The week gone by has been eventful and the one ahead is likely to be even more eventful. I believe the markets are at very important levels and events which unfold will have a bearing on the markets going forward.
First about the week gone by, the BSESENSEX closed at a 30 month high. The intraweek high was 18,237 and the weekly close 18130. The BSESENSEX has gained 666 points in the year so far. This corresponds to a gain of 3.81% so far. The NSENIFTY similarly made an intraweek high of 5477.50 and closed at 5449.10, a gain of 248.05 points or 4.77%. What is significant is that the Dow Jones which is what the world tracks are just about neutral for the year down a mere 4 points. No doubt this year has been turbulent and there have been tough times for the global economy and Europe has caused a lot of concern. What however is worth pondering upon is the fact that we have had good corporate results, the monsoon seems to be good so far, the GDP is growing on expected lines between 8 and 9%, foreign inflows have been good but the million dollar question – why a mere 4-5% rise in almost seven months? Let us leave it at that and we could discuss this for the whole of next week.
The other significant event last week was the draft report submitted by SEBI appointed panel on the revised takeover code. The draft has been enclosed below and readers are welcome to put forth their suggestions which would be summarise and then posted on the SEBI website. There are quite a few good things in the draft but there are some issues which have not been properly addressed which need to be sorted out. More of the SEBI takeover guidelines during the coming weeks.
Coming to the week ahead we have futures for July series expiring on Thursday the 29th of July. The open interest build up has been witnessed and there could be sharp volatility in the four days to expiry. Secondly RBI announces its credit policy on Tuesday the 27th of July and I believe the CRR and SLR would be keenly watched. The RBI stance would indicate whether the interest rates are likely to change and move up as is being expected or they remain neutral at current levels.
On the IPO front, Engineers India Limited which is tapping the capital markets with its FPO for 3,36,93,600 shares would announce its price band on Monday the 26th of July. The issue opens on Tuesday the 27th of July and closes on Friday the 30th of July. The stock at closed at Rs 337.65 on Friday on the BSE. The pricing is crucial for the issue as generally Government issues whether they are FPO’s or IPO’s have not been receiving the response that is expected from Institutions or retail.
The second IPO is from SKS Microfinance which is offering through its IPO a fresh issue of 74,45,323 shares and by way of offer for sale of 93,46,256 shares. The total size of the issue would be 1,67,91,579 shares. The price band for this issue would also be announced on Monday and the issue would be opening on Wednesday the 28th of July and closing on Monday the 2nd of August. Though the issue is for a microfinance company the market capitalisation of the same would be substantially large. There is a lot of interest generated in the issue and it would be interesting to note what is the price band and how the company fares in terms of over-subscription.
The primary markets are again becoming active and the number of issues tapping the markets seems to be picking up. Post these couple of issues we seem to have another couple opening in the following week and this website would keep you posted about the same.
SEBI Draft report on the revised takeover code
