Share prices in a strong uptrend: Monday Closing Report

Sensex and Nifty poised to give up some gains after a sustained five-day rally  

A minor contraction in the Asian markets in morning trade saw the Indian market open lower. The Sensex opened 16 points down at 18,800 and the Nifty was off by nine points at 5,645. Select buying soon lifted the indices higher, but profit booking took them to the day's lows, with the Sensex dropping to a touch below its opening level and the Nifty to 5,643. While the market witnessed a bounce-back, there was volatility associated with the futures and options contract due later in the week.

The indices crossed their psychological levels a little after 2pm, with the Sensex surging past the 19,000 mark and the Nifty breaching 5,700 levels. The last time the Sensex and Nifty touched those levels was towards the end of January. However, the indices could not sustain the high levels and came off the day's highs in late trade, still managing a positive closing for the fifth day in a row. The Sensex closed at 18,943, a gain of 127 points over last week's close and the Nifty was up 33 points at 5,687. The advance-decline ratio on the National Stock Exchange was 839:883.

The Sensex has added 1,104 points in the current rally, which began on 22nd March, while the Nifty has gained 322 points since the upmove started.

Although the broader indices also closed higher, they underperformed the Sensex with the BSE Mid-cap index climbing 0.42% and the BSE Small-cap index rising 0.12%.

In the sectoral space, BSE Auto (up 1.52%), BSE Capital Goods (up 1.27%), BSE Bankex (up 1.21%) BSE Fast Moving Consumer Goods (up 0.86%) and BSE Consumer Durables (up 0.61%) were the top gainers. BSE Healthcare (down 1.17%), BSE Realty (down 0.56%) and BSE Metal (down 0.29%) were losers.

Tata Motors (up 3.25%), Bharti Airtel (up 2.57%), Larsen & Toubro (up 2.56%), Reliance Infrastructure (up 1.76%) and Maruti Suzuki (up 1.69%) were the top performers in the Sensex list. Jaiprakash Associates (down 2.16%), Reliance Communications (down 1.50%), Sterlite Industries (down 0.89%), Infosys Technologies (down 0.71%) and DLF (down 0.66%) were the major losers on the index.

The telecom ministry has said that it will take a final decision on second generation (2G) spectrum pricing and on those holding airwaves beyond the contracted limit of 6.2 Mhz, based on recommendations of the Telecom Regulatory Authority of India (TRAI), within the next three months, before seeking the Telecom Commission's approval.

Last month, the telecom regulator had recommended an over six-fold increase in the spectrum price to Rs10,972.45 crore for a pan-India license with 6.2 Mhz spectrum, as compared to the current Rs1,658 crore. In fact, the regulator had classified the valuation of spectrum in two categories. There are different prices for spectrum up to a contracted limit of 6.2 Mhz and for additional airwaves.

Markets in Asia closed mostly lower, following fresh concerns over higher radiation levels in and around the damaged nuclear plants in northern Japan. Financials in China were boosted on hopes of good quarterly numbers, while technology stocks pulled down the Taiwanese market on speculation that the ongoing debt crisis in Europe would dampen demand. South Korean steelmaker Posco's plan to hike prices on escalating input costs helped the Seoul Composite close higher.

The Hang Seng lost 0.39%, the Jakarta Composite fell 0.12%, the KLSE Composite shed 0.09%, the Nikkei 225 declined 0.60%, the Straits Times was down 0.44% and the Taiwan Weighted fell by 0.67%. On the other hand, the Shanghai Composite gained 0.21% and the Seoul Composite rose 0.11%.

Back home, foreign institutional investors were net buyers of stocks worth Rs1,446.18 crore on Friday, whereas domestic institutional investors were net sellers of  Rs313.77 crore.

Reliance Industries (down 0.26%) has not kept its commitment on drilling wells in the eastern offshore KG-D6 field that has seen a drastic fall in production, director general of hydrocarbons (DGH) SK Srivastava said today.

Reliance had committed to drill 22 wells on the Dhirubhai-1 and Dhirubhai-3 fields-the largest of the 18 gas discoveries in block KG-DWN-98/3 (or KG-D6 block) in the Bay of Bengal, by April 2011, to produce 53.4 million metric standard cubic metres of gas per day (mmscmd). Another 8-9 mmscmd output was to come from the MA oilfield in the same block, taking the total output committed in the Field Development Plan (FDP) to 61.88 mmscmd by April 2011.

Against this, it has so far drilled and completed 18 production wells on the D1 and D3 fields giving a combined output of about 42 mmscmd, the DGH said.

Kamat Hotels India (KHIL) (down 4.52%) today announced the merger of its restaurant business, Kamat Restaurants, and its Lotus Resorts units in Murud and Goa with the parent company. The amalgamation will be done on the basis of valuation by an independent valuer, subject to compliance with regulatory requirements and approval of the competent court.

While the restaurant business is run by Kamats Restaurants Pvt Ltd, Lotus Resorts, Murud, is operated by Kamat Holiday Resorts Pvt Ltd and Lotus Resorts, Goa, by Kamats Holiday Resorts (Silvasa) Ltd.

Mawana Sugar (down 3.25%) is planning to double its branded sugar output to 20,000 tonnes in FY11-12. The company which sells branded sugar in the northern regions is planning to venture into the premium range in May.

After stabilizing its business in Mumbai, the company is planning to enter cities like Pune, Nagpur and Goa. The firm will also go in for a pan-India presence in 18 months. Mawana Sugars expects its total sugar output in FY12 to be 300,000 to 350,000 tonnes.


Controversial Helios & Matheson plans to raise Rs500 crore

The networking, software, e-business services company was recently penalised by SEBI for making favourable statements to influence its stock price

Helios and Matheson Technology (H&M), the controversial company which was recently slapped with a fine of Rs50 lakh by the Securities and Exchange Board of India (SEBI) in a share price rigging case, is now planning to raise Rs500 crore.

In a filing to the National Stock Exchange (NSE) on 23 March 2011, giving details of its recently held annual general meeting, the company said that it is constantly looking for growth opportunities to become globally competitive and it considers it necessary at this time to raise some of the funds it requires through an issue of securities.

On 31 January 2011, SEBI imposed a penalty on H&M over some fake and favourable announcements that the company had passed on to the stock exchange in order to influence the movement of the stock price. In its show-cause notice to the company, SEBI said, "H&M had made various favourable corporate announcements during the investigation period, that is about the issue of bonus shares, dividend, and declared favourable unaudited quarterly results, etc, besides the announcement of acquiring three entities of vMoksha Technologies Pvt Ltd."

SEBI had also charged the company with not disclosing the status of the profitability of vMoksha companies that it allegedly acquired. The SEBI order said that H&M "failed to make announcements/disclosures with regard to price-sensitive information" and "had not informed the stock exchange about the interim developments such as (the fact that) its attempt to acquire three vMoksha companies had not materialised in the stipulated time period, i.e. within 120 days as specified in the SPA (share purchase agreement) and the judicial/arbitration proceedings which started in relation to the same."

Last week, H&M informed the NSE that it "has been examining various growth opportunities from time to time, in line with its objective of becoming globally competitive. While it is envisaged … thought prudent at this stage for the company to raise a part of this fund requirement through the issue of securities in the domestic/international market…"

It further stated that it is therefore, "proposed to issue appropriate securities for an amount not exceeding Rs500 crore in one or more tranches in such form on such terms…the number of equity shares and or fully/partly convertible or non/convertible debentures…provided the issue price of equity shares to be issued on conversion of debentures or upon exercising the rights of entitlement…determined by the board."

Moneylife has earlier reported about financial irregularities in the acquisition of vMoksha by H&M. The battle started in 2005, when H&M announced a $19 million buyout of vMoksha, co-founded by Rajeev Sawhney and Pawan Kumar (former CEO of the controversial DSQ Software). Mr Sawhney put in the money and Mr Kumar managed the operations. (Read, Helios & Matheson under the scanner, )


IDBI Federal targets HNIs with Wealthsurance Premier

IDBI Federal Wealthsurance Premier Insurance Plan is a single premium ULIP designed keeping in mind specific requirements of the HNI class

Seeking to target high net worth customers, private insurer IDBI Federal Life insurance has launch its wealth-building plan, IDBI Federal Wealthsurance Premier Insurance Plan.

The product is a single premium ULIP, with a wide array of investment funds and protection benefits bundled in a low charge structure aimed to deliver one of the best-in-class returns in this category.

GV Nageswara Rao, MD and CEO of IDBI Federal Life Insurance, said: "Wealthsurance Premier is a great combination of a wealth and protection plan that assists the customers in wealth creation and management in the long term. With Wealthsurance Premier, we have customised the product to suit the HNIs by making it a single premium plan that allows one to build wealth for the long term in tranches, with the flexibility of 13 varied investment fund options across the risk-return continuum for active wealth management."

Wealthsurance Premier can insure HNI's wealth plan against death, 13 accidental injuries, 17 major diseases, and serious illnesses requiring hospitalisation or disablement which prevents engaging in an income-earning activity."

IDBI Federal Wealthsurance Premier Insurance Plan is a single premium ULIP designed keeping in mind specific requirements of the HNI class. With a minimum investment option of Rs5 lakh and top-ups at Rs10,000, the plan has low and level charges. There is no policy administration and allocation charges for premiums above Rs25 lakh. The minimum policy term is for 5 years and maximum of 75 years less the age of entry.

To illustrate, at a gross rate of 10% return, due to one of the lowest charges Wealthsurance Premier can deliver 8.53% IRR (without considering mortality charges and service tax) and an IRR of 7.83% (after considering mortality charges and service tax for a Rs1.25 crore insurance cover) for a Rs25 lakh premium for a term of 15 years.

Wealthsurance Premier offers a wide range of investment options like assured returns, variable returns linked to market performance or returns linked to equity market but with protection of capital. Also, tax benefits are availed on the contributions, returns and benefits under sections 80C and 10(10D). In effect, Wealthsurance Premier is a tax-free wealth management account as money put into it grows without any tax. One can also look at this product for gifting a life time of savings to children or grand children.


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