The markets went through a wild week and almost every single day there were movements of three percent or thereabouts. The week closed with gains of 0.81% and 0.86% for the BSESENSEX and NIFTY, but the advances to declines indicated greater strength. Also the kind of gains witnessed in many of the sectoral indices indicated a greater recovery post the los made on 7th May.
Parliament has ended its Budget session and would reconvene for the monsoon session. The GST bill has been sent to the select committee of joint houses and so has the land bill. These bills with the recommendation have to be sent back in a time bound manner.
The government would be completing its first year in office. While expectations are always higher than what can be delivered it appears that a lot of work has been achieved in setting things. The massive Indian Juggernaut which had derailed and was lying hapless has been put back on its wheels and we all know when things are in place speed is never an issue.
Some things which need to be highlighted include the transparency with which things are happening whether it be allocation of coal blocks or spectrum. The bids received for coal blocks and the kind of money that the states would receive is mind boggling. The word scam seems to have lost significance as one hasn’t heard that term being used. Second the time that parliament has functioned and business completed has increased significantly. Disruptions have reduced and one is convinced that this government means business. Thirdly the strength of India is the intelligent bureaucracy which unfortunately in earlier times chose to stay away from work and everything was ‘chaltahai’ attitude. It’s simply great that you see every babu on his table on time on dot every single day. What has been done is a good beginning but we have a lot to be done and four years of time is still there. I am hopeful that same time next year will be even better.
Primary market saw one issue closing and one issue listing. The undertone from the primary market is not too good. The issue from PNC Infratech saw half the bucket that is from HNI’s and retail undersubscribed. It is just that the institutional response was good, hence the issue sailed through. Incidentally as mentioned earlier as well the anchor book was impressive. The second was the listing of UFO Moviez Limited. The issue created a lot of buzz and in the grey market commanded a premium which was a third of the issue price. The price band was Rs 615-625 and the premium was as high as Rs 2310-220. What happened next no one knows but they say an Ahmedabad based HNI hammered the price down to as low as 15-20. What was behind the move no one knows as yet, but surely truth will prevail. In couple of weeks the conspiracy or cornering theory would be proved correct. The merchant banker for the issue were Citibank and Axis.
The issue debuted with losses of over 4% on day one and recovered some ground on the next day to still end the week with losses of 2.5%.
The markets are looking like they want to recover lost ground. While a rally is certainly on the cards it will come in a volatile fashion. Ride the same as long as it lasts.
