Posts Tagged ‘Foreign institutional investors’

Binani Inds to Buy Public Holding in Cement Unit

Binani Industries Ltd said on Wednesday it received board approvals to acquire the entire public holding in its unit Binani Cement, sending shares of both companies soaring.

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In a separate statement, Binani Cement said it will voluntarily delist equity shares from both BSE and NSE, after getting shareholders’ approval. Its shares rose as much as 20% on the news, while the parent’s stock rose 16%.

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Traders expect that the purchase price would be decided using a reverse book-building method, which pushed up the stock price, said Jagannadham Thunuguntla, equity head at SMC Capitals.

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In reverse book-building, shareholders can indicate the price at which they will tender the shares, he added.

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As on June 30, promoters hold 51.28% stake, while non-institutions hold 41.75%, institutions 6.97% and foreign institutional investors hold 2.10%, BSE data showed.

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Binani Group is into manufacturing of cement, zinc, glass fibre and downstream composites.

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Binani Industries would have to spend over Rs 700 crore to acquire the entire shareholding at the current share price, Thunuguntla said, adding that this would be part of Binani Industries internal restructuring plan.

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Shares of the Binani Cement closed up 14.41% at Rs 95.65, while that of Binani Industries closed 11.4% up at Rs 121.45 in a strong Mumbai market.

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Source:Moneycontrol

OUR Websites:  http://www.smcindiaonline.com,http://www.smccapitals.com,
http://www.smctradeonline.comhttp://www.smcwealth.com

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WEEKLY Update 8th – 12th March

Here we bring you the weekly overview of the Indian as well as of the Global economy and latest global business and industry updates.

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Markets continued to build on the gains that came in the post budget week. Investors seem to have overcome the worry factors like domestic fiscal deficit & concerns over Euro Zone.

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Even the sudden burst of buying by the foreign institutional investors reflects the confidence  in the domestic economy. Food price index rose 17.87% in the 12 months to 20 February 2010, faster than the annual rise of 17.58% in the previous week but is expected to come down on the likelihood of good harvest going ahead.

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On the external economy front, India’s imports posted a strong growth for the second month running in January, signaling a pickup in domestic demand and investment. Non-oil imports registered a growth of 28.8% in January, while oil imports were up 56% from the year ago period.

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Exports jumped for a third  straight month in January, rising 11.5 per cent from a year earlier as demand  picked up in the United States and other major overseas markets.

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The data cheered the markets & eased some concerns over the optimistic economic growth outlook that came after the third quarter GDP numbers showing growth of 6%. In the nine months to December Indian economy has expanded by 6.7% & in order to meet the CSO expected growth of 7.2% in the current fiscal, it should grow by 8.8% in the last quarter ending March 2010.

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Going forward markets are expected to trade in line with the global markets & will keep a close eye on the IIP numbers that are scheduled to be announced in the coming week. However markets may face liquidity pressure with approximately 22,000 crore going out from the banking system last week & another 12,000 crore expected to go out by the week ending 13th march as a result of hike in Cash reserve ratio by 75 bps by RBI.

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Another liquidity squeeze would be from the corporate in the system as the last tranche of Advance tax is approaching i.e. 15th March. Above all the expected rush of new & follow on public offering in the near term is expected to put a continuous pressure on the liquidity front.

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The week gone by saw one of the strongest rallies in stock markets across the world which goes to show that bulls are still strong and a lot of money lying in the sidelines enters the market at every fall. Trend of Nifty and Sensex is bullish and Nifty has support between 5030-4950 and Sensex between 16700- 16400 levels. The dollar index is finding a strong resistance between 80-81 levels and if it does not cross this strongly then the rally is expected to continue.

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Commodities rose on benefits of doubt as dollar index is witnessing see saw movements amid some improvement in economic releases. However, there is still some uneasiness, regarding the health of European countries, including Spain. In metals and energy, things look balanced right now. These commodities are expected to trade in a range.

Story of agro commodities is little different.

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Despite fragile outlook, most of commodities prices soared on support at lower level buying and domestic as well as overseas demand.

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Cautious trading is advisable here, especially in spices as they have already witnessed significant upside in last few trading sessions.

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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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Corporate Bonds to be Routed through Clearing Houses: SEBI

Trade in corporate bonds would have to be routed through clearing houses from very soon

Trade in corporate bonds would have to be routed through clearing houses from very soon

Market regulator SEBI has said that trade in corporate bonds would have to be routed through clearing corporations from December 1, a move that experts say would check factors that aggravated financial crisis.

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Directives of the Sebi will be applicable to corporate bond trading that are not currently settled through clearing corporations or clearing houses of stock exchanges.

“It has now been decided that, all trades in corporate bonds between specified entities shall necessarily be cleared and settled through the National Securities Clearing Corp (NSCCL) or Indian Clearing Corp (ICCL),” it said.

The specified entities are mutual funds, foreign institutional investors/ sub-accounts, venture capital funds, foreign venture capital investors, portfolio managers, and RBI regulated entities, the Sebi said.

“The provisions of this circular shall be applicable to all corporate bonds traded Over The Counter (OTC) or on debt segment of stock exchanges on or after Dec 01, 2009,” it said.

SMC Capitals Equity Head Jagannadham Thunuguntla said, “It is a learning from the global financial crisis.  One of the major reasons for the crisis to be so severe was that many fancy financial instruments were traded OTC with no records.”

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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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Festivals and Trading Holidays Set to Keep Dalal Street Less Lively This Week :)

Despite bullish sentiment on hopes of strong quarterly results from firms, the Dalal Street is likely to less lively this week

Despite bullish sentiment on hopes of strong quarterly results from firms, the Dalal Street is likely to less lively this week

Despite bullish sentiment on hopes of strong quarterly results from firms, the Dalal Street is likely to less lively this week, as festive mood and fewer trading sessions would see investors withhold their positions and postpone buying, analysts said.

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Brokers believe the market sentiment will remain positive, even as investors will get only three trading sessions before the second quarter results of companies starts coming in.

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“The market is expected to remain in consolidation phase on the back of less trading sessions and festive season,” SMC Global Vice-President Rajesh Jain said.

The market would trade only for three days this week, as Monday and Friday will be trading holidays on the occasion of ‘Dussera‘ and ‘Gandhi Jayanti‘, respectively.

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Over the week, the BSE Sensex slid 193.43 points, or nearly 1.14 per cent and closed at 16,693 points.

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The under current in the market is bullish, there are not much expectations by investors for this week, while stocks may also look for global cues,experts observed.

The result season will kick start with IT major Infosys scheduled to announce its second quarter results on October 9.

During the last week, foreign institutional investors have put in over Rs 6,528.1 crore in Indian markets.

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