Atul Karmarkar.Com» Stock Market

Market timings change, NSE, BSE to open at 9 am from 18-Dec

Atul Karmarkar — Wed, 16 Dec 2009 17:08:11 +0000

The battle for the opening bell between the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) just got hotter as both now plan to start trading from 9 am beginning this Friday, December 18.

On Tuesday, the BSE had announced they would start 10 minutes earlier, from 9.45 am and this tit-for-tat has been on since then. Readers will recall that that on 23-Oct, the capital market regulator had said it would allow stock exchanges to keep their trading hours between 9 am to 5 pm (currently 9:55 am and 3:30 pm). That proposal of course is still hanging by a slender thread as in a recent survey of 418 BSE brokers, 79.4% (332 brokers) voted in favour of a status quo and keeping the timings unchanged.

However, brokers at both the exchanges said they were ok with this proposed advance in opening time to 9 am.

A lot of offices are going to be packed earlier than usual for sure now !

Update: This move to extend trading time by 55 minutes has been deferred to January 4 following strong opposition from market players, who felt they needed more time to adjust to the new timings, especially in a city like Mumbai, where their commuting routine would change. They also argued that it would be impossible to arrange for margin funds from clients if the banks weren’t open at that time.

Hindalco shareholders approve financial restructuring plan

Atul Karmarkar — Mon, 06 Apr 2009 16:36:27 +0000

Hindalco informed the BSE that it’s shareholders have approved the financial restructuring to use a portion of its reserves to write off expenses incurred by the company on international acquisition and domestic expansion. As per the scheme, the balance lying in the Securities Premium Account would be transferred to the Business Reconstruction Reserve Account, which could also result in a reduction of capital.

The company had earlier said “the present global economic scenario had an adverse impact on its domestic and overseas operations which may result in impairment in value of its assets or investments”.

The company had said that it would undertake the financial restructuring in a manner such that its operating results do not get impacted by such costs. In February, the board had approved the arrangement.

Will Berkshire lose "AAA" S&P rating ?

Atul Karmarkar — Tue, 24 Mar 2009 15:55:08 +0000

Berkshire Hathaway could lose it’s ”AAA” credit rating from S&P in a year’s time if capital levels or value of its equity holdings face more downward pressure. The company’s outlook rating was revised by S&P from “stable” to “negative”. Other rating agencies like Fitch lowered it’s rating on Berkshire to “AA-plus” from “AAA”, and Moody’s continued to rate Berkshire “AAA” with a stable outlook.

Berkshire’s profit for last year was down 62% and the stock tanked by 32%, the worst year since Buffett took over the reins in 1965.

Change in F&O lot size sends shivers in Dalal Street

Atul Karmarkar — Fri, 20 Feb 2009 15:14:32 +0000

As if the markets didn’t have enough on their plate already, the change in lot size for F&O contracts has sent market players scurrying for cover. In Dec-08, NSE had announced changes in the lot sizes of contracts, to be effective from March 2009.

As per SEBI regulations, F&O contracts have to be worth Rs.2 lakh. With the financial meltdown, most stocks covered under F&O are now trading at less than half their value. This has led to an increase in the total no. of shares per lot, which means traders will need to shell out more cash for these additional margins. A total of around 243 stocks are likely to be affected with this move.

However, the Nifty lot size has been left unchanged so this could lead to increased trading in index futures rather than stock futures.

Sun Pharma replaces Satyam in Sensex

Atul Karmarkar — Fri, 09 Jan 2009 02:12:17 +0000

In the light of the massive scam at Satyam, the Bombay Stock Exchange has decided to replace Satyam Computer Services with pharma major, Sun Pharmaceuticals.

The change comes in to effect from Monday, January 12, 2009. The NSE had also declared that Satyam would be removed from the Nifty as well as the S&P CNX 500 from the same date, however it wasn’t immediately clear which scrip would replace Satyam in these indices.

Berkshire Hathaway down 32%, but not out

Atul Karmarkar — Fri, 02 Jan 2009 03:07:52 +0000

Warren Buffett’s Berkshire Hathaway ended 2008 on a somewhat bleak note, it’s Class A shareholders seeing the price head south from $141,600 to (close of ’07) to $96,600 this year, shedding almost 32%, it’s worst performance for almost three decades. It touched $147,000 on September 19, 2008, followed by a low of $77,500 on November 20.

The stock still managed to beat the S&P 500 index (-38.5% in 2008) for the third year running. Since 1977, Berkshire has outperformed the S&P in 24 out of 32 years. You can see how Berkshire compares with the index.

SEBI's letter to Pyramid Saimira – Curious Case

Atul Karmarkar — Wed, 24 Dec 2008 14:03:56 +0000

A pretty curious case, this… Pyramid Saimira Theatre said it received a letter from SEBI asking its chairman PS Saminathan to make an open offer to buy 20% in the company at Rs.250/share.

Some time later, the company called a press conference to announce that the letter was a forgery. SEBI also confirmed that they had not issued any such letter to the company. The letter was delivered to the company by Blue Dart, whereas SEBI normally faxes such letters instead of sending them by courier. Blue Dart, however, has confirmed in writing that it had received instructions from SEBI to deliver it on Monday morning.

The reason for this letter ? Apparently, the open offer was triggered due to violation of the creeping acquisition limit of 5% per year by the promoter. In June ’08, he bought a 4.89% stake in the company at Rs.250/share, and then acquired an additional 2.45% between November 19 and December 5. This took his total purchases for the year to over 7%, and according to SEBI rules, the open offer price should not be less than the price at which the promoter had made acquisitions during the preceding 26 weeks.

Chairman PS Saminathan said he held a 24% stake and was keen to acquire another 22% from the other promoter, Nirmal Kotecha.

Of course, as was to be expected, the stock shot up over 10% and even hit the circuit and it would be interesting to see who bought and sold these shares in these couple of days. A surge in stock price would obviously allow someone to offload all / part of their holding, and once the prices came down on news that the letter was forged, someone else could pickup those shares at a much lower price. Could that someone be Kotecha ?

Some more updates:

Kotecha sold 6% of Pyramid on fake letter bounce

IT Dept attaches Pyramid Saimira’s bank accounts

I knew Kotecha was selling. I want to know who’s buying

Analjit Singh hikes stake in East India Hotels

Atul Karmarkar — Tue, 09 Dec 2008 15:17:10 +0000

Analjit Singh has taken an additional 1% stake in EIH Ltd. (East India Hotels, part of the Oberoi Group), via his investment arm – Pivet Finance. The cost works out to around Rs.45 crore (36.08 lakh shares @ Rs.124.85 / share), and takes his overall holding to around 2% with this purchase.

Major shareholders in the company are the promoters – The Oberois with 46.41%, followed by Russell Credit (an ITC subsidiary) - 14.95%, LIC with 6.53% and Gaylord Impex, GIC, HSBC, New India Assurance and Sonata Investments each hold less than 2% stake.

The hotel industry is not in the best of shape, especially after the Mumbai terror attacks, and prices of several stocks have been beaten down, presenting an attractive opportunity to pickup some at cheap valuations.