Thursday, March 20, 2008
The Securities and Exchange Board of India (Sebi) on Wednesday said short-selling and securities lending and borrowing will be operationalised from April 21.
The circular asked stock exchanges and depositories to make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the decision, bring the provisions of the circular to the notice of the member brokers/clearing members, depository participants and communicate to the Sebi the status of the implementation of the provisions of the circular in the monthly development report submitted to the market regulator.
Sebi had come out with a circular on December 20, 2007, specifying the broad framework for short selling by institutional investors and a full-fledged securities lending and borrowing scheme for all market participants.
In what could be a sign of things to come in Mumbai's overheated real estate market, two of the five plots at the Bandra Kurla Complex (BKC) put on the blocks have found no takers. While the development may cheer those who wish to buy new homes in Mumbai, the lukewarm response to the auction spells bad news for the seller i.e. the Mumbai Metropolitan Region Development Authority (MMRDA). According to reports, MMRDA received Rs13.22bn from two residential and one commercial plot as against Rs27.9bn the authority earned just three months ago for similar deals. Two plots, both with a reserve price of Rs 3 lakh per sq. m. - a 7,131 sq. m. commercial plot and a 6,402 sq. m. plot meant for a club house - had absolutely no takers. The third, a 5,951 sq. m. commercial plot, went to sole bidder Jet Airways for Rs8.26bn. Jet's winning bid of Rs3.44 lakh per sq. m. was about 10% more than MMRDA's asking price. Meanwhile, Starlight System - a collaboration of Ajay Piramal group and Suntech Realty - quoted three times MMRDA's asking price for two residential plots measuring 7,050 sq. m. The company beat eight other bidders by quoting a record price of Rs 3.52 lakh per sq. m., making it the biggest residential deal for MMRDA till date.
Reliance Industries Ltd. (RIL) said the company and its other group companies have complied with all rules and regulations. The Mukesh Ambani-owned RIL was reacting to media reports that capital market regulator SEBI was probing alleged insider trading in Reliance Petroleum shares. RIL said it will cooperate and provide all the necessary information to the concerned authorities. SEBI is investigating trading in Reliance Petroleum shares, the Minister of State for Finance Pawan Kumar Bansal said in the Rajya Sabha. "SEBI has informed that it has initiated an examination in the matter," Bansal said. The minister was responding to a question by SP leader Amar Singh on whether the Government has acted against the promoters or affiliates of RIL regarding insider trading activities in Reliance Petroleum. In November, RIL raised Rs40.23bn (US$1bn) by selling 4% stake in Reliance Petroleum. While actual date for the stake sale is not known, shares of Reliance Petroleum moved up sharply between late October and early November
Shares of Orchid Chemicals & Pharmaceuticals Ltd. plunged nearly 50% this week on news that two financial institutions had sold promoters' shares as they could not meet margin calls. On March 17, the stock tumbled 39.09% to Rs127.05 and lost another 10% on Tuesday to Rs113.60. On Wednesday, the stock closed 2% higher at Rs116. Kailasam Raghavendra Rao, founder and MD of the Chennai-based company said it incurred a personal loss of Rs 750mn after his lenders sold off 7.5% stake from his family's holdings on March 17. He denied market talk that the company has suffered forex losses. However, some industry analysts feared that the biggest danger is that the company could become a takeover target now that the promoters' stake in the company is just 17%. In March-April 2007, Rao borrowed around Rs 850mn from Indiabulls and Religare to raise the promoters' stake from 17% to 24%. Rao cleared his dues to the two lenders, but still owed nearly Rs 650mn to the FIs and his current stake is pledged to them. Commenting on the recent developments, Orchid Chemicals spokesperson said a combination of macro factors and market rumors contributed to the sudden negative sentiment on the stock.
|Company Name||Jan-Mar 2008||Jan-Mar 2007|
|Bank of India||191||150|
|Bank of Baroda||220||50|
|Central Bank of India||221||-|
|Larsen & Toubro||170||80|
|Mahindra & Mahindra||116||83|
The bulls are desperately hoping to March ahead as the F&O week is here. The long weekend will keep bulls and bears closely glued to global developments. The Fed rate cut and the rally across global markets failed to keep the momentum going in the Indian bourses. Lack of follow on buying is putting tremendous pressure at even slightly higher levels. Most market participants hope and expect this to be the near term bottom. While few incidents of forex losses and promoters leveraging are out in the open, the fear is many such cases may go unreported till something terrible happens. The Nifty will find support and comfort only above the 4,700 levels. The lower top and lower bottom trend on the daily charts may indicate a bearishness. But a few good days could cause a reversal in trend and perception.