The Nifty has made a new recent high in this rise of 5,217 points on 27th January which fits into the time cycle window of a top we had been expecting since the last 2-3 weeks. We are also into short-term overbought territory and the Nifty has made a “hanging man” pattern implying that a break of Friday’s low would signal a small correction
S&P Nifty close: 5204.70
Short Term Up Medium Term Down Long Term Down
The Nifty opened flat but rallied smartly into the beginning of the new F&O settlement as envisaged last week. The rise was sharp as the Nifty hit the projected R2 level (5,217) of the week and closed with a smart gain of 156 points (+3.09%). However, volumes during the rise were significantly lower compared to the previous week. The sectoral indices which outperformed were BSE Capital Goods (+5.64%), BSE TECk (+5.18%), BSE IT (+4.03%), BSE Auto (+4.29%) and BSE IT (+4.17%) while the gross underperformers were BSE Reality (-0.28%), BSE FCMG (+0.71%) and BSE Healthcare (+1.50%).
The weekly histogram MACD remained above the median line, confirming the rally. The recovery was on volumes indicating that it could fizzle any moment. One must exit longs and those who are a bit adventurous can create some trading shorts as we have reached a short-term excess in the market and the risk-reward ratio is now getting skewed against longs, even though the trend is up. Stop loss on trading longs should be raised to 5,162 points and further support is pegged in the “gap area” between 4,980-4,991 points.
Here are some key levels to watch out for this week
1. The bulls have succeeded in driving prices higher and the Nifty came within a whisker of the 38.2% (5,221 points) retracement of the entire decline from 6,338-4,531 points.
2. This corrective rise has also come very close to 5,237 points (50% retracement levels of the fall from 5,944-4,531 points) hence one should be cautious in rallies from here on.
3. As pointed out last week, we rallied into the 24th-27th time window where the probability of a short-term top is high. Therefore it would be interesting to see whether we see at least a small correction taking place from current or slightly higher levels.
The Nifty has made a new recent high in this rise of 5,217 points on 27th January which fits into the time cycle window of a top we had been expecting since the last 2-3 weeks. It is also near significant retracement levels of the decline from 6,338 and 5,944 points which increases the probability of a correction from around current levels. We are also into short-term overbought territory and the Nifty has made a “hanging man” pattern implying that a break of Friday’s low would signal a small correction.
Vidur Pendharkar works as a consultant technical analyst & chief strategist, at www.trend4casting.com)
The participants at the IMW were reminded that if they wanted the freedom to grow, they had it, and there was no point in simply bringing up old issues. The approach was that the IMW heralded a solution oriented future, and was not going to be the complaint centre
There is a theory doing the rounds in the backrooms of power in India, quietly gaining strength with those for whom national interest takes precedence over anything else, that the Bombay-Calcutta axis of commercial power enhanced by the alignments of maritime trade as elevated in the post-Mughal colonial eras is about to self-destruct and implode into a natural end. This may not be very palatable to many, but then the truth is usually anything but bitter, and is more than wishful thinking by rival ports and cities and the people behind them which have come from literally the deep blue ocean and taken large chunks of cargo away from these two traditional city-ports.
Witness the following winds of change, globally and in India, as weather-vane indicators:
In this context, the first ever India Maritime Week (IMW) held in Delhi from the 17th through to the 21st of January, was a mirror to all that is going up and down, or better still, like the ocean tides, flowing in or out, along our coasts and connected aspects. Incidentally, one additional reason for holding this now to-be annual feature in Delhi was that it removed any trace of regional bias between coastal states and local power brokers, which has been the bane of similar attempts in the past. Holding this event in Delhi, straddling all aspects of the maritime industry, means that there was no Bombay club, Calcutta adda, Madras coffee-shop, Cochin spice or any other parochial or communal bias. This was simply—pan India.
The IMW also spanned seamlessly the complete spectrum of issues related to the role of shipping in securing and strengthening a country and its economy. Intermodal linkages (road, rail, inland water), ports, maritime industries (ship-building, repair, dredging), technology (software and hardware), people (HR onboard as well as skills development onboard and ashore), coastal shipping, passenger movements, ship-owning, finance and domestic as well as international regulations were just some of the issues where information was shared, and discussed, freely and frankly, often between disparate groups who were inter-dependent but rivals. In addition, this being Delhi, governance was present in full force, and made some important announcements which will have very deep bearings on the larger issues of national interest.
In addition to the inaugurals, where there was some plain speaking by various arms of the central government on past mistakes and future path forwards, were the surprise star sessions which sort of provided additional inputs on where the industry and therefore economy was headed. These included:
There is most certainly a deep realisation within the government and others that India’s complete future as a nation is at an inflection point, and is also intricately linked with India’s economic strength, which in turn depends a lot on the maritime strengths. The message is loud and clear—there is no more time to waste, the country has a large coastline, those states and ports and support services which move ahead will be given all support, those who continue to waste time and bicker may need to be aware of the consequences. There are nine state governments with coastal assets, there are some central government assets along the coast, the North East states have a good chance of being linked to the oceanways through Myanmar and/or Bangladesh, and most importantly—the country is not willing to accept a lack of efficiency any more.
If there was one message that went out from the IMW in Delhi, then it was this—the new ports in India are now the destinations of choice for trade, import, export and domestic. And if the older ports and their cities don’t provide this vital service, then nobody outside is going to mourn their change in status. To be given guided tours of the old dock systems in Kolkata and Mumbai and realise that things are so much still the same in both of them as they were decades ago, when this writer first joined a ship, may excite those seeking heritage and vintage thrills, but brought out titters and sniggers of “same shame” from some of the assembled delegates.
And then you are shown real-time satellite feeds and video clips of the newer ports, along with first-hand feedback from friends still sailing whose ships call these new generation Indian ports, and get invitations from more friends working at these ports—and you say to yourself, wish it was easier to secure permissions from the other authorities currently paranoid about security to bring this message to our own people that this, too, is India. And then you head into the exhibition area of the IMW, and suddenly, all this and more on display there.
The IMW should have had a “public day” for general visitors. Or place a mobile exhibition outside Red Gate, Indira Docks, Mumbai and Netaji Subhash Docks, Kolkata, for the people of those cities to see what their ports and cities could be.
The aim of the government is to put up at least 130% of projected capacity, both in captive and common user facilities, of all shipping-related needs, after which, may the most efficient survive and flourish. The participants at the IMW were reminded that if they wanted the freedom to grow, they had it, and there was no point in simply bringing up old issues. The approach was that the IMW heralded a solution oriented future, and was not going to be the complaint centre—and that was clear to see at IMW 2012 in Delhi.
(Veeresh Malik started and sold a couple of companies and is now back to his first love—writing. He is also involved actively in helping small and midsize family-run businesses re-invent themselves. Mr Malik had a career in the Merchant Navy which he left in 1983, qualifications in ship-broking and chartering, a love for travel, and an active participation in print and electronic media as an alternate core competency, all these and more.)
Five X is yet to be listed on the BSE after more than a year, leaving angry investors stranded
Shareholders in Octant Industries have been enduring an agonising wait, for more than a year, for listing of the demerged entity—Five X Finance and Investment (Five X).
For those unfamiliar with the dilemma, on 7 December 2010, Octant Industries, erstwhile Octant Interactive Technologies (OIT), had demerged its financial division business and vested 80% of its capital in this division known as Five X. The remaining 20% is vested with Octant Industries.
In other words, if an investor held Rs100 in OIT, Rs80 is vested in Five X while Rs20 will be held in Octant Industries. You can see that the bulk of the investors’ savings is held by Five X, which is yet to be listed on the Bombay Stock Exchange (BSE). 80% of the investors’ hard-earned money has been stuck for more than a year now. The peculiar thing is that Octant Industries, which got only 20% capital, successfully listed on 7 February 2011, just two months after the demerger announcement. Soon after being relisted in its new avatar, the stock hit a high of Rs28.90 and now is quoting at Rs10.49.
Initially, investors had to wait eight months for the Securities and Exchange Board of India (SEBI) to give its nod to go ahead with the Five X listing. Now they are waiting a further four months for BSE’s approval. One could safely assume that our regulators and institutions are holding investors at a ransom through unnecessary delays.
We first broke the story on 22 July 2011 (http://www.moneylife.in/article/post-de-merger-octant-interactive-shareholders-still-await-listing-of-spun-off-business/18317.html). After three months of this story, on 2 September 2011, SEBI had given its approval to go ahead with Five X listing. Now the ball is in BSE’s court to give the approval. We also had earlier written about BSE’s strange decision to list Octant Industries but not Five X (http://www.moneylife.in/article/bse-delays-five-x-listing-investors-capital-still-stuck-in-company/20811.html). Why is Five X taking longer than usual?
When we tried to dig some information about Girraj Kishor Agrawal, the director and signatory of Five X, we found out that he was director of the companies which were implicated for wrong-doings in the past. For instance, Mr Agrawal was the managing director of a company, Socrus Bio Sciences, which had flouted SEBI regulations for incorrectly reporting its shareholding pattern. SEBI had fined the company Rs1 lakh for the transgression without implicating its managing director. The order can be found here.
Additionally, Mr Agrawal is also involved in Banas Finance in the capacity as a director, which failed to comply with BSE listing agreement on 30 November 2007.
Interestingly, according to a recent filing with BSE, Octant Industries is planning a preferential issue for Rs13 crore, which is nearly 70% of its current equity capital. The company has planned to convene an Extraordinary General Meeting (EGM) to consider and pass this proposal on 9 February 2012, wherein the funds raised will be used for an “ongoing power project and to meet the financial institution requirements.”
The filing states:
“Octant Industries Ltd has informed BSE that the board of directors of the company at its meeting held on January 09, 2012, have considered and approved the proposal of Further Issue of Equity shares to the extent of Rupees Thirteen Crores on Preferential Issue basis in compliance with the provisions of SEBI (Issue of Capital & Disclosure Requirement) Regulations, 2009 and other related regulations. “
While Octant Industries is busy trying to raising capital at the behest of its owners, the very same shareholders are being quietly ignored while their hard-earned money is stuck with Five X. Is the management of Five X intentionally scuppering the chances of being listed? Being shareholders, is it not their right to know what is going on?
Despite repeated request to ask BSE for their views, we received no response at time of publishing this story.