Stock In Action: 10th Sept 2012

As per the media news the auditors of debt-ridden Kingfisher Airlines have said the air carrier needs to strengthen its internal audit systems and have raised concerns over numerous issues including delayed or no-payment of dues. Making some serious observations about the books of accounts of Kingfisher, the auditors in their report for 2011-12 have said the company has prepared its financial statements on a 'going concern' basis, despite its net worth having been completely eroded. Te stock may continue to see some pressure today.

As per business standard Aditya Birla group firm Peter England Fashions & Retail's board y approved the demerger of Pantaloon format business and fixed the share swap ratio at 1:5 -- meaning for every five shares of Pantaloon, the shareholders will get one Peter England share. These developments mark a step closer towards Aditya Birla Group's proposed acquisition of majority stake in Kishore Biyani-led group's flagship Pantaloon format apparel retail business unit. The share entitlement ratio has been arrived at based on the recommendations of Deloitte Touche Tohmatsu India and Grant Thornton India LLP. We may see some volatility in the stock today.

As per the media reports, four state-owned firms - NTPC, Coal India, SAIL and NMDC - Sitting on cash reserves of over Rs 1 lakh crore have sought shareholders' approval for buying back shares, a move that would help the government meet the disinvestment target by selling its stakes in them. The government, which has set an ambitious disinvestment target of Rs 30,000 crore for 2012-13 and contains the fiscal deficit, has not been able to kick off share sale plan of any of the PSUs due to volatile market conditions. Besides, the government is also exploring options of divesting 10% shares in NMDC and has invited applications to select merchant bankers. This  is a positive move by the government on the disinvestment side we may see some positive movement in all of these stocks today.

As per the media news Auto component maker Bosch is suspending production at its Jaipur and Bangalore plants on specific days this month with an aim to prevent inventory pile up due to slowdown in domestic commercial vehicle segment. For the last 3-4 months, the commercial vehicle segment is not doing as good as we had expected. We are suspending production for a short period of time as stocks were going up. We don't want the inventory to pile up.  This move will help the company to improve their working capital in the short term. The stock may remain volatile post the news.