Money on the markets

Mahindra Satyam shares plummet

Shares in Mahindra Satyam dropped nearly 11 percent on Wednesday after a media report said the Central Bureau of Investigation had found evidence of an additional 4,739 crore rupees corporate fraud at the IT services firm.

The stock closed at 90.55 rupees, its lowest in over four months. It had closed at 123.25 rupees on September 1, its highest closing point since January 7.

Mahindra Satyam fell on high volumes of over 33 million shares on the BSE and ended as the second-most traded counter.

However, at the Reuters India Investment Summit, a top company executive said customer attrition has stopped and the company was not offering price cuts to win new deals.

Are you optimistic about this stock, or do you think it will fall further

Reliance aims big with $12 bln bid for LyondellBasell

Ranked by Forbes as India’s richest man with a net worth of $32 billion, Mukesh Ambani is no stranger to taking risks.

The move by conglomerate Reliance Industries, controlled by Ambani, to bid for bankrupt LyondellBasell is a calculated one. Markets seem to think this is a bargain and investors pushed up Reliance’s stock nearly 4 percent on Monday.

If the deal, which sources say may be worth $12 billion,  goes through, it would catapult Reliance into the ranks of top petrochemical makers such as Saudi Arabia’s SABIC, Germany’s BASF and Dow Chemical Co.

The bid comes at a time when asset prices have fallen globally in the wake of the economic crisis but there are still some lingering doubts over whether the worst is over for the global economy.

Reliance hasn’t shied away from making mega investments during downturns.

Last December, Reliance commissioned a 580,000 barrels per day refinery next to its existing 660,00 bpd plant  in the western Indian state of Gujarat, creating the world’s biggest oil refining complex just as global oil demand began to collapse.

In praise of James Tobin; India, Indonesia or Korea, who’s next?

If only James Tobin had lived to see this day. The American economist was not only a big fan of government intervention in matters economic and financial, which this credit crisis has seen plenty of, but he was also the man behind the ‘Tobin tax’ that Brazil has just introduced on foreign exchange transactions.

James Tobin believed a small tax on speculative transactions was acceptable and a reasonable means for third world countries to garner some revenues out of foreigners who wanted to dabble in their markets. It doesn’t stop with Brazil. Indonesia hasn’t introduced a Tobin tax, but is trying to close a loophole through which corporates borrowing through special purpose vehicles could evade local taxes. Both Taiwan and Indonesia have also targeted short-term foreign investments — Taiwan has banned foreign investment in time deposits while Indonesia is thinking of banning overseas investors from central bank bills.

In an environment of low interest rates, abundant liquidity and a voracious appetite for yield, Asian and other emerging markets have had to deal with massive capital inflows. Policy makers have almost grudgingly watched their property and equity markets propelled to higher highs by these flows. In economic parlance, there’s been a jump in broad money growth and the cash in excess of what is required to finance ongoing economic activities is finding its way into financial assets.

As this chart illustrates, there’s been a rapid increase in capital flows into Asia since the middle of 2009, accompanied by a sharp spike in share prices.

Telecom stocks struggle, Bharti falls nearly 4.5 pct

Telecom stocks started the week on a disappointing note, with Bharti Airtel slipping 4.4 percent and Reliance Comm ending down over 1 percent.

Bharti Airtel was also the top Sensex loser. Smaller competitor Idea Cellular closed 2.85 percent lower.

The telecom sector has gone out of favour with investors after firms slashed call tariffs, raising concerns about their profitability.

Bharti Airtel’s shares have dropped as much as 34 percent since October, while rival Reliance Communication has lost 44 percent over the same period.

Given the fact that India is the world’s fastest growing telecom market, would you take advantage of the fall and invest in these counters?

Reliance Industries shines

Shares in Reliance Industries gained 2 percent on Friday, helping the BSE Sensex gain 236 points.

RIL shares had fallen more than 3 percent over the last three days in the absence of any major announcement at the company’s annual general meeting earlier this week.

The Oil & Gas Index rose 1.52 percent, helped by gains in stocks like Reliance, BPCL, Aban Offshore and HPCL.

Investors in RIL have been rewarded well as shares of the country’s top listed firm have gained 10 percent in November so far.

Do you think Reliance shares will continue to rally?

Realty sector feels the heat

The BSE Realty Index topped the list of sectoral losers on Thursday, with the index falling 4.3 percent as real estate stocks came under pressure.

Indiabulls Real Estate, HDIL and Unitech slipped over 5 percent each and ended as the top losers in the index. Phoenix Mills was the only counter on the index that closed in the green.

Shares in DLF, India’s top listed realty firm, fell 3.7 percent.

Manish Kumar, head of investments at ICICI Prudential Life Insurance, told Reuters he was shying away from the real estate sector given its sharp rise and valuations that are pricing in significant increase in execution.

What’s your take on this sector?

Infosys, HDFC Bank touch 52-week highs

The BSE Sensex closed 52 points lower on Wenesday, but many top counters touched their 52-week highs in trade, Thomson Reuters data shows.

Top IT stocks Infosys, Wipro and TCS touched their 1-year highs as the BSE IT index closed 0.7 percent higher.

Over 90 stocks on the benchmark index touched their 52-week highs during trade, including banking counters HDFC Bank and Kotak Mahindra Bank.

With many stocks posting healthy gains in the recent past, do you think there is more steam left?

Weak day for oil & gas stocks

Shares in ONGC dropped over 2 percent and ended as the top Sensex loser as the broader market closed just 18 points higher.

The Oil & Gas Index slipped around 0.7 percent in trade, with ONGC, BPCL and Reliance among the losers.

Energy major Reliance Industries shed 0.7 percent to 2,133.75 rupees, as the energy major did not make any major announcement at its annual general meeting today. Chairman Mukesh Ambani said the company would work towards attaining global scale for its conventional energy platform and invest in new businesses such as retailing and alternative energy.

The BSE Oil & Gas Index has gained over 8 percent this month – a little higher than the benchmark’s gain of 7.2 percent in the same period.

Do you think it is a good time to allocate funds to this sector?

Lacklustre day for IT stocks

The BSE IT index was the only sectoral index to close in the red on Monday, in a broader market that ended 183 points up.

Top IT firms Infosys Technologies and TCS were among the top Sensex losers, falling 0.83 percent and 0.63 percent respectively. Patni Computer dropped over 3 percent.

Financial Technologies, however, bucked the trend and rose 3.5 percent, leading the gainers in the IT index.

The infotech index has gained nearly 7 percent this month, and top counters like Infosys have added over 6 percent during the same period.

What is your favourite pick in this sector at this stage?

Auto stocks post healthy gains

The BSE Auto index rose 1.5 percent on Friday, taking the festive season-backed gains for the month to 7.4 percent.

Hero Honda and Maruti Suzuki rose 4 percent each in trade, ending as the top gainers among the Sensex components. Exide Industries surged 8.6 percent.

Gains from these stocks also helped the benchmark post a rise of over 150 points.

The festive season has also helped auto companies boost their sales.

Would you invest in auto stocks at this stage?