SENSEX rises 400 pts | NIFTY up 122 pts as recession ease

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Bombay Stock Exchange's SENSEX index gained over 400 pts today as investors become bullish about recovering economic recession, NSE's NIFTY also closed up 122 pts as similar bullish sentiments were prevelant through out the trading sessions through out the day, Detailed and sector wise performace of the day of both SENSEX ans NIFTY is as follows :

Nifty ended at 4521.55, up 122.65 points or 2.79 per cent. The broader index touched a high of 4532.40 and low of 4405.95.

Sensex closed at 15237.94, up 394.82 points or 2.66 per cent. The index touched an intra-day high of 15264.84 and low of 14997.75.

BSE Midcap Index gained 2.38 per cent and BSE Smallcap Index moved 2.95 per cent higher.

Sectoral performance of BSE was as follow:

BSE Realty Index jumped 5.61 per cent higher, BSE Metal Index gained 4.34 per cent and BSE FMCG Index moved up 4.09 per cent.

Biggest gainers that propelled the 30-share Sensex were DLF (7.76%), Reliance Infrastructure (6.76%), Maruti Suzuki (6.63%), Hindalco Industries (6.2%) and ACC (5.96%).

India decides to launch interest rate futures

India decided to introduce exchange-traded interest rate derivatives to help corporates, banks and households guard against interest rates volatility, a move that came nine months after launching of exchange- traded currency futures.

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The derivatives would be based on the 10-year government bond yields, according to market regulator Securities and Exchange Board of India (SEBI) and banking watchdog Reserve Bank of India (RBI).

"Eligible exchanges desirous of offering interest rate futures may apply to SEBI after fulfilling the conditions," SEBI said in a release.

The conditions are given in a report by an RBI-SEBI joint panel and are approved by both the regulators.

The report said those having a networth of Rs one crore would become trading members and those with Rs 10 crore networth would be clearing members in interest rate futures.

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The contract would be settled by physical delivery, the panel said. The move will also help to develop the debt markets.

courtesy - economictimes

Fund raising through IPO's hits the bottom - 2008

India Inc's capital mobilisation through initial public offering has hit rock bottom as the total amount raised via this route in BSE 2008 aggregated to $ 4,509 million, the lowest in the last three years, says a report.

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Capital mobilisation through IPOs witnessed a fall both in terms of volume and value as only 44 transactions worth $ 4508.85 million were announced, global consultancy firm Grant Thornton said. Way back in 2005, however, there were as many as 64 such deals with an announced value of $ 5521.50, it added.

The total fund mopped up through IPO in 2008 was $ 4.51 billion, 18.34 per cent lower than the amount raised in 2005.Compared with 2007, fund raising has dipped by 54.55 per cent. Fund raising activity through IPO reached its peak in 2007, when a whopping $ 9920.65 million was garnered.

Though there was a fall in both value as well as volume terms but the year 2008 saw several large IPOs across the board including Reliance Power's $ 2.56 billion issue - the largest public issue of 2008, Grant Thornton added.

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The other big IPOs in the year came from Rural Electrification Corp, IRB infrastructure developers and KSK energy ventures each raising $ 410 million, $ 236 million and $ 208 million respectively. The amount of money raised in 2008 was $ 4.51 billion, compared with $ 9.92 billion and $ 5.89 billion in 2007 and 2006 respectively.

posted under - IPO updates, BSE updates, indian markets, indian inc updates, bse stocks, nse stocks, IPO in India, IPO futures

Investors to gain little from buybacks

If stock prices movements are an indicator, then investors are not happy with buybacks or share repurchase programmes initiated by companies. While the consensus view is that buybacks are positive as they are usually an indication that the company's management thinks the shares are undervalued, shares of none of the 11 companies whose share buybacks are open have gone up after the initiative was started, data shows.

Stocks of Reliance Infrastructure, SRF, Rain Commodities and DLF have fallen by as much 35-60% from the day the buyback was open and most companies have seen their stock value erode by an average 40% in the same period. All the buybacks are to be done through open market purchase.

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Though on the day of announcement, stocks might have usually reacted positively, stock prices of the same companies have mostly fallen by as much as 10-50% in the period between the buyback intention was first announced and when it actually started.

"What's in it for the ordinary investors, if the company is buying back at the prevailing price? Only the promoters appear to benefit from this peculiar situation as they are indirectly increasing their stake (since bought back shares will be extinguished ) and that too without using their own funds," B Madhuprasad of Keynote Corporate Services said.

Companies such as Amrutanjan, Godrej Consumer, EID Parry and Ipca Labs announced buyback plans in the last two days alone. While its true that shares of most companies are available at steep discounts (40%-80%) vis-a-vis their January peaks, since most of the purchases are done through open market, nonpromoter entities hardly stand to benefit from the scheme of things.

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Emerging market funds lose sheen

Major emerging market fund groups recorded outflows during the fourth week of August with EMEA (Europe, Middle-East, Africa) equity funds hit the hardest in percentage terms, according to Emerging Markets Portfolio Funds Research.

Investors pulled money out of the diversified Global Emerging Markets (GEM) Equity Funds for a fifth-straight week and extended Latin America Equity Funds’ losing run to 12 weeks and $4.1 bn. Since the second week of June, EPFR Global-tracked Emerging Market Funds have surrendered a net $23.1 bn, the note said.

Appetite for exposure to emerging markets has been eroded by a sharp correction in commodity prices during the current quarter, a string of downward revisions to economic growth forecasts and painfully high inflation rates in several key markets including Russia, India, South Africa and Argentina. Investors still have appetite for direct exposure to China, although the $175 mn they committed to China equity funds was more than offset by redemptions from Asia (excluding Japan) equity funds, Greater China equity funds, India equity funds and Taiwan equity funds.

The abrupt loss of enthusiasm for Russia, fueled by state pressure on firms in “strategic sectors” and the recent incursion into Georgia, has played a role with outflows from Russia equity funds since late June exceeding $800 million, the EPFR note says. And since late June investors have pulled nearly $4 bn out of the Emerging Europe equity funds, which currently maintain a 42% weighting to Russian equities.

- Economic Times