Stocks In Action For 6th September 2012

Two foreign funds offloaded their stake in Crompton Greaves yesterday with CLSA selling 46.23 lac shares and Deutsche Securities Mauritius selling 32.61 lac shares. At the same time HSBC Global Investment Funds acquired 82.07 lac shares of the company. These mixed transactions by institutional investors are likely to increase volatility in this stock in today’s trading session.

Auto components manufacturer Rico Auto announced yesterday that they would be increasing their employee headcount by as much as 500 employees for their upcoming plants. The company is setting up 3 plans out of which 2 are to be in Bengal and 1 in Chennai. For the year, the company is making a capex of Rs.50 crore. With this news and the strong prospects of the company, share prices are expected to get an upward swing today.

Further according to media reports, government's plans to divest stake in PSUs is gathering pace. Stake sale in a whole host of companies are likely in the coming few days. About 15 PSUs are on the divestment list this year, but for now, MMTC and Neyveli Lignite are going to go for cabinet approval next week. The government is planning to divest 9.33% stake in MMTC, but only 5% stake in Neyveli Lignite as there are trade union issues. It is looking at a special allotment of shares for employees. On the back of this news one may see volatility with a positive bias in the share price of MMTC and Neyveli Lignite in today’s trading session.    

Tata Steel yesterday hiked their stake in Tinplate to 73.44 per cent. The company did this through an open offer to shareholders and was followed by the rise in stake in Tata Sponge Iron a few days back. On the back of this buying, the stock prices of Tinplate are expected to see an upward directional bias today.

To boost cost cutting measures, MTNL plans to delist their shares from exchanges in Delhi, Calcutta and Madras. Discussion for the proposal would take place in the AGM to be held on 28 September 2012. The company plans to do this having looked at the negligible trading volumes seen in the aforementioned exchanges. The stock price of MTNL is likely to see volatility today with regards to this plan.

With increasing speculation over an expected rise in fuel prices this Friday, OMC stocks saw an increase of more than 1 per cent yesterday. This trend is expected to continue, though to a smaller extent than yesterday. There would be continued volatility and an upward trend in the prices of stocks like Indian Oil Corporation, Hindustan Petroleum Corporation Limited and Bharat Petroleum Corporation Limited.