Stocks
Sensex, Nifty may stage a small rally: Weekly Market Report
Nifty has to hold this week’s low for the rally

The S&P BSE 30-share Sensex closed the week that ended on 11th July at 25,024 (down 938 points or 3.61%), while the NSE’s 50-share CNX Nifty closed at 7,460 (down 292 points or 3.77%) for the week. This week was eventful with lot of positive anticipation from the budget.
 
On Monday, after a volatile session ended, the market was in the green for the second consecutive session. The ministry of Petroleum and Natural gas clarified after market hours on 4 July 2014 said that it is not proposing any increase in prices of subsidised LPG and kerosene prices after certain media reports speculated about the possibility of increase in the prices of subsidised LPG and PDS Kerosene. Railway Minister Sadananda Gowda was to present the final Railway Budget for 2014-15 in Lok Sabha on Tuesday. Nifty closed at 7,787 (up 36 points or 0.46%).
 
On Tuesday, after trading in a range for considerable time, the indices started moving lower. The railway budget did not go well with the market. Nifty made the highest percentage loss since 3 September 2013 closing at 7,623 (down 164 points or 2.11%). One of the steps in the rail budget was that the rail ministry is seeking Cabinet nod to allow foreign direct investment in the sector.
 
The market gave up further gains on Wednesday as well. The Economic Survey for 2013-14 given out on the day predicted a recovery in India's economic growth in 2014-15. It forecast 5.4% to 5.9% growth in GDP in 2014-15, compared with 4.7% expansion in 2013-14. Nifty closed at 7,585 (down 38 points or 0.50%).
 
The much awaited budget for 2014-15 on Thursday was not able to boost the market sentiments. The market closed in the negative for the third consecutive session after a hugely volatile intraday trading. Nifty closed at 7,568 (down 17 points or 0.23%).
 
On Friday, after the budget details were digested, the indices fell again. Nifty closed at 7,460 (down 108 points or 1.43%). Morgan Stanley has raised its June 2015 target for the Sensex by 9% to 28,800, saying the budget would help revive investor sentiment and boost earnings. The Index of Industrial Production for the month of May came in at 4.7% versus 3.4 % month-on-month. However, core industry growth for May slowed to 2.3% versus 4.2% month-on-month and 5.9% year-on-year.
 
For the week, among the other indices on the NSE, the top two performers were FMCG (1%) and IT (1%) while the worst two performers were PSU Bank (12%) and Nifty Midcap 50 (12%).
 
Among the Nifty stocks, the top five stocks for the week were IDFC (11%); Sun Pharma (5%); ITC (4%); Hindustan Unilever (3%) and Infosys (2%) while the top five losers were Bhel (15%); Jindal Steel & Power (14%); NMDC (13%); Punjab National Bank (11%) and Bank of Baroda (11%).
 
 Of the 1,452 companies on the NSE, 159 companies closed in the green, 1,283 companies closed in the red while 10 companies closed flat.
 
Out of the 27 main sectors tracked by Moneylife, top five and the bottom five sectors for this week were:

ML Top sector

 

ML Worst sector

 

Consumer Products

-1%

Farm & Farm Inputs

-6%

Financial Services

-1%

Textiles

-6%

Software & It Services

-1%

Energy

-6%

Pharma

-2%

Lifestyle & Leisure

-5%

Hotels

-2%

Banks

-5%

 

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Sensex, Nifty will try to rally– Friday closing report
Nifty may rally if today’s lows hold

A day after the budget the Indian market had a quiet opening Friday and was trading flat up to around 11am. However, thereafter, the indices fell sharply as the details of a ho-hum budget started to sink in. The S&P BSE Sensex opened at 25,489 while the NSE's CNX Nifty opened at 7,584. After hitting the day’s high at the beginning of the session at 25,548 and 7,626, both the Sensex and Nifty, moved lower to hit a low at 24,978 and 7,447, respectively. Sensex closed at 25,024 (down 348 points or 1.37%) while Nifty closed at 7,460 (down 108 points or 1.43%). The NSE recorded a volume of 113.84 crore shares. India VIX fell 1.52% to close at 15.7225.
 
The government unveiled industrial production data for May 2014 today. The Index of Industrial Production (IIP) for the month of May came in at 4.7% versus 3.4 % month-on-month. Electricity sector growth came in at 6.3% against 11.9% MoM. Manufacturing sector growth too jumped to 4.8% versus 2.6% in April. Mining sector growth too improved at 2.7% against 1.2% MoM. However, core industry growth for May slowed to 2.3% versus 4.2% month-on-month and 5.9% year-on-year.
 
Infosys, which came out with its result today posted a net profit of Rs2,720 crore for the quarter ended June 2014 as compared to Rs2,250 crore for the quarter ended June 2013. Revenue increased from Rs9,959 crore for the quarter ended June 2013 to Rs 11,319 crore for the quarter ended June 2014. On a consolidated basis, the company posted a net profit of Rs2,886 crore for the quarter ended June 2014 as compared to Rs2,374 crore for the quarter ended June 2013. Revenue has increased from Rs 11,267 crore for the quarter ended June 2013 to Rs12,770 crore for the quarter ended June 2014. The guidance is unchanged compared to the one given at the time of announcement of March 2014 quarter result. The guidance in rupee terms has also been kept unchanged. The company expects its revenue to grow 5.6%-7.6% in rupee terms in FY 2015.
 
Morgan Stanley has raised its June 2015 target for the Sensex by 9% to 28,800, saying the budget would help revive investor sentiment and boost earnings. It expects Sensex earnings growth to be 13.5% for FY15, 22.7% for FY16 and 23.4% for FY17.
 
Sun Pharma (2.28%) was top gainer in the Sensex 30 pack while Hindalco, the top gainer in the Sensex 30 stock yesterday, was among the top two losers (5.59%) today.
 
Aurobindo Pharma (3.90%) was the top gainer in the ‘A’ group on the BSE. The company saw the increase in the FII holding this quarter from 23.74% in March 2014 to 27.59% in June 2014. On the other hand DII holding fell to 7.73% from 9.85% in the relevant period.
 
Power Finance (10.47%), among the top three losers in the ‘A’ group on the BSE, saw the DII holding falling to 10.42% from 11.02% in June 2014 quarter from March 2014 quarter.
 
US indices closed in the negative on Thursday. Except for Shanghai Composite (0.42%) and Straits Times (0.74%) all the other Asian indices closed in the red. Jakarta Composite (1.28%) was the top loser.
 
European indices were trading in the green. US Futures were trading marginally higher. Portugal's largest bank missed payments to bondholders, which has sparked concerns that banking sectors in the euro zone periphery may be in trouble.

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MCA clarifies on e-filing of MGT-14

Subsequent to this clarification, Corporate can proceed with any school of thought and stay assured of the form MGT-14 getting approved.

The Ministry of Corporate Affairs (MCA) recently issued clarifications on compliance filings regarding resolutions and agreements for companies. There had been many confusions stemming from the new Companies Act which was passed in 2013. Since the new government took over, the MCA has been issuing various Circulars, notifications and removal of difficulty orders to the 2013 law. The latest one being the decision to approve e-Form MGT-14 through Straight Through Process (STP) mode, except in case of certain matters, in order to ensure timely disposal of e-Forms.

MCA vide General Circular No 28/2014 dated 9 July 2014 issued a clarification that MGT-14 filed for purposes specified under Section 117 of the Companies Act, 2013 (Act, 2013) will be processed and taken on record using the STP mode with effect from 21 July 2014. However, MGT-14 filed for matters viz. Change of Name, Change of Object, Resolution for further issue of capital and Conversion of companies will be taken on record post the same is approved by concerned Registrar of Companies (RoC) official.

As we all are aware that Section 117 of Act, 2013 mandates filing of Form MGT-14 for various matters, which were already covered under Section 192 of the Companies Act, 1956. However, Section 117 additionally covers matters transacted under Section 179 (3) of Act, 2013 which is a list of 19 items. This step from the MCA for clearing the form filed for such matters through STP, will provide relief to Companies, as one need not worry about the approval of the forms filed.

Additionally, Companies in certain states were facing lot of difficulty in getting Form MGT-14 approved, especially the ones which were filed for taking note of disclosure of director’s interest and shareholding under Section 179 (3) (k) read with Rule 8 (5) of Companies (Meetings of Board and its Powers) Rules, 2014. One school of thought mandated attaching Form MBP-1 along with MGT-14 while another school of thought allowed attaching of only the copy of the Board resolution.

Subsequent to this clarification, Corporate can proceed with any school of thought and stay assured of the form MGT-14 getting approved. While this will not reduce the compliance burden of the secretarial team but will surely provide some relief.

Articles you may want to read:

Compliance issues for Indian companies incorporated abroad, under the New Companies Act

New Companies Act Damns Private Companies

MCA proposes relaxing Companies Act provisions for private companies

Will Companies Act 2013 turn MNC units into public companies?

Will the Companies Act 2013 impede MSMEs from bond markets?

(Vinita Nair is a practising Company Secretary at Vinod Kothari & Co, and can be contacted at [email protected])

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COMMENTS

Mann Chawla

2 years ago

Res. Mam

Pls Confirm that ADT 1 is Mandatory in Case of First Auditor is appointed by Board of Directors Under Sec. 139(6) of Company Act, 2013

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