Stocks
Sensex, Nifty likely to rally – Wednesday closing report

Nifty to stay above 7,875 for realising some gains

 

We had mentioned in Tuesday’s closing report that S&P BSE Sensex and NSE’s CNX Nifty are oversold but the market would rally only if Nifty goes above 7,930. On Wednesday, the market was in the positive territory till 11.30am, after which it started drifting lower. During the post-noon session, it went lower, until a late buying pulled the indices back near the day’s highs. This was met with some selling and both the benchmark indices closed near the day’s lows.


Sensex opened at 26,230 while Nifty opened at 7,829. The benchmarks hit their intra-day high at the beginning of the session at 26,338 and 7,870. The indices hit their lows at 26,150 and 7,816. Sensex closed at 26,247 (down 25 points or 0.10%), while Nifty closed at 7,843 (down 10 points or 0.12%). NSE recorded a volume of 73.39 crore shares. India VIX fell 2.42% to close at 14.1125.


Among the other indices on the NSE, the top five gainers were PSE (1.61%), Energy (1.56%), Realty (1.50%), PSU Bank (1.35%) and Commodities (1.31%), while the top five losers were Pharma (3.43%), IT (3.37%), Service (0.67%), MNC (0.52%) and Smallcap (0.24%).


Of the 50 stocks on the Nifty, 31 ended in the green. The top five gainers were DLF (4.80%), IndusInd Bank (4.58%), Tata Steel (3.83%), BPCL (3.72%) and Bhel (2.81%). The top five losers were Tech Mahindra (4.74%), Infosys (4.73%), Dr Reddy (4.49%), Wipro (4.45%) and Sun Pharma (4.24%).


Of the 1,596 companies on the NSE, 670 companies closed in the green, 863 companies closed in the red while 63 companies closed flat.


The International Monetary Fund (IMF) on 7 October 2014 raised India's growth forecast to 5.6% for 2014 from its earlier estimate of 5.4% on the back of effective policies and a renewal of confidence, following the elections. However, it cut the global growth forecast and that for emerging market economies as a whole. The world economy will grow 3.8% in 2015, compared with a July forecast for 4%, after a 3.3% expansion in 2014, compared with a July forecast for 3.4%, the Washington-based IMF said.


The finance ministry and the Reserve Bank of India (RBI) are supposed to finalise a new monetary policy framework by December end under which the central bank will pursue the retail inflation target to be decided by the government. Under the new framework, the interest rate will be decided by a monetary policy committee with a view to ensure that inflation remains within the targeted levels.


Coal India divestment process should begin immediately after the Diwali, Manoj Joshi, joint secretary of financial markets, in the Finance Ministry, said on Wednesday. The Central government wants to sell a 10% stake in the state-owned company this fiscal year ending March 31, as part of many divestments aimed at bolstering its stressed finances.


Crude oil prices dropped sharply today. Lower crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. Indian Oil Corp (6.99%) was among the top two gainers in the ‘A’ group on the BSE.


Natco Pharma (6.96%) was the top loser in ‘A’ group on the BSE. It filed its shareholding pattern for September 2014 quarter.


L&T Technology Services, the wholly owned subsidiary of L&T group today announced the intent to acquire the assets of US-based Dell Product and Process Innovation Services (formerly eServ), the engineering services division of Dell. The closure of transaction is expected around this quarter, subject to certain regulatory approvals. It added that the Competition Commission of India has approved the proposed transaction. The company is awaiting US regulatory approvals which are expected shortly. L&T (2.32%) was among the top two gainers in the Sensex 30 pack.

 

Infosys (4.70%) was the top loser in the Sensex 30 stock even though Citigroup downgraded the stock to "neutral" from "buy."


US indices closed lower on Tuesday. The US Federal Reserve will release the minutes of its September 16-17 meeting on 8 October 2014.

 

Except for Shanghai Composite (0.80%), KLSE Composite (0.17%) and NZSE 50 (0.19%) all the other Asian indices closed in the red. Jakarta Composite (1.48%) was the top loser.


The HSBC China services Purchasing Managers Index edged down to 53.5 in September, after recording a 17-month high of 54.1 in August, HSBC Holdings PLC today, 8 October said. A reading above 50 indicates a month-on-month expansion while below points to contraction.


European indices were trading in the red while US Futures were trading in the green.

User

Swachh Bharat: Anil Ambani joins campaign, invites Amitabh, Mary Kom

The R-ADA group chairman picked up the broom to clean an area outside Churchgate station and invited Mary Kom, Amitabh Bachchan and Sania Mirza to take the initiative forward

 

Joining Prime Minister Narendra Modi’s initiative to rid the country of litter and rubbish, Anil Ambani on Wednesday picked up the broom to clean an area outside Churchgate station. The Reliance Anil Dhirubhai Ambani (R-ADA) group chief also invited boxing champion Mary Kom, superstar Amitabh Bachchan and tennis star Sania Mirza to join the initiative.

 

Launching the Swachh Bharat campaign last week, PM Modi had named nine celebrities, including Ambani, cricketing icon Sachin Tendulkar and film stars Salman Khan and Priyanka Chopra to take the initiative forward.

 

He had asked them to nominate nine more people to join the campaign with a hope that the chain will continue.

 

Ambani picked the broom to clean an area near Churchgate station in Mumbai and invited nine prominent personalities, including Asian Games gold medallist boxer Mary Kom, legendary film star Amitabh Bachchan and tennis star Sania Mirza to take the Swachh Bharat campaign forward.

 

Modi tweeted, “Wonderful effort by Shri Anil Ambani, who cleaned the area around Churchgate Station in Mumbai along with his friends. #MyCleanIndia.”

 

Sources said others named by Ambani include columnist Shobha De, leading journalist Shekhar Gupta, lyricist Prasoon Joshi, Bollywood superhero Hrithik Roshan, Telugu superstar Nagarjuna and Runners Clubs of India.

 

“I am honoured to be invited by our respected Prime Minister Narendrabhai Modi to join the Swachh Bharat Abhiyan. I dedicate myself to this movement and will invite nine other leading Indians to join me in the Clean India campaign,” Ambani had said on 2nd October.

 

Ambani was among the nine eminent personalities picked up by Modi to propagate the Swachh Bharat campaign. Others included cricketing icon Sachin Tendulkar, film stars Salman Khan, Priyanka Chopra and Kamal Hassan, Yoga guru Baba Ramdev and Congress leader Shashi Tharoor.

 

Modi used Gandhi Jayanti, the birth anniversary of Mahatma Gandhi, to start the cleanliness drive and ordered ministers to sweep areas clean.

 

“I have invited nine people and asked them to come to public places and work towards a Clean India. I ask them to invite nine more people too... I am sure these nine people will do the work and each will invite nine more people to form a chain and clean the country,” Modi had said then.

User

COMMENTS

Mahesh S Bhatt

2 years ago

Cleanliness is next to Godliness.

Let RIL stop manufacturing Plastics for bags which pollute the rivers/clog the gutters/Sea shores than one of the way to swatch Bharat shall open.

Let government ban plastic bags.

Let railway stations have more waste paper baskets/loos for men & women.Fines have not worked let's change the attitudes.

Cleanliness shall bring good health,which shall bring good wealth.

Let's Do It for Gen Next.

Mahesh

Why UK Sinha’s talk of controlling stock manipulation is not credible

SEBI chief wants to unveil new insider-trading norms by March 2015 while the market regulator ignores hundreds of cases of brazen stock manipulation

 

Market regulator Securities and Exchange Board of India (SEBI) is likely to unveil latest version of its insider trading regulations before FY15 end following recommendations of the NK Sodhi committee. Does this mean, SEBI's current insider trading norms have failed to safeguard investors? Or may be 'all is well' for the market regulator and there is not a single incident of insider trading, stock manipulation. Or may be SEBI and the stock exchanges, the first line of regulators just do not care about financial consumers?

 

Now see the statement from the top brass of SEBI. UK Sinha, the chairman of SEBI, while inaugurating FICCI’s annual capital market conference in Mumbai on Wednesday, said the market regulator is in favour of a soft enforcement regime coupled with risk-based supervision with all these measures coming in before the end of this fiscal.

 

Moneylife has been highlighting hundreds of cases of stock manipulation and insider trading. Yet, SEBI do not have time to even look into these cases, forget about investigating such matters on its own or punishing those responsible for it. It is no secret that Indian stock markets are hotbeds of manipulation. Promoters and operators are having a field day even as exchanges and the market regulator sit idle.

 

In some cases, the Exchanges seem to deliberately turn a blind eye. In others, the regulator seems to be helping the process by handling repeated offences with kid gloves. The maximum instances of manipulation are in smaller stocks, the kind that fly below the radar. Most of these are listed on the BSE. This does not mean that the National Stock Exchange (NSE) is free from it; there a bigger game is played—in the way stocks for the futures & options (F&O) are selected and then driven up and down through false information, rumours and the like. Together, these cases make you wonder how fair the stock prices are in Indian markets.

 

Take for example, in March 2014, Moneylife published a report about possible insider trading in AstraZeneca Pharma India Ltd, a day before the company's parent decided to delist the company. The sudden unusual rise in its turnover during three trading days, 28th February, 3-4th March 2014 appeared fishy. The stock rose by Rs77.75 a day before its public announcement and just the day after, it fell by Rs107.40. The suspicious spurt in volumes and price in this company required an investigation by the market regulator. But then while insider trading is rife in India, SEBI rarely acts, despite having spent Rs40 odd crore in sophisticated inter-market surveillance system.

 

Other example is when NR Narayana Murthy re-joined Infosys in 2013. On 1 June 2013, the company made the announcement. However, just a day before, i.e. on 31st May, Infosys scrip rose by 3.32% on the BSE, while the benchmark Sensex was down 455 points. Even its peer group companies like Tata Consultancy Services (TCS) and HCL Technologies ended 31 May 2013 flat. After reports from Moneylife and other media, SEBI sought clarifications from Infosys regarding the company's board meeting held on 1 June 2013 in which Narayana Murthy was re-appointed as its executive chairman.

 

In another example of possible insider trading, over six trading days, prior to the announcement of its acquisition by Pharmaceutical Industries Ltd (Sun Pharma) in $4 billion deal, Ranbaxy Laboratories Ltd shares rallied 34%. The deal was announced on 7 April 2014. Ranbaxy shares rose by as much as Rs116 (34%) in days before its made public announcement, a huge rise of 8.18% happening on the trading day before the actual announcement! Again, interestingly, neither the overall market (Sensex) no other pharma company stocks were rallying. It was only Ranbaxy that was shooting up, based on no news that could be related to the company. Again all this required investigation from the market regulator, but none happened.

 

Moneylife had written about suspicious trading activities in the AstraZeneca Pharma, LIC Housing Finance and Bajaj Corporation to name a few. There has been no action by SEBI.

 

Now, let’s see stock manipulation in smaller companies. Prism Informatics was known as Akruti Holdings in 2010 and is supposed to be engaged in software development. At that time, the stock had been hitting the upper circuit with just one or two trades! It zoomed up 29,348%, in just a matter of two years, all the way from a low of Rs0.29 on 15 September 2009 to a high of Rs85.4 on 22 September 2011, on a handful of trades. Volumes picked up only when the share price started to fall. It has fallen by 63% since. Who can make sense of this rollercoaster ride?

 

Changing the company name is a common practice to fool minority shareholders and to disguise past transgressions. Out of City Travel Solutions was Tilak Finance. The company was also suspended for non-compliance with listi ng norms. However, the suspension was soon revoked. The share price ballooned by 2268%—from Rs2.20 in July 2010 to Rs52.10 on January 2012.

 

Monotype India Ltd, supposedly into printing machines and allied equipment, was suspended from trading on the BSE in 2007 for non-compliance with listing agreement. However, it got its suspension revoked in April 2010. According to the document submitted to the BSE by the company, its printing operations have been suspended. After revocation, the company had violated SEBI’s SAST regulations and got away with an adjudication order of Rs1.50 lakh passed in July 2011. Despite such a host of violations and irregularities, the company merrily continues to be listed. Obviously, a lot of people are interested in the stock being listed because one can manipulate such stocks at will. Monotype India’s share price ballooned from a low of Rs5.05 to a high of Rs211.9, a gigantic 4096% move, over just one year— from March 2011 to June 2012. This is a company with no revenues whatsoever; which has been suspended in the past and, yet, whose stock is freely manipulated.

 

If you think SEBI is out to protect you against habitual offenders and the stock exchanges are there to monitor listed companies, perish the thought. The regulator’s job is to ensure a level playing field for companies and investors alike and provide a safe environment for investors. Unfortunately, often, this is not the case. In all these examples, the market regulator and the stock exchanges could have acted on their own because they have a whole department that is supposed to monitor suspicious price movements. But, they have not bothered.

 

Rampant Manipulation of Small Stocks    

The bigger scandal in smaller companies with poor fundamentals, which are going up 10-100. Prism Informatics was known as Akruti Holdings in 2010 and is supposed to be engaged in software development. At that time, the stock had been hitting the upper circuit with just one or two trades! It zoomed up 29,348%, in just a matter of two years, all the way from a low of Rs0.29 on 15 September 2009 to a high of Rs85.4 on 22 September 2011, on a handful of trades. Volumes picked up only when the share price started to fall. It has fallen by 63% since. Who can make sense of this rollercoaster ride?

Changing the company name is a common practice to fool minority shareholders and to disguise past transgressions. Out of City Travel Solutions was Tilak Finance. The company was also suspended for non-compliance with listing norms. However, the suspension was soon revoked. The share price ballooned by 2268%—from Rs2.20 in July 2010 to Rs52.10 on January 2012.

Monotype India Ltd, supposedly into printing machines and allied equipment, was suspended from trading on the BSE in 2007 for non-compliance with listing agreement. However, it got its suspension revoked in April 2010. According to the document submitted to the BSE by the company, its printing operations have been suspended. After revocation, the company had violated SEBI’s SAST regulations and got away with an adjudication order of Rs1.50 lakh passed in July 2011. Despite such a host of violations and irregularities, the company merrily continues to be listed. Obviously, a lot of people are interested in the stock being listed because one can manipulate such stocks at will. Monotype India’s share price ballooned from a low of Rs5.05 to a high of Rs211.9, a gigantic 4096% move, over just one year— from March 2011 to June 2012. This is a company with no revenues whatsoever; which has been suspended in the past and, yet, whose stock is freely manipulated.

Stock rigging is not the only evidence of poor monitoring by SEBI. Companies often get away with blue murder, leaving shareholders in the lurch. Consider Geodesic Ltd, a sham internet software and service provider, that had run up liabilities of more than Rs1,200 crore and defaulted on payment of its Foreign Currency Convertible Bonds (FCCB) and loans. SEBI never took any action (http://www.moneylife.in/article/sebi-asleep-over-geodesic-scam/36523.html ) against Geodesic and finally the Bombay High Court issued a winding up order against the company (http://www.moneylife.in/article/geodesic-gets-winding-up-order-from-bombay-hc/38398.html ). Following orders from the High Court, the Registrar of Companies (RoC), Maharashtra, appointed an official liquidator to wind up Geodesic.

Do check out the Unquoted section of the magazine and website (http://www.moneylife.in/investing/unquoted ). You will be alarmed and shocked to see the ease with which price manipulation goes on in capital markets.

If you think SEBI is out to protect you against habitual offenders and the stock exchanges are there to monitor listed companies, perish the thought.  The regulator’s job is to ensure a level playing field for companies and investors alike and provide a safe environment for investors. Unfortunately, often, this is not the case. In all these examples, the market regulator and the stock exchanges could have acted on their own because they have a whole department that is supposed to monitor suspicious price movements. However, they have not bothered.

What is galling and equally scandalous is the fact that tens of crore have been spent by SEBI on a fancy Inter-Market Surveillance System (IMSS) to catch stock manipulators. In August 2014, SEBI Board discussed a report on all actions taken by the market regulator, as a result of its market surveillance.

This is the same SEBI, which last year in June, declined to provide information on its real time market surveillance system (http://www.moneylife.in/article/sebi-says-dont-have-info-on-surveillance-system-and-prosecution/33071.html ). Moneylife had filed an application under the Right to Information (RTI) Act on 9 April 2013, requesting information on SEBI’s surveillance statistics and had asked SEBI to disclose the number of suspicious cases its sophisticated Integrated Market Surveillance System (IMSS) and Data Warehousing Business Intelligence System (DWBIS) had detected till 31 March 2013.

In its reply, the SEBI said, “It is informed that the information sought by you is not available with the concerned department of SEBI.” This was impossible, because if the surveillance department did not have such information, then who did? Who was really in charge of monitoring the data captured by the surveillance department?

It must be noted here, that SEBI had spent a whopping Rs50 crore in installing the so called “state-of-the-art” surveillance systems: IMSS and the more modern DWBIS.

Coming back to SEBI's surveillance system, Moneylife had found out that 48 staff members are posted in the Integrated Surveillance Department (ISD) of SEBI, which houses the IMSS and DWBIS system, as of 31 March 2013. The IMSS contract value was found out to be Rs20.55 crore, out of which Rs6.52 crore went towards “capital expenditure” between 2007 and 2010. HCL Technologies was the vendor.

Then SEBI adopted another system known as DWBIS, which came into existence from 2010 onwards, and the contract value was found to be Rs34.38 crore and Tata Consultancy Service (TCS) is the new vendor. Out of this amount, over Rs11 crore has gone towards “capital expenditure” in the last two years alone. This is collectively over Rs50 crore of taxpayers’ money.

This is a lot of taxpayers’ money and nobody knows if SEBI is truly looking at cases triggered by the systems, if at all, let alone punishing offenders and compensating minority shareholders. Nobody knows how effective SEBI’s surveillance system is either.

User

COMMENTS

Dayananda Kamath k

2 years ago

Now sebi has been given the power to regulate ponzi schemes. but how effective it can be. because of conflict of interest. unit 64 was the biggest ponzi scheme run by uti a govt undertaking, may be that is the reason there are various ponzi schemes prevailing in the country. now almost all sebi heads were from uti including the present one. will they not hesitate to initiate action when in the past they have done the similar transactions in uti.

Raghunathan Batherikkal

2 years ago

If SEBI is under FINANCE MINISTRY I plead Mr. Jaitley to throw this SEBI in the fathom of Pacific ocean with its boss and reconstitute a new mechanism with sharp tooth and nail than this scare crow.

Dayananda Kamath k

2 years ago

sebi can not solve simple complaints effectively then how can it resolve the complex cases. many a brokers do not transfer the shares to demat when corporate action of rights issue is there or demerger so that you loose right and unlisted demerged company will not be reflected in any statements and they do not transfer it to demat after crediting as it is barred by peculiar rule of sebi.
a company has termed right issue applications in two folios as multiple application and rejected. a company has rejected rights even though it has reached them well in advance as per postal proof but denied as late receipt. and complaint to sebi is of no use as any vague reply or seeking information by company copy marked to them is considered as closure of issue. so what is their credibility in complex cases.

Mahesh S Bhatt

2 years ago

RIL merger with RPL created undue gains to comapny worth 10000 crores/Essar Oil delisting is another case Small investors getting raw deal.ADAG RPower was a shocker where IPO SEBI approved worth Rs 429/ & stock opened at 100 plus forgot the rate made windfall 81000 crores.Later gave bonus but still shareholders are suffering.

Challenge is who will bell the big cats.

Like USA had Rajat Gupta/Ratnaraman/Madoof sentenced we should get stricter norms.

Today retail investor is less than 3% & FII's are big manipulators.

Main Street Economy is growing at 3-5 % but Stocks are growing at 100% its visible manipulation at global levels but how do we correct?Experts should find the way.or they say Stock Investments are dead only speculations live & men get buried.

Read Values for Wealth at http://www.youtube.com/user/kirtidabhatt & reset the systems before we head for another corrections.

Mahesh

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