Stocks
A short rally likely in Sensex, Nifty: Friday Closing Report
If Nifty does not break today’s low on Monday, it may move higher over the next 3-4 days
 
Late buying in IT and technology stocks amid volatile trade helped the market close in the positive terrain. If Nifty does not break today’s low on Monday, it may move higher over the next 3-4 days. The National Stock Exchange (NSE) recorded a volume of 71.13 crore shares and advance-decline ratio of 491:907.
 
The domestic market opened in the negative on continuing weakness in the rupee and on unsupportive global cues. US indices dropped over 2% in overnight trade following the Fed’s comments on Wednesday. Reflecting the sentiment, markets across Asia were also lower in morning trade today on concerns about the economic slowdown in China.
 
The Nifty opened 16 points lower at 5,640 and the Sensex started the day at 18,696, down 23 points. Selling in realty, metal, banking, capital goods and oil and gas sectors led the benchmarks to their lows in initial trade. The Nifty fell to 5,619 and the Sensex slipped to 18,615 at their respective lows.
 
However, the indices soon recovered from their lows on support from IT, technology, power and auto stocks.  The gains saw the benchmarks emerging into the green in late morning trade. 
 
The market hit its high in noon trade as the benchmarks extended their gains. At this point the Nifty rose to 5,686 and the Sensex rose to 18,821. But the indices soon pared their gains and returned to the negative on selling pressure in heavyweights in the post-noon session.
 
Late buying in IT and technology stocks helped the benchmarks settle higher, a day after the market plunged nearly 2%. The Nifty rose 12 points (0.21%) to 5,668 and the Sensex ended the session at 18,774, up 55 points (0.29%).
 
The broader indices underperformed the Sensex as they closed in the negative. The BSE Mid-cap index declined 1.28% and the BSE Small-cap index fell 0.38%.
 
The top sectoral gainers were BSE IT (up 1.43%); BSE TECk (up 1.11%); BSE Auto (up 0.34%); BSE Power (up 0.27% and BSE Oil & Gas (up 0.17%). The main losers were BSE Metal (down 1.45%); BSE Realty (down 1.02%); BSE Consumer Durables (down 0.41%); BSE Bankex (down 0.37%) and BSE Capital Goods (down 0.32%).
 
Out of the 30 stocks on the Sensex, 15 stocks settled higher. The top performers were ONGC (up 2.56%); Dr Reddy’s Laboratories (up 2.23%); Infosys (up 2.21%); NTPC (up 2.11%) and Maruti Suzuki (up 1.91%). The major losers were Jindal Steel & Power (down 8.06%); Hindalco Industries (down 4.20%); Sun Pharmaceutical Industries (down 1.85%); Sterlite Industries (up 0.98%) and Reliance Industries (up 0.66%).
 
The top two A Group gainers on the BSE were—Gujarat Mineral Development Corporation (up 6.17%) and Indian Hotels Company (up 4.87%).
The top two A Group losers on the BSE were—Future Retail (down 32.81%) and Karnataka Bank (down 15.50%).
 
The top two B Group gainers on the BSE were—Oscar Investments (up 20%) and Sarla Performance Fibers (up 19.96%).
The top two B Group losers on the BSE were—Future Retail (down 9.98) and Noida Medicare Centre (down 18.15%).
 
Of the 50 stocks on the Nifty, 25 ended in the in the green. The major gainers were IndusInd Bank (up 3.95%); Hindalco Ind (up 3.32%); ONGC (2.82%); Ranbaxy Laboratories (up 2.11%) and NMDC (up 1.88%). The key losers were JSPL (down 7.79%); Bank of Baroda (down 4.59%); Punjab National Bank (down 3.07%); Reliance Infrastructure (down 2.02%) and Sun Pharma (down 2%).
 
Markets in Asia, with the exception of the Japanese benchmark, closed in the red on account of the US Fed’s comments on Wednesday and Chinese growth concerns. However, a weak yen helped the Japanese market to close higher.
 
The Shanghai Composite declined 0.52%; the Hang Seng dropped 0.59%; the Jakarta Composite tanked 2.48%; the KLSE Composite fell 0.37%; the Straits Times slipped 0.28%; the Seoul Composite tanked 1.49% and the Taiwan Weighted settled 1.34% higher. Bucking the trend, the Nikkei 225 surged 1.66%.
 
At the time of writing, the main European markets were trading 0.46% to 1.05% higher and the US stock futures were in the green, indicating a positive opening for the US markets later in the day.
 
Back home, foreign institutional investors were net sellers of shares totalling Rs2,094.06 crore on Thursday whereas domestic institutional investors were net buyers of stocks amounting to Rs1,332.50 crore.
 
India’s largest sugar producer Bajaj Hindusthan (BHL) has put on block its entire holding in two group companies—Bajaj Energy Pvt Ltd (BEPL) and Bajaj Hindusthan (Singapore) Pte Ltd (BHSPL)—in order to consolidate its power business and avoid cross-holding from its sugar arm. The stock declined 4.70% to close at Rs14.20 on the NSE.
 
United Bank of India has decided to stop fresh lending to infrastructure, steel and iron, airlines and real estate and textile sectors. According to Archana Bhargava, chairperson and managing director of the PSU bank, non-performing assets in these sectors have been going up and the recovery has also been poor. The stock tumbled 6.95% to close at Rs46.20 on the NSE.
 

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COMMENTS

Manher Desai

4 years ago

If you look at product profile of FRESENIUS KABHI i am sure you will be tempted to buy this stock in small qty and remain as long term investor.

snehakamath

4 years ago

High dividend yield shares are better to pick up for excellent gain for short to medium term.

Wait a little longer and if bank shares have hit bottom then start picking them. Start with larger banks like SBI,ICICI, Canara Bank, PNB, BOB etc

Interestingly small banks some of them at current prices also are good dividend yield hence could be double whammy.
Karnataka bank , Andhra bank , syndicate bank etc are really good at current prices due to dividend yield and consiatant dividend payments.
However these are high volatile and hence are not for traders but for investors who can at least wait till next RBI announcement, eventually both CRR and interests have to go down. We are very close to the goal it could be couple of months maximum wait without fear when and if further fall happens , if one can steadfastly hold on to banking will reap windfall profits.

If one must trade , among the trio GVKPIL and LITL appear to be a total waste having gone below Rs 10 long back , are unlikely to move up. Results also are bad for them. However GMR Infra with a small dividend anounced is really attractive at current prices for betting , Stop loss is a must. Other bets can be Adani Enterprises , Essar Oil etc. Again not to bet without strict stop losses

ramanathan dwarakanathan

4 years ago

while I am not a technical expert.I feel pharma & IT cos are a better bet.

REPLY

Manher Desai

In Reply to ramanathan dwarakanathan 4 years ago

For long term investor Pharma sector is best option and reasonably safe option as per my feel. In IT sector go for the TOP bets. As long as Rs is weak IT sector top companies has to perform.

SEBI bars Pan Asia Advisors and its promoter Arun Panchariya from markets for 10 years
Pan Asia Advisors and its promoter Panchariya and Indian companies created a scheme to mislead Indian investors about the inflow of foreign investment through GDRs
 
Market regulator Securities and Exchange Board of India (SEBI) has barred Pan Asia Advisors, now known as Global Finance and Capital and its promoter Arun Panchariya for 10 years for market manipulation using global depository receipt (GDR) issues. 
S Raman, whole-time member of SEBI passed final order on 20 June 2013, barring Panchariya and Pan Asia Advisors from dealing and accessing, directly or indirectly Indian markets for the next 10 years.
 
The probe by the market regulator found market manipulation using GDR issues involving several entities, including Panchariya and Pan Asia Advisors.
 
SEBI said, “It was inter-alia observed that Panchariya had entered into a fraudulent arrangement with the promoters of certain issuer companies like Asahi Infrastructure & Projects, IKF Technologies, Avon Corporation,  K Sera Sera, CAT Technologies and Maars Software International to issue GDRs.”
 
“The cross referenced agreements signed by entities of Panchariya and by the issuer the company with Austria-based European American Investment Bank AG led to GDR proceeds received by company being pledged against loans raised by entity of Panchariya. The names of the foreign investors disclosed to exchanges in India were found to be fictitious. Therefore, together, Panchariya and Indian companies have created a scheme to mislead the investors about the inflow of foreign investment through GDRs and that the companies were found as favourable investments by foreign investors. Thereafter these GDRs were converted through sub-accounts controlled by Panchariya and the shares so converted were dumped in the Indian securities markets to the detriment of the Indian investors,” SEBI said in its order. 
 

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COMMENTS

nazar

3 years ago

these brothers are criminals and should be sent to prison for there actions. and know are trying the same trick in dubai... please stop them as they try to rip off innocent investors...

Bosco Menezes

4 years ago

Good work ... these scamsters must be brought to book

REPLY

nazar

In Reply to Bosco Menezes 3 years ago

very dishonest people. trying to scam good innocent people.. they should go to jail..

Laffans Petrochemicals: Something fishy happening?

Minority shareholders are once again at the receiving end after the company sells off its business to a multinational; auditors sign off on the accounts despite several glaring irregularities in the books. What is really going on?

Laffans Petrochemicals (Laffans) is an example where investors lose, even after taking care to invest in a profitable company with good prospects.  Laffans has never made a loss in all its years of existence, but the shareholders have still been left high and dry with no returns and a dodgy sell-off of its core business. Here is what happened.
 

The Bombay Stock Exchange (BSE) listed Laffans has had a nearly spotless record of profitability since 1994, barring two (1998 and 2012) years. But although it earned a profit, there is no record of dividends being ever distributed at all. Interestingly, it wasn’t until 2012, the year it made a loss, that some dubious accounting practices was discovered, but the auditor, Shekhar Gupta, of SM Kapoor & Co did not see fit to qualify the accounts.
 

On 2 April 2011, Laffans Petrochemicals sold off its manufacturing unit at Panoli to the Huntsman Performance Products (India) Pvt Ltd, a multinational corporation, following a court order of 11 March 2011 and discontinued operations since then. This bland disclosure in the 2012 annual report sealed the fate of the investment of hundreds of small shareholders. A corporate disclosure to the BSE merely says: “Under the terms of the sale, 140 people at the Ankleshwar site and 25 people from the Mumbai and other regional commercial sites will join Huntsman.” No talk about the value of the deal or the consideration that Laffans received.
 

That’s not all. While the business ceased to function, investors have written to Moneylife pointing out that a series of costs continued to be debited to the company.  For instance, Rs26.81 lakh was debited towards “carriage inwards” when there were no purchases. Another Rs94.11 lakh debited to “repairs and maintenance others” when there should have been nothing to repair—what is worse, when the factory was fully in operation in 2011, the spending on repairs was Rs9.19 lakh.
 

That’s not all. Out of the blue, the company acquired creditors to whom it owes Rs8.48 crore (up from just Rs5.19 lakh). Who are these people/entities? There is no explanation to shareholders.
 

Under “management discussion” in the 2012 annual report, it is mentioned that the company makes money through commissions and interest. It has Rs45.55 lakh in mutual fund investments, mostly in fixed maturity plans (FMP) of one year duration. These investments are classified as “non current investments” or short terms. One of these investments amounting to Rs1.25 crore was invested in a company called “California Infotech.com Pvt Ltd”. Shareholders have written to say that there is no record of this company on the MCA21 portal. The auditors have found nothing fishy about this too.
 

Laffans Petrochemicals is quoting at Rs9.81 in the Periodic Call Auction System (PCAS) window on the BSE. Yet, the value of its “non-current investments” alone is roughly Rs56.94 per share! In effect, its current market capitalisation is LESS than its “non current investments”! In other words, the company is sitting on a pile of cash while the minority shareholders are helplessly watching their wealth disappear via dubious accounting and can do nothing about it. Laffans made a loss in 2012 after selling off a key business- this is only the second time since 1994 that it has reported a loss.
 

Finally, according to a BSE disclosure, on 4th April 2011, it said: “Laffans Petrochemicals will continue as a supply chain partner for Huntsman and will also look for other complimentary opportunities in the chemical industry. Laffans is already evaluating setting up a fatty anime project, a basic raw material for the agro and FMCG industry. The project site is yet to be decided but this could be in Gujarat or Malaysia. The project would be fully funded by Laffans.”
 

If this is how companies treat their minority investors, is it any wonder that millions of retail investors shun the capital market today?

User

COMMENTS

Bosco Menezes

4 years ago

What a sad reflection on the greed of some promoters - never distribute dividends, then sell the business (rather than the company, which would have resulted in an Open Offer) & then dont share the proceeds with shareholders. Terrible .

nagesh kini

4 years ago

1. Who are the Auditors?
2. A fit case for detailed investigations by
a. The Inst. Of CA Committee
b.SEBI
c. MCA by SIFO.

It squarely does come under vanishing companies! It has simply vanished!

shanti Patel

4 years ago

Why in AGM the shareholders take up this issue?
If required a letter listing out various matters on which a clarifications are required should be send by shareholders.Even a letter can be send to Auditors if required.
If everybody wants to SLEEP, then nothing can be done.
My experience is that the result can be achieved if you right and peruse the matter.
I have fought against a very leading firm of chartered accountants and got the desired result.
Please send me the Annual Report.
I am a subscriber to MONEY LIFE.
Shantilal K. Patel
9892485457
Chartered Accountant

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