Tuesday’s Market Preview: Cautious opening on the cards

The domestic market is likely to open on a cautious note today as its Asian peers were mostly higher in early trade taking cues from the US markets that ended higher on a lower dollar and hopes that the US Federal Reserve will announce steps to boost the economy. The SGX Nifty was down 12.50 points at 6,124 over the close of 6,136.50 on Monday.

The expiry of the October futures and options (F&O) series on Thursday is expected to induce some volatility in the Indian market. Besides, corporate earnings reports will also play a role in directing the market.

The Indian market opened firm yesterday tracking global cues and positive reports from local companies that have declared their quarterly earnings numbers so far. Early gains were supported by across-the-board buying. The market traded in a narrow range after touching the day's peak in late morning trade. However, investors resorted to profit-booking at higher levels, resulting in the indices giving up part of their morning gains but ending the day in the positive zone. The Sensex ended 137.26 points (0.68%) higher at 20,303. The Nifty closed at 6,106, up 39.75 points (0.66%).

Wall Street ended higher overnight on a lower dollar, which increased the appetite for riskier assets like stocks and commodities. Hopes that the US Federal Reserve will announce steps to boost the economy also supported the gains. In other news, existing-home sales rose by more-than-expected in September. Sales of existing homes increased 10% to an annual rate of 4.53 million, according to the National Association of Realtors.

The Dow gained 31.49 points (0.28%) to 11,164. The S&P 500 added 2.54 points (0.21%) to 1,185. The Nasdaq rose 11.46 points (0.46%) to 2,490.85.

Markets in Asia were mostly higher in early trade today, spurred by gains in the US markets and optimism in the region — fuelled by the takeover news of the Australian Securities Exchange (ASX) by the Singapore Exchange (SGX).

The Shanghai Composite was up 0.45%, the Hang Seng gained 0.42%, KLSE Composite added 0.10%, Seoul Composite rose 0.08% and Taiwan Weighted was up 0.30%. On the other hand, the Nikkei 225 declined 0.24% and Straits Times shed 0.23%. The SGX Nifty was down 12.50 points at 6,124 over the close of 6,136.50 on Monday.

In the face of flooding of IPOs, the Securities and Exchange Board of India (SEBI) on Monday doubled the limit for retail investors to Rs2 lakh and tightened the norms for firms to guard against unnatural hyping of the issues. The market regulator also paved the way for public offerings by insurance companies by issuing disclosure and accounting norms.

Addressing journalists after a meeting of the SEBI Board, Mr Bhave discussed issues ranging from abuse of issuance of preferential share norms in favour of promoters, to the role of the media and agencies generating coverage for public issues where risk factors are virtually hidden. He, however, said that some more time would be needed to revamp the norms for acquisition of listed firms.

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Coal India issue price fixed at Rs245 a share

New Delhi: The government today fixed the issue price for Coal India Ltd’s mega IPO at Rs245 per share, at the upper end of the initial offer price range, PTI reports. The government would fetch over Rs15,000 crore with the issue of 63.16 crore shares of Coal India at a price of Rs245 a share, coal minister Sriprakash Jaiswal said after a meeting of the Empowered Group of Ministers (EGoM), headed by finance minister Pranab Mukherjee, this evening.

“It was a grand success. It happened for the first time in the history of India,” Mr Jaiswal said. Besides Mr Jaiswal and Mr Mukherjee, home minister P Chidambaram and Planning Commission deputy chairman Montek Singh Ahluwalia were the also part of the EGoM. The Board of Coal India also met subsequently to approve the issue price. There will be a discount of 5% for retail investors.

Coal India is expected to list on the stock exchanges on 4th November, the day before Diwali. The company’s initial public offer, which closed on 21st October, made history after it was oversubscribed 15.17 times mopping up Rs2,35,290 crore. The IPO, which had a price band of Rs225-245 a share, garnered total demand for over 960.36 crore shares, as against 63.16 crore shares on offer.

The public offer is part of the disinvestment programme of the government, which aimed to raise about Rs15,400 crore through the sale of a 10% stake in the company. The government holds 100% equity in Coal India. This share sale is expected to be followed by similar IPOs by Powergrid, Hindustan Copper, Manganese Ore India and SAIL.

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SEBI clears more shares for retail, IPO norms for insurers

Mumbai: In the face of flooding of IPOs, the Securities and Exchange Board of India (SEBI) today doubled the limit for retail investors to Rs2 lakh and tightened the norms for firms to guard against unnatural hyping of the issues. The market regulator also paved the way for public offerings by insurance companies by issuing disclosure and accounting norms, PTI reports.

Addressing journalists after a meeting of the SEBI Board this evening, SEBI chairman C B Bhave discussed issues ranging from abuse of issuance of preferential share norms in favour of promoters, to the role of the media and agencies generating coverage for public issues where risk factors are virtually hidden. He, however, said that some more time would be needed to revamp the norms for acquisition of listed firms.

“The Board decided that the maximum application size for retail individual investors may be increased to Rs 2 lakh across all issues,” Mr Bhave said.

 The market regulator also asked the companies coming out with IPOs to come clean on their media coverage in the run-up to the public issue by making adequate disclosures with the regulator and investors about all the news reports. The provision is meant to ensure that the information appearing in the media is consistent with the disclosures made in the public offer document.

 “The Board (has) decided that the merchant bankers may submit a compliance certificate as to whether the contents of the news reports that appear after filing of draft offer document are supported by disclosures in the offer document or not,” Mr Bhave said. SEBI also asked the companies to announce a fixed date for payment of dividend and issue of bonus shares for the benefit of investors.

While clearing the much-awaited norms for insurance IPOs, the market regulator also paved the way for rights shares issuances for companies listed in India through Indian Depository Receipts (IDRs). “In order to ensure uniform treatment for all classes of investors in rights issues, the Board decided that only one payment option may be given by the issuer to all the investors, that is either (i) part payment on application with balance money to be paid in calls or (ii) full payment on application. The Board also decided that where the issuer opts for part payment, it shall be incumbent on them to obtain approvals, if any, as may be necessary for the purpose,” he said.

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