscribed 15.26 times, collecting Rs 2,36,113.28 crore. The shares will debut on the market on November 4, a day before Muhurat trading that marks Diwali.

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Responding to late rush from retail investors, the company postponed the close of the issue to 9 pm.

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At the upper end of the band, CIL will be the seventh biggest Indian company by market cap, after ONGC, State Bank of India, TCS, Reliance Industries, Infosys Technologies and NTPC, based on Thursday’s closing price. CIL’s Rs 15,474 crore IPO has overtaken Reliance Power’s Rs 11,700 crore issue.

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Buoyant demand from retail and wealthy investors on the final day added to the strong response from institutional buyers. This also signalled success for the government’s upcoming share sales.

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Retail investors, who often take cues from institutions in IPOs, had put in bids for shares 1.44 times or for 28,60,44,375 shares. Retail investors will get a five per cent discount on the final issue price.

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Wealthy individuals had separately bid for 13.89 times the shares available for them.

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Bidding for the mega IPO closed on Wednesday for qualified institutional buyers, including foreign institutional investors, mutual funds and insurance firms. And for the portion reserved for them, the issue was over subscribed by 24.70 times, lead by FIIs.

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The IPO has generated a demand of 493,38,72,050 shares from FIIs. Calculated at the upper end of the price band, this demand is worth Rs 1,20,879.86 crore and at the lower end worth Rs 1,11,012.12 crore. Even at the low end, the demand surpasses the record Rs 1.08 lakh crore pumped in by FIIs into the capital
market.

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India’s largest new issue came amid a flurry of big deals in Asia.

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At the top of its price range, Coal India would be valued at 15.7 times trailing earnings. The issue also got the highest demand for an Indian issue, helped by qualified institutional buyers.

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The demand from QIBs for CIL was at Rs 1,73,398 crore with 100 per cent application amount, compared with Rs 1,88,923 crore with 10 per cent margin for Reliance Power IPO. In case of Reliance Power, the QIB portion was covered 30.68 times.

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“The response to Coal India IPO, from all classes of investors, has surpassed even the most optimistic predictions. It has caught even the biggest optimists by surprise,” SMC Global Securities strategist Jagannadham Thunuguntla said in a note.

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He said the response puts the government on target to achieve its divestment target of Rs 40,000 crore in fiscal 2011 and even exceed it if other issues like the follow-on offering of Power Grid, Steel Authority of India, ONGC, Shipping Corporation of India, Indian Oil Corporation and IPO of Manganese Ore fall in place.

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The government, which has collected Rs 17,500 crore from public issues, including Coal India, may raise its divestment target and get over Rs 58,500 crore, SMC Capital added.

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At the upper end of price range, Coal India issue is worth Rs 15,474 crore and at the lower end it would fetch about Rs 14,211.81 crore.

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The upper band would also give it a market capitalisation of Rs 1.54 lakh crore ($34.7 billion).

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Meanwhile, the broader market recovered from a two-day slump and closed up 1.95 per cent at 20,260.58 points. Now all eyes will be on whether it will be a strong listing on the eve of Diwali.

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Weekly Update 15th – 19th March

Here’s the weekly update again 🙂

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Its weekly overview of the Indian as well as of the Global economy.



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Despite volatility throughout the week, Indian market posted fifth consecutive weekly gains, the biggest stretch of weekly gains since June 2009, but closed flat on Friday erasing early gains as traders booked profits in selected stocks due to lack of triggers from global markets and as in line January IIP failed to lift sentiments of the market participants.

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On the contrary, though the broader index, Nifty closed in green but there was selling in mid cap and Small cap stocks as evident from the fact that BSE Midcap Index was down -0.51 per cent and BSE Small cap Index moved -0.79 per cent lower.

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On the Global Markets front; except Shanghai Comp., all the Asian markets closed in green.  🙂  European markets too closed in the positive terrain led by banking stocks.

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Both FTSE 100 and CAC 40 were up by 0.47 per cent and 0.42 per cent respectively. 🙂

Even mixed economic reports held the US stock market to only modest moves on Friday but gains for the week were strong.

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Uneven figures on retail sales and consumer confidence gave investors little new insight into the economy. If we talk about Indian economy, some concerns pertaining to further tightening in monetary policy after a partial withdrawal of fiscal stimulus in the budget have emerged in the light of robust manufacturing activity as indicated by IIP numbers.

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A sustained recovery in India’s industrial output which stood at 16.7% in January on a YoY basis as against 17.6% YoY growth recorded in the month of December and ballooning inflation is expected to force RBI to hike policy rates in its monetary policy review on 20’Th April.

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The food price index rose 17.81% in the 12 months to 27 February 2010, while the fuel price index was up 11.38%.

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FIIs net investment in Indian equity markets has crossed $75 billion mark. So far in calendar year 2010, FIIs have made net investments of $2.5 billion, of which $2.3 billion net flow made in last eight trading days since Union Budget 2010 held on February 26, reflecting the strong economic fundamentals of Indian economy, as well as confidence of the foreign investors in the growth and stability of the Indian market.

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For the forth coming weeks, advance tax payment by the major corporate will give an indication of fourth quarter earnings & would help market to take further direction in the coming week.

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Overall trend of world markets is up. The fall in the dollar index and rise in Euro from lower levels is giving support to stock markets.

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Nifty has support between 5030-4950 and Sensex between 16700-16400 levels. The coming week will give more clarity after the FOMC meet.

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As the rally after the budget had been swift and markets had a five week continuous rally, it seems that our markets are more in a consolidation mode before they take their next direction.

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Right now, investors are mostly following the “Wait & Watch” strategy and refraining to build heavy position at the time when market is expecting mixed outcome of economic releases and dollar index is oscillating between ranges.

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Market is waiting for clear direction. Recent downtrend in LME stocks is offset by still-slow pace of demand recovery, and we expect a range trading in base metals complex with downside bias.

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News that China has started work on its second phase of state strategic oil reserves in the southern province of Guangdong, is limiting the downside in crude oil prices.

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However, cautious trading is advised here as it appears overbought.

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Stay Tuned for More updates

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Note : For More Latest Industry, Stock Market and Economy News and Updates, please click here

Govt Not to Impose Restrictions on Foreign Borrowings

Govt Not to Impose Restrictions on Foreign Borrowings

 

The government ruled out limiting companies from borrowing money from overseas market stating that the rise in foreign money is not a matter of concern at present and there is no such proposal.

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However, companies are permitted to raise $500 million annually under the automatic route while infrastructure firms under the approval route can remit up to $100 million for rupee expenditure and for other companies the cap on approval route remittance is set at $50 million.

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Meanwhile, capital inflows reached record levels as investors borrow cheap from advanced countries and invest in high-yielding assets in developing countries while this led to speculations that government may put in place a system of auctioning ECBs.

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In India, foreign inflows through foreign institutional investors (FIIs), ECBs and foreign currency convertible bonds (FCCBs) have been on the rise, while FDI is not picking up as fast.

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On the other hand, on a quarterly basis, the funds raised through ECBs and FCCBs increased by 70% in the September quarter to $4.61 billion while FIIs have put in a record over Rs 71,900 crore in the equities market.

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Market to Go Volatile This Week, Due to Host of Factors

Market to Go Volatile This Week, Due to Host of Factors

The Market is likely to remain volatile this week as a host of triggers are set to guide investor sentiments. These factors are :

1. Expiry of the October series of derivatives contracts,

2. September quarter results of some key companies such as Reliance Industries and

3. the RBI money policy review.

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Global cues may also induce some choppiness in the market.

Noted Market analyst, Jagannadham Thunuguntla, head of equities at SMC Capital quoted that;

“The market is facing heavy pressure.  There a wide gap between fundamentals and stock valuations.  The second quarter results have come up less than what most investors had anticipated”.

He also added “though the average profits of companies, which have so far reported second quarter results, have grown 30-40 per cent on cost-cutting measures, growth in net sales has been sluggish“.

Also Thunuguntla said that “we have huge liquidity in the market thanks to the 100 per cent rally and this has helped the market sustain at this level till now. No doubt, fundamentals are catching up with valuations slowly”.

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Thunuguntla said the market was in a consolidation phase.

“It may remain volatile this week ahead of the expiry of near-month futures and options contracts and the RBI policy review.”

On the global front, the US will disclose its third quarter GDP figures on Thursday.

Meanwhile, the rate of inflation jumped to 1.21 per cent for the week ended October 10 against 0.92 per cent a week ago.

The BSE Sensex slipped 512.01 points, or 2.96 per cent, last week to close at 16,810.81.01.

The Nifty index on the NSE dipped 145.10 points, or 2.82 per cent, to end the week at 4,997.05.

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According to other observers, Nifty has a support at 4,900.
Market sentiment may get hurt if this level is breached.

Thunuguntla also said investors would keenly follow the quarterly results of Reliance Industries as well as global cues.

“Amid the fight between the Ambani brothers, investors will watch the RIL results keenly.  Global cues will also be followed after a few bad economic numbers from the US last week,” he said.

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Foreign institutional investors (FIIs) on Friday remained net sellers, offloading equities worth Rs 295.70 crore, according to figures available at the website of market regulator Sebi.

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Dalal Street Investors Hoping for Diwali Cracker ;)

Dalal Street Investors Hoping for Diwali Cracker

Dalal Street Investors Hoping for Diwali Cracker

September, for Dalal Street investors, was an unusually good month, raising hopes of a better Diwali in October after two consecutive years of subdued celebrations.

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During the month, sensex gained in 14 of the 20 session and added 1,461 points, or 9.3%, to 17,127.

Brokers and dealers admitted that much of these gains came on the back of liquidity, the inflow of money from abroad.

BSE data showed that so far this month net buying by FIIs in the secondary market alone was at a whopping Rs 18,200 crore, nearly $4 billion.

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On last Wednesday of september alone, FIIs net bought stocks worth over Rs 1,000 crore.

Sebi data showed net FII buying in 2009 at $12.2 billion, the second highest yearly inflow ever for the Indian market.

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However, going forward there could be some correction, market participants feel.

October is a short month, and one would be wary of the latest move in the index, which has been very fast.

Based on cues from the US, one would not be surprised to see a correction of about 10%, to say 4,600 nifty by end of October, which is healthy in our view, experts said.

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On last Wednesday of september, Nifty ended at 5,084.

With the Bharti Airtel-MTN deal off and the US markets showing weakness in early trades, the market could witness some correction in coming days.

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Coming ‘Diwali’ – Gold Prices Set to Reach Over, Rs 16,000 level :)

Gold prices are again ready for a good rally and is likely to reach over Rs 16,000 level before 'Diwali'.

Gold prices are again ready for a good rally and is likely to reach over Rs 16,000 level before 'Diwali'.

After taking a brief consolidation, gold prices are again ready for a good rally and is likely to reach over Rs 16,000 level before ‘Diwali’.

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According to experts, gold prices have declined for a short period last week as the precious metal dipped following a counter rally taken by the dollar.

However, the US dollar index has again started showing weakness and today dipped by 0.6 per cent at 76.54 level, which will be positive for the gold price, SMC Global’s Rajesh Jain said.

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He said gold is likely to reach 1,020 dollar an ounce (28.34 grams) level in the international markets before ‘Diwali’.

However, in the domestic market the rising trend is likely to be capped with strengthening of Rupee against the US dollar, he added.

In the domestic market the prices are likely to be slightly over Rs 16,000 per 10 grams level, Jain said.

He said, the Rupee will keep on strengthening as the equity markets are performing well, which will encourage the Foreign Institutional Investors (FIIs) to bring in more money.

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Today, the gold was trading at Rs 15,585 per 10 grams, while in the global markets it was at $1,001 an ounce.

Meanwhile, independent analysts have remarked that the bull run in gold will continue as the various monetary and fiscal stimulus programs have failed to boost the world economy, feeding through to a dis-inflationary conditions.

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The US dollar, which is considered a safe haven, softens due to the weakening economic condition.

As dollar declines, many investors and central banks continue to hold gold as their safe haven to protect themselves from unforeseen global economic shocks, boosting the demand for the yellow metal.

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Lehman Blues?? Not Anymore ;) Market Scales New Heights ;)

lehman brothers

Shrugging off the deadly blow received at the time of Lehman Brothers’ collapse, stock markets in emerging countries, led by India, have moved significantly higher from the low levels witnessed a year ago.

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Analysts feel green shoots like recovery in economic growth and return of stability in the financial systems have led to a revival in confidence and risk appetites.

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Emergence of these green shots has brought confidence towards a full fledged recovery and return of the risk appetite, which is also reflected on the bourses which moved up significantly higher from their low levels.

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Experts seem to agree on the fact that Lehman is history and Indian markets are not under any pressure. They have recovered and are trading at good levels.

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The benchmark index Sensex, which is currently around 16,200 points, has gained nearly 20 per cent since September 15 last year, the day when Lehman filed for bankruptcy. The index had been at 13,531.27 points in the same day last year.

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Market analysts said the collapse of Lehman Brothers had been the ultimate blow for financial markets, which were already in deep bearish mood.

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“The closest victims were the capital markets of United States and that of Europe. The Indian markets also faced severe fall,” SMC Capitals Limited CEO and Equity Head Jagannadham Thunuguntla said.

However market analysts feels that India and China would play an important role in determining the global economic health in times to come.

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Analysts said that fortunately unlike other recessions which followed the bursting of asset bubbles, this time around apart from recapitalization of the financial system, the governments of the major economies of the world acted swiftly by slashing interest rates to unprecedented levels and providing fiscal stimuli.

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These measures have aided the return of stability to the financial system and economic activity.

The factors which have helped the Indian markets in recovery include re-election of the UPA government, enabling the political stability, and significant domestic demand.

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“These factors have brought back the interest of the FIIs into the Indian capital markets and enabled significant Foreign Institutional Investors inflows,” Thunuguntla added.

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