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Showing posts from November 1, 2009

Directive on PSU listing opens disinvestment tap

Proceeds to directly fund social sector schemes till March 2012. Big push All listed, profit-making units to meet the mandatory minimum of 10 per cent public ownership. All unlisted profitable PSEs have to get listed.Eligible candidates include behemoths such as NMDC, MMTC, Neyveli Lignite Corporation, Rashtriya Chemicals and Fertilizers, National Fertilizers, Coal India, BSNL and Engineers IndiaOur Bureau New Delhi, Nov. 5 Giving its disinvestment programme a big push, the Centre has asked all listed, profitable central public sector enterprises (CPSEs) to meet the mandatory listing norm of at least 10 per cent public ownership. It has also asked all unlisted CPSEs with positive networth, no accumulated losses and a net profit track record in the three preceding consecutive years to get listed. Both these decisions are likely to lead to a slew of equity offerings including follow-on public offerings (FPOs). The eligible candidates include behemoths such as NMDC, MMTC,…

By Kutumba Rao - Nov 2, 2009

It's time to focus on earnings visibility November 2nd, 2009 By C. Kutumba Rao

Spooked by the hawkish stand of the Reserve Bank of India in its mid-year policy review, none too enthusiastic results, scepticism over the global recovery, markets fell like a set of bowling pins during the week ended. On the Bombay Stock Exchange, the Sensex tumbled by 915 points to end the week at a two-month low below 16,000-level at 15,896 and the Nifty on the National Stock Exchange crashed by 285 points to close at 4,712.The sell off was broad based with realty, banking, oil and gas and metals being the worst hit. The five per cent to 15 per cent correction that many people have been calling for since the summer is finally in place, say old timers. With the end of results season, it is time to pick the companies that have shown good performance and have good earnings visibility for next few quarters.It is pertinent to note that both domestic institutions and FIIs were buyers on Friday, the day whe…

mulling proposal for fewer trading holidays

MUMBAI: Market regulator SEBI is looking into a proposal by several investors to allow fewer trading holidays on stock exchanges in line with the global practice. "SEBI is actively considering the proposal to reduce the trading holidays at bourses and is likely to take a decision on the matter soon," an official close to the development said. According to analysts, this move by Securities and Exchange Board of Ind ia (SEBI) will increase the trading volume in domestic bourses and would also attract foreign investors. SMC Capitals Equity Head Jagannadham Thunuguntla said, "From the global standards, India has more number of trading holidays. The reducing of holidays would increase the participation of investors, including the foreign ones, and would increase the tradi ng volume," he said. For 2009, the Bombay Stock Exchange has 19 listed trading holidays and these exclude the weekly Saturday and Sunday off. In developed countries the trading holiday at…

Rural Electrification Corp: Buy

Fresh investments can be considered in the stock of Rural Electrification Corporation (REC), a navratna public sector undertaking, which finances all the segments across the power value chain. Secured advances with a high asset quality (net non-performing assets of almost zero) coupled with sustainable spreads are the key positives for REC when compared to most finance companies. Even after gaining more than 165 per cent this year, the company's stock is trading at a modest 12 times its estimated FY10 earnings (assuming 15 per cent equity expansion post-offer) and at 1.6 times its estimated book value. A power sector debt funding requirement of more than Rs 15 lakh crore over the Eleventh and Twelfth Plans is the major growth driver for REC. Its proposed follow-on public offer will augment the capital base, enabling balance sheet expansion. The Reserve Bank of India's recent policy change which pegs bank's risk weights to the borrowers credit rating, will also f…