| Name | Date of listing | Issue Price | closing price | closing price | % gain loss | change over | ||
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over week | lssue price | |||||
| MITCON Consultancy Ltd | 1st November | 61.00 | 55.10 | 55.50 | -0.66 | -9.67 | ||
| Power Grid (FPO) | 19th December | 90.00 | 106.50 | 104.35 | 2.39 | 18.33 | ||
| Engineers India (FPO) | 28th February | 150.00 | 241.90 | 235.65 | 4.17 | 61.27 | ||
| Wonderla Holidays Ltd | 9th May | 125.00 | 157.60 | NA | 26.08 | 26.08 |
Performance of Newly Listed Shares as on 9th May 2014
May 12th, 2014
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Markets sensing NDA win and awaiting exit poll and final results
May 12th, 2014
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The markets are celebrating and celebrating in style. They rose a good 3% plus on Friday and made new lifetime highs. No the results are not out, but there is a leak of information about the exit poll done by a leading channel. These exit polls are based on eight rounds of polling and the ninth round alone is left which would be held on Monday. Polling for 41 seats would be held in the ninth round and also decide the outcome of the most high profile election in Varanasi or Kashi.
The exit poll or more appropriately the leaked exit poll says that the BJP led NDA would secure a majority. If the pre-poll alliance does it one can be very sure that many more like minded parties would join the alliance. One must remember that the Vajpayee led alliance had many partners and two of them have already returned to the front this time around. I believe political compulsions will force many more of them to join the front.
Last week saw the markets react negatively on Wednesday when one of the channels associated with the TV-18 group painted a gloomy picture of the BJP and its NDA led alliance. The markets fell on that day. I am prompted to ask the question what happened. On what basis was this new assessment made when exit polls are banned until the last round of elections are over. How was this channel able to make new assessments and post a fresh picture? Was it the overnight dream of the editor in chief or was it planted? I believe it was a motivated story as the person concerned the editor in chief of that channel is joining a new channel which is promoted by a sitting MP of the Congress party and is also re-contesting this time as well. This could also be attributed to political rivalry as another popular channel has taken sides with the present opposition. I am sure everyone reading this newsletter would be aware of what channel and person I am talking, but just in case of doubt, it is RajdeepSardesai who would be joining Naveen Jindal promoted Focus TV.
Not much would happen on Monday in the markets and entire focus would be on Tuesday. There would be volatility at the start of trading as markets adjust to the consensus of exit polls which would be telecast from Monday evening onwards and the newspapers on Tuesday morning. If the consensus or average of these polls indicate that the NDA would form a majority there may not be much of price movement or volatility. On the negative side if exit polls indicate that the NDA would struggle to make the halfway mark there would be panic and markets could fall and surrender all the gains of Friday and more. On the positive side if BJP is closer to the halfway mark on their own markets could rally further. Tuesday to Thursday would be all driven by exit polls, TV channels and newspapers. The grand finale would be Friday where by 12 noon things would be clear.
Assuming the markets get what they have been rooting for, which is a clear mandate for a change in government and one that would be stable, there would be some upward move but not much thereafter. Markets would probably consolidate till expiry and fresh moves would take place in the June series where cabinet formation, pre-budget discussions etc would begin to happen. If however the results do not come up to the leaked exit poll and market expectations of a clear mandate the disappointment and the loss in prices could be big. A fall to around the 6200-6300 levels may happen.
What about post results, if everything is as expected. Valuations currently are just reaching the level of being fully valued. However the expectation of a bull run from here is on the basis of the Indian economy turning around or getting a new focus. The Gujarat model and the success of industry in Gujarat needs to be replicated all over the country. If this begins to happen things will certainly get a boost.
Let’s keep our fingers crossed and hope that the results are the same or better compared to the leaked exit poll. If that happens it would be the right time to invest in the market.
Markets Confident of a NaMo Victory
May 5th, 2014
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Markets and politics are very closely aligned and especially when it comes to elections it is even more so. The markets have gone quiet over the last couple of weeks and are biding their time to see the exit poll and then the actual results, all of which are due in the next 10 days.
The current ground reality and expectation is that there would be a change in government which would be stable. The BJP led NDA would garner a majority with its pre-poll alliance and it is quite likely that there may be some more alliances post the government formation. These elections have become extremely dirt with the language being used certainly not parliamentary. What is quite appalling is that this election is a matter of all against one. We have the Left parties who have a presence which is restricted to Tripura, West Bengal and Kerala wanting to decide the contours of the next government when their own numbers have been reducing constantly. The so called secular parties whose presence is limited to single states want to form a front and the government. India is a democracy and the single largest party or group of parties with an alliance prior to the election are called to form the government if in the opinion of the President of India he so believes that they can impart stability.
Instead of fighting the election and try and win the maximum seats we have leaders saying that those who vote for NaMo should drown in the sea and some others that such voters be sent to Pakistan. These statements reflect the insecurity of these leaders and echo their sentiments. Very clearly they see that they have failed to hold the masses and the majority of people want a change.
Opinion polls, ground swell, voting percentage increase and the frustration of people over the inefficiency of the incumbent government over the last ten years indicate that there would be a change. It is this change that the market is not only rooting for but waiting with bated breath to hear in the exit polls next Monday.
Let us now understand what can go wrong from a market perspective. The last two elections in 2004 and 2009 saw a down circuit when the NDA lost and an up circuit when the UPA won. Irrespective of all probable outcomes neither of these events are possible this time. The upward circuit is ruled out because of the base shifting to 22500 on the SENSEX which means one needs a movement of over 4,000 points for a circuit. Similarly the worst possible mess cannot see the market fall 4,000 points as the fundamentals of the economy would not allow such a fall and there would be large institutional buying if such an opportunity arose.
The question then is what could happen? The belief or expectation is that the BJP is expected to get around 230-245 seats on their own and with their pre-poll alliance anywhere past the 272 mark which could stretch to 280 or thereabouts. If this number changes on the upside dramatically with the BJP inching towards the halfway mark on their own there could be some euphoria and markets may rise 3-5% but this also would get largely factored in post exit polls and pre result day. If this number falls for the BJP and comes around 210-215 there could be a similar fall of 3-5%.
There is an interesting rally to be held in Amethi today which would be addressed by NaMo and this would be after the rally which was addressed by RaGa earlier. Whether this rally today could swing the voters and cause a debacle or not, the turnout at the rally would be very interesting. Temperatures in the country rise every summer and have reached close to 48-50% in many parts, but the political temperature makes the weather even hotter.
The markets await the 12th of May and then the 16th of May, but as mentioned earlier do not expect too many fireworks this time.
