Market Analysis: Weekly roundup till Sep 19

Sharp rally in the most of the sectors lead the sector indices to hit the 16 month highs. Both the indices gained nearly 3.0% for the week on the back of higher advance payments in the second quarter, heavy portfolio inflows, indicating revival in economy mainly boosted the market sentiment. Signal of apex bank not to hike interest rates still the economic recovery also boosted the market sentiment.

The Nifty gained 477 points and closed at 16711 as compared to the previous week. Nifty gained 146 points and closed at 4976.

On the global front, most of the world markets closed up in the week, by encouraging rise in US retail sales in August and hope of global economic recovery. FII"s pumped Rs 6471 crore in the week.

BSE Auto sector was the top gainer for the week by 9.5 per cent on hopes of strong sales for the upcoming festival season, followed by Metal sector, which gained 7.8 per cent.

Going forward

The indices are expected to be choppy in the derivative expiry week. Most of the Market experts expect, that the markets consolidate in the near term after the up move witnessed during the last few sessions. Global news may also decide the market direction of the domestic markets. Investors look forward on US Federal Reserve meet during the week to asses the early signs of growth in the US economy.

Corporate

RIL likely to raise Rs.4.2 crore via trust share sale
Reliance Industries (RIL) may raise Rs.4244 crore selling its own shares, in a Petroleum trust which holds 6.6 per cent share in RIL. Company is planning to acquire petroleum assets in overseas taking advantage of fallen valuations. It is expected that, the transactions are likely to be executed on today"s morning through Block deals.

The company has mandated two institutional brokers DSP Merrill Lynch and Citi Group to sell the additional 1 crore shares at Rs 2125. It proceeds to invest in expanding Oil exploration.

IDFC acquires BP"s India wind power assets
IDFC Private Equity had acquired the wind power assets of BP through it"s wholly –owned entity Green Infra. With this move it became the largest infrastructure focused PE fund house in renewable energy space.

The PE player refused to comment on the deal size. But it is expected that it could be around Rs 650-700 cr. The transaction will add to Green Infra 60-100MW in Karnataka and 40 MW in Maharashtra for its current 24 MW capacity.

The company aims to increase its capacity to 300-500MW in next three years. The acquisition will be funded with mix of debt and Equity. IDFC and Axis bank provide the funding.

Bharti increases stake in Great Offshore to 22.4 per cent
Bharti Shipyard has acquired an additional 3.01 per cent stake in Great Offshore, increasing by its stake to 22.4 per cent. The Company paid Rs.560 each share of 11.6 million shares.

According to company sources, Dhanshree properties acquired the share on its behalf on the Bombay stock exchange in bulk deal.

Bharti and ABG ship yard both want to acquire Great Offshore, as demand is increasing for drill ships and other offshore structures. The acquisition will take them a step further in offshore service business and turn the buyer into an integrated firm.

Q2 advance tax collections point to robust recovery
Advance tax collections for the 2nd quarter of the current year have shown robust growth of 35 to 40% across industries. This is giving a hope of sooner than expected recovery.

The quarter is significant to the Tax Department, most companies and banks pay almost 45 per cent of the total annual tax payable. The Central Board of Direct Tax set a target of tax collection for the fiscal year is at Rs.370000 crore, roughly 10% higher comparing to the previous year.

Most industries, automobile and Infrastructure companies like Tata Motors, L&T and RIL has shown good numbers in paying advances taxes.

(An article by DAS CAPITAL MANAGEMENT & ADVISORS Pvt Ltd)