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Gold falls by 2%

Gold prices fell to its three-month low, on Wednesday, after the latest US FOMC minutes, released on Tuesday showed that the Fed may not resort to further quantitative easing. The ongoing strike by jewellers in India, biggest buyer of physical gold, has also hit gold in the recent weeks

Gold prices fell to its three-month low, on Wednesday, after the latest US Federal Reserve’s Open Market Committee (FOMC) minutes, released on late Tuesday afternoon showed that the Fed may not resort to further quantitative easing. Experts say that the ongoing strike by jewellers in India, biggest buyer of physical gold, has also hit gold in the recent weeks. Gold fell by 2.6% to $1,628.10 an ounce, a new low since 22nd March and Silver fell by 4.1 % to $31.90 an ounce.

Prithviraj Kothari, managing director, RiddiSiddhi Bullions, says, “Indian physical demand has been light here. Most Indian jewellery shops were in the third week of a “strike” to protest higher import duties, and this loss of demand has been cited as a factor weighing down gold lately. The Indian strike situation will prove detrimental to the local physical market the longer it drags on, as a combination of reduced sales and falling gold prices will make it all the more harder for demand to pick up from where it left it.” The precious metal, earlier, has witnessed a fall after the Federal policy was announced.

On 29 February 2012, when the Federal Reserve chairman, Ben Bernanke, told Congress he saw potential inflationary pressures from rising gasoline prices, the price of gold fell nearly $100 an ounce. On 28th February this year, with the June contract hitting a three-month high of $1,795.10, gold rallied on the talks that Fed would announce further quantitative easing.

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Funds through IPOs slump 82% to Rs5,800 crore in 2011-12

A total of 33 Indian firms together raised Rs5,808 crore via IPO route during the fiscal ended 31 March 2012. In comparison, a total of Rs33,183 crore worth capital was raked in by 52 firms during the fiscal 2010-11

New Delhi: Indian companies raised a total of Rs5,800 crore during the last fiscal 2011-12 through Initial Public Offers (IPOs)—a slump of 82% from the previous year, reports PTI.

According to an analysis of data available with the stock exchanges, a total of 33 Indian firms together raised Rs5,808 crore via IPO route during the fiscal ended 31 March 2012. In comparison, a total of Rs33,183 crore worth capital was raked in by 52 firms during the fiscal 2010-11.

Interestingly, NBCC was the single state-owned firm to enter the capital market through IPO route during 2011-12. It raised about Rs120 crore through its public offer.

Besides, two other public sector firms—Power Finance Corp (PFC) and ONGC—raised capital through follow-on public offers (FPOs) during the past fiscal. PFC and ONGC raised Rs4,660 crore and about Rs12,000 crore, respectively.

Among the major IPOs of the year, L&T Finance Holdings raised Rs1,245 crore, gold loan company Muthoot Finance garnered Rs900 crore, Future Ventures India, part of Kishore Biyani-promoted Future Group, mopped up Rs750 crore and commodity bourse MCX raked in Rs663 crore.

The other IPOs that entered the market were Flexituff International, Innoventive Industries, PG Electropast, TD Power Systems, SRS, Aanjaneya Lifecare and Tree House Education & Accessories.

Further, three IPOs—Galaxy Surfactants, Swaraj Air Charters and Goodwill Hospital and Research Centre—withdrew their offers after a poor response from the market.

Moreover, as many as 45 companies refrained from bringing out their IPOs during the fiscal 2011-12 despite obtaining the go-ahead from the Securities and Exchange Board of India (SEBI). Together, these companies were aiming to raise Rs33,787 crore.

The companies which let their regulatory approvals lapse during the year included Jindal Power, Sterlite Energy, BPTP, Gujarat State Petroleum Corp, Micromax and Embassy Property.

Market experts believe many companies were averse to hitting the market because of the subdued market conditions, as well as the fact that firms that did implement their public stake sale plans are trading below the issue price.

Looking ahead, SMC Global Securities strategist and head of research Jagannadham Thunuguntla said, “Further, the government’s disinvestment program which was supposed to bring public issues of several blue-chip PSUs couldn’t take off. The recent lukewarm response to ONGC auction can also impact the confidence of the public issue market.”

“The secondary market and global liquidity hold key for the future of IPO market,” he added.

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