The markets had a great week and gained significant ground. The markets are trading in new territory for the calendar year 2016. The BSESENSEX and NIFTY gained 2.62% each and closed at 27,836.50 and 8,541.40 points respectively. In sectors metal and banking put up a strong performance while poor performance from Infosys saw the IT and Tech sector’s lose ground.
Infosys spooked the market and the reason was the reduced guidance for FY2017 a mere three months after they gave it post annual results for March 2016. One gets a sense of feeling that the guidance given then was a stiff one and difficult to achieve has been corrected post Brexit. A convenient way of doing it if the gut feeling is correct. Infosys was the reason why markets fell on Friday otherwise it would have been positive on all five days.
World markets too have rallied and one gets the feeling that Brexit seems to have done good for global markets. I hope this feeling remains for a long time otherwise it could become painful. Dow Jones gained an impressive 370 points or 2.04% to close at 18,516.55 points.
Primary markets seem to doing even better than the secondary markets. We had plenty of action last week with one listing, one issue open for subscription and the roadshow for a third issue. Quess Corp which was subscribed 144 times and by HNI’s a massive 392 times listed and had a stellar debut. The shares which were issued at Rs 317 closed the week at Rs 491.65, a gain of Rs 174.65 or 55.09%.
The offer for sale of 1.75 cr shares of L&T Infotech opened and closed for subscription during the week and received decent response. The issue was subscribed an overall 11.69 times with QIB portion subscribed 19.91 times, HNI 10.96 time and retail 7.39 times. There were a total of 10.90 lac application forms and this is a new record in terms of number of applications.
Advanced Enzymes had their roadshow for the issue which opens on Wednesday the 20 th of July and closes on Friday the 22 nd of July. The company through a combination of fresh issue and an offer for sale would be raising Rs 412 crs at the top end of the price band of Rs 880-896. The company produces Enzymes for the nutraceutical and food industry. A simple explanation of enzyme is the culture used to make curd. We need a small quantity of the previous curd to create the enzymes in the milk before curd is set.
The issue is interesting and is expected to be very well received. I believe the Jain community may not subscribe to the issue as enzymes are micro-organisms and therefore have life in them. Irrespective of their subscription, the issue would do very well.
Markets are waiting for the GST bill to be passed and in anticipation have run up quite a bit. Going forward even though they are richly valued, only an event happening or not happening would bring about the correction which would be much needed. Till that happens ride the rally.
