Monday, January 18, 2010

BSEPSU & news that moves the market

There has been few news flow which are important for market moves which will have impact on market as said earlier PSU stocks are still looking strong quoting @ trailing 17.12 P/E as per BSEPSU index and BSEPSU holds 29% of the total BSE market capital and in next 2years when more companies are listed this would increase beyond 40% so no wonder many mutual funds are announcing launch of PSU equity fund like Religare has done.

Government need to attract investment so many news flows is expected and good dividend payout possible so investor should take informed decision as many penny stocks are also moving and this can create a problem for investor. So please check track record, ownership, dividend payment in last 5years, promoters holding and even market cap as low equity base stocks can be easily be manipulated in this euphoric market.

The government came out with a disinvestment policy last month, under which PSUs earning net profit for the last three years would be listed and all profitable, listed PSUs not meeting the mandatory public shareholding of 10 per cent would be made compliant. There are 10 listed PSUs where public holding is less than 10 per cent and at present, there are 61 unlisted profit-making public sector undertakings (PSUs) and 10 listed PSUs, in which the government is looking to offload its stake, Sunil Mitra, disinvestment secretary said. The department of disinvestment will submit a action plan by end of March’10 after consulting with the administrating ministries of the 71 PSUs.
 
http://akprabhakar.blogspot.com/2010/01/markets-consolidated-their-gains-this.html  MRPL, NEYVELILIG, GSPL, POWERGRID are PSU and GICHOUSING & IFCI are indirectly held by government in our Fabulous-15 list

http://www.bseindia.com/mktlive/indiceswatch.asp?iname=BSEPSU&sensid=01&type=comp&graphpath=/applet/images/graf_appBSEPSU.gif

Religare Mutual Fund has announced the launch of its new open – ended equity scheme – Religare PSU Equity Fund. The fund seeks to generate capital appreciation by investing in companies where the Central/State government(s) has majority shareholding or where the management control lies with the government. The fund will invest in companies having presence in core sectors and are expected to benefit from the divestment process and reforms.
http://www.business-standard.com/india/news/the-psu-opportunity/382889/  The PSU edge, Apart from higher stock returns in the past, an important fact is that most of these companies have a strong advantage in their core business and enjoy leadership position. Today, companies like BHEL, Power Grid, NHPC, NTPC, ONGC, Indian Oil, State Bank of India, BEML, Bharat Electronics, Shipping Corporation and Concor are the largest players having a lion’s share in their respective industries. Some of these companies have created huge entry barriers in the form of their manufacturing capacities, distribution networks and consumers, which cannot be easily replicated. This gives them a clear advantage, particularly in a growing economic and increasingly competitive environment. Notably, most of these companies operate in industries like power, engineering, banking, logistics and so on, where the growth prospects are enormous. All this will help them not only grow their businesses bigger and generate huge cash, but also distribute the latter in the form of dividends, which makes PSUs an attractive investment.
 
IDBI Bank is believed to have zeroed in on Federal Bank for acquisition. IDBI Bank has also completed due diligence, an exercise undertaken by the acquirer to assess the value of the entity before purchasing it, a source close to the development said. http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/IDBI-Bank-zeroes-in-on-Federal-Bank-for-acquisition/articleshow/5473157.cms

The merger talks of state-owned Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) are back on the table, according to government sources. Due to the poor financial health of the two state-owned PSUs, the government is looking at the proposal to merge the companies to have better synergy and efficiency. http://www.bloombergutv.com/industry-news/telecom-industry-news/42850/bsnl-mtnl-merger-back-on-the-cards.html

RCOM is learnt to have begun talks with strategic and financial investors for selling 5% stake in its tower unit prior to the planned IPO. Banking sources with direct knowledge of the development said the company was hoping to raise about Rs 2,500 crore from the proposed sale. J M Financials is the lead manager of the talks with a host of co-lead managers such as J P Morgan, Enam Financials , Duetsche Bank, ICICI Securities and HSBC. http://www.thehindubusinessline.com/businessline/blnus/17181606.htm

GAIL (India) net profit jumped over three-fold to Rs 860 crore for the quarter ended December 31, 2009, over the same period last year. Turnover rose to Rs 6,187 crore for the third quarter ended December 31, against Rs 5,812 crore in the same period previous fiscal.

Tata Communications has reached an agreement to acquire BT Group's Mosaic business, which offers on-demand digital media management platforms, that manage content and workflow from production to distribution across collaborative market ecosystems. http://www.business-standard.com/india/news/tata-communications-acquires-mosaic/83356/on

Suzlon Energy has forayed into the Swedish market with its first order coming from Triventus AB, a wind power developer and consultant. The order is for two S88-2.1 megawatt wind turbines. Suzlon will also sign service and maintenance partnership contracts with a subsidiary of Triventus for future projects in Sweden http://www.business-standard.com/india/news/suzlon-enters-swedish-market/83367/on

The Indian auto industry is likely to see a growth of 10-12% in sales in 2010, but companies will come under margin pressures as competition hots up in the market, according to global rating firm Fitch.

Steel futures prices dropped by Rs 390 to Rs 26,100 per tonne on Monday following heavy selling by traders, driven by weak demand in physical markets. http://www.thehindubusinessline.com/businessline/blnus/08181420.htm
 
http://www.business-standard.com/india/news//bsnl-ipo-may-happen-next-fiscal//83407/on  The government today rapped state-owned BSNL for poor financial performance and made a case for disinvestment in the telecom PSU through an initial public offer (IPO).




Posted by at