Market News 21st feb 2008
FIIs turn buyers
Foreign institutional investors (FIIs) bought shares worth net Rs 1,585.10 crore on Tuesday, 19 February 2008, compared to their selling of Rs 115.90 crore on Monday, 18 February 2008.
FII inflow of Rs 1,585.10 crore on 19 February 2008 was a result of gross purchases Rs 3,788.30 crore and gross sales Rs 2,203.20 crore. The 30-share BSE Sensex rose 27.61 points or 0.15% at 18,075.66 on that day.
FII inflow in February 2008 totaled Rs 1,153.80 crore (till 19 February 2008). FII outflow in calendar year 2008 totaled Rs 11,881.90 crore (till 19 February 2008).
There are a total of 1,295 FIIs registered with the Securities & Exchange Board of India (Sebi).
Record date for Bajaj Auto scheme of arrangement is 25 March 2008
Hon'ble High Court of Judicature at Bombay has sanctioned the scheme of arrangement of demerger between Bajaj Auto, Bajaj Holdings & Investment and Bajaj Finserv and their respective shareholders and creditors.
Bajaj Auto has fixed 25 March 2008 as record date for determining the shareholders of the company, who would be eligible to receive shares of Bajaj Auto (new) and Bajaj Finserv in the ratio of 1:1.
The company made this announcement after the trading hours on Wednesday, 20 February 2008.
Government to invest $2.5 bn in SBI rights shares - REUTERS
The Cabinet on Thursday approved a government proposal to invest Rs 9996 crore ($2.5 billion) in the rights share offering by State Bank of India, the country's biggest lender, a spokeswoman said.
SBI, 59.7 per cent owned by the government, launched the rights share sale on February 18 hoping to raise $4.2 billion.
The spokeswoman said the government would issue special marketable securities, instead of an earlier commitment to issue bonds that would qualify for statutory liquidity reserves (SLR) of commercial banks.
The cabinet also modified an earlier proposal to invest Rs 100 billion in the rights issue. Banks in India are required to hold at least 25 per cent of their deposits in government securities under the SLR norm.
SBI is offering one rights share at Rs 1,590 for every five held. The sale is open for one month. "On receipt of the approval of cabinet, the transaction will be completed within this financial year," the spokeswoman said.
The funds will be used to meet rising loan demand in a fast-growing economy. Shares in the bank fell 1.2 per cent on Thursday to Rs 2,179.30 in a Mumbai market that closed 0.7 per cent higher.
The government is estimated to receive Rs 1450 crore in dividend and taxes from SBI in the fiscal year ending in March, the spokeswoman said. State-run firms in India that make profits are required to pay 20-30 per cent dividend annually to the government.
Markets may fall further, earnings not good enough: Goldman Sachs
Indian stocks remain expensive as the corporate earnings potential and various macroeconomic factors do not justify the current level of the market, despite its recent downslide, according to Goldman Sachs.
"With valuations still elevated, notwithstanding recent market weakness and domestic investor sentiment bruised by poor performance of the high-profile Reliance Power IPO, we reiterate our underweight stance and expect the market to retrace further, or at best mark out a volatile trading range," the global investment banking major said in its latest portfolio strategy report for Indian market.
Goldman Sachs analysts said that retail investors have been a key driver of the market's strong rise between August 2007 and January this year, but their "speculative enthusiasm" has been dampened.