The Sensex closed at 16,692 as it gained 91 points from the previous day’s close, while the Nifty closed at 4,986, up 33 points on the back of strong global markets.
Reliance Industries Ltd (RIL) said today that it had made a gas discovery in one of its exploration blocks in the Krishna-Godavari basin off the country's eastern coast. RIL holds a 90% interest in the block, which covers an area of 3,288 sq km, and Hardy Exploration and Production (
Mahindra & Mahindra Financial Services jumped 2%, after the company said that Franklin Templeton Mutual Fund had hiked its stake in the company.
Sun TV Network rose 1%, after the company said that it will restructure its distribution business.
Golden Tobacco remained flat after the company’s board approved developing its property at Vile Parle, a Mumbai suburb.
Valiant Communications Ltd has formed a 100% wholly-owned subsidiary, Valiant Communications FZE, in the
Aban Offshore Ltd’s wholly-owned subsidiary, Sinvest AS, has redeemed bonds having a principal amount aggregating to Norwegian kroner 1 billion (equivalent to Rs800 crore) along with accrued interest, on the due date of 22 December 2009. The stock was up 4%.
As per reports, corporate advance tax payments for the October-December 2009 quarter shot up sharply, suggesting a higher profit growth in the corporate sector in the third quarter (October-December) of the current fiscal, pointing to a firm broad-based economic recovery. Corporate advance tax payments for the quarter were up 44% to Rs48,300 crore against a 3.7% decline in the April-June quarter and a 14.7% increase in the July-September quarter.
During the day, the deputy head of the planning commission Montek Singh Ahluwalia said that the sharp surge in food prices reflects the impact of the drought and inefficient distribution, which could not be addressed by monetary policy. He said that while the increase in food prices was to some extent expected, it remained a concern. Food prices rose an annual 20% in early December—but they should decline in January 2010 as the stock situation is relatively stable. He further added that problems such as this cannot be tackled by blunt instruments like monetary policy.
“Price increase at the retail level is much more than the increase at the wholesale level which is because of dysfunctionality in the distribution system and the ministry is looking into it. But whenever required, we should import,” Mr Singh said.
Finance secretary Ashok Chawla announced that the government is likely to offer cash instead of bonds to State-run oil firms for compensating them for selling fuel at lower than market prices, as per media reports. However, no decision has been taken on the compensation amount.
During the day, Asia’s key benchmark indices in
On Monday, 21 December 2009, the Dow Jones Industrial Average was up 85 points while the S&P 500 and the Nasdaq Composite were up 12 points and 26 points respectively after a Bill to overhaul the
Meanwhile, rating agency Moody’s cut Greece’s debt to ‘A2’ from ‘A1’ over soaring deficits, becoming the third major rating agency to downgrade the highly-indebted country’s rating this month. Moody’s has kept
The Confederation of British Industry raised its 2010 economic growth forecast and said that the Bank of England may pause its bond-purchase plan in February 2010. Meanwhile, policy-makers have pledged to print £200 billion of new money to stoke spending and shake off
In premarket trading, the Dow was trading 43 points higher.
Where promoters have increased their stake, the growth has been excellent leading to higher share price
Continuously rising stake by promoters can lead to an early signal of improving fundamentals and of course, a sharp rise in stock prices. A recent study by Moneylife found that promoters of 71 companies out of the 1,328 companies from our database have increased their stakes in the last four consecutive quarters.
It’s unusual to see promoters’ holding increase on a regular basis. They usually step in to buy after a sharp market decline to shore up their holdings. They don’t continuously increase their stake, quarter after quarter in a rising market. If they did, it would not only indicate their confidence about their companies but also show that they are very bullish indeed. This is exactly what has happened. As the Moneylife study found out, rising promoter holding was an early indicator of financial performance and stock price performance.
Promoters’ stake has increased the most in Linc Pen & Plastic, by 41% in the December 2008 quarter to the September 2009 quarter. Its operating profit has grown 164% and the stock has surged 119% in the same period. Promoters of JBF Industries (24%), Hexaware Technologies (22%), Genus Power Infrastructures (14%) also were a very confident lot. These companies have performed very well at the operating level and their stock has been in the investor’s radar over this time period. JBF Industries posted a strong operating profit growth of 50% and its stock soared 230%. Hexaware recorded a 533% rise in operating profit from a low base of last year and its stock rallied 284% in the same period. Genus Power Infrastructures also posted a strong performance as its operating profit grew by 36% and stock rose by 69%. All these companies have recorded significant growth in profit and therefore in share prices.
Promoters in the pharmaceutical sector were especially upbeat. Their holding in eight drug companies increased in each of the past four quarters. Companies like Suven Life Sciences, Shasun Chemicals & Drugs and FDC Limited were some of the pharma stocks that attracted investors’ interest because of their operating profit growth. Shasun, Suven and FDC posted a rise in their operating profit by 549%, 178% and 162% respectively. These three stocks gained 145%, 87% and 50% respectively.
Auto components was another sector where promoters were bullish where Banco Products (India), Autolite (India) and Ramkrishna Forgings posted a rise in operating profit of 205%, 155% and 133% respectively. These three stocks gained 115%, 58% and 128% respectively. Despite the general feeling that the textile companies were in the dumps, many of the spinning companies have been doing well and not surprisingly, promoter activity was intense in many textile companies too. In six companies, there has been a rise in the stake in each of the past four quarters. Nahar Spinning Mills and Eurotex Industries & Exports posted a growth of 492% and 433% in operating profit. Their stock prices grew by 140% and 110% respectively. So, next time, you see promoters increasing their stakes in successive quarters, you know that the financial performance is going to be good and the stock prices would possibly be higher.
The management committee of the Bombay Stock Exchange (BSE) Brokers Forum has asked the Exchange to reconsider the new trade timings that would come into effect from next month.
In a release, the Committee said that it does not see any visible and clear benefit to any market participant, stakeholder, institution or retail investor due to the move to advance market opening to 9am from 9.55am. This has also been reaffirmed by 79% of the trading members of BSE in a survey conducted by the BSE Brokers Forum in November 2009.
No sections of the markets have demanded any such move and there is no consensus on the matter, the Committee said.
The BSE Brokers Forum has asked both the exchanges, BSE and the National Stock Exchange (NSE) to take into consideration the ill-effects of the early opening at 9am on the market participants and investors at large and appealed them to reconsider their decision.