nifty rose from bottom with two IHS shown with green and red arrows
Wednesday, December 20, 2006
26 securities added in F&O from Dec 29
With reference to circulars no NSE/F&O/0014/2001 dated June 29, 2001, NSE/F&O/00272001 dated November 07, 2001, SEBI circular SMDRP/DNPD/CIR -26/2004/07/16 dated July 16, 2004, and approval received from SEBI, members are hereby notified that the following additional securities will be available for trading in F&O segment with effect from December 29, 2006 :
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1,100 cos hit 52-wk lows during bull run
Skeptics of the stock market rally never tire of pointing out that only a handful of shares have participated in the recovery between June till now. In the past 100 trading sessions, even as benchmark equity indices continued to soar, 1,100 companies listed on the BSE hit 52-week lows. But, supporters of the bull run argue there is a strong reason for the market to have ignored these companies. A majority, if not all, of these companies have seen their earnings decline over the past one year.
For the purpose of analysis, recent listings and companies whose comparative net profit figures were unavailable were excluded, leaving a total of 946 companies. These firms were categorised in the different groups and their group-wise four-quarter trailing net profit from September 2005 to September 2006 was analysed.
The hardest hit has been companies in the B2 Group comprising 420 companies, followed by B1 with 172 and S Group having 149 firms. At the same time, these B2 group companies posted a combined 24% decline in net profit over the past four quarters. This included 50 comp
anies whose bottomlines slipped into the red during this period.The combined net profit of the 946 companies has shown an increase of 23%, but that is mainly because high profits by a handful of them. In the A group, the combined net profit has risen by 28% from Rs 4,805 crore to Rs 6,157 crore. Here again, the increase is due to companies like National Aluminium, Canara Bank and Dena Bank, which together comprised about Rs 1,750 crore of increase in profit.
Similarly, the combined 25% rise in net profits in the B1 group was mainly because of companies like EID Parry and UB Holdings that together posted a net profit of over Rs 500 crore. In the Z group, the increase of 140% is due to the effect of one or two companies.
Harendra Kumar, head-research, ICICIDirect, says, “When a company hits a 52-week low, there is something fundamentally wrong with it. Just because the rally is happening, it does not mean that all companies in the industry are performing accordingly. There are large numbers of them unable to catch up with the growth witnessed by the industry. Their stock prices could have tumbled down due to various reasons like rising operational costs, increasing input costs and margin pressures, lacklustre sales growth and lack of entrepreneurial skill sets et al. It is the big companies that benefit first when the growth in the economy takes place.”
He says some of these stocks also provide an opportunity as investment candidates. This cannot be interpreted as a buy signal, but there are many stocks that represent value and investing opportunity for those who complain that they have missed the bus.
“There has been a sharp increase in the profitability of large companies like information technology, financial and financial services like banking that witnessed a four-month rally, beginning late July on the back of falling bond yields, lower loan losses and investment provisions, as seen in the September quarter profits. Many small industries have not been able to catch up with the productivity factor and that is reflecting the stock prices of these companies,” says another analyst.
ITC to Tap `New Areas' in Consumer Products
ITC Ltd., India's biggest tobacco maker and second-largest hotel operator, plans to tap ``new areas'' in consumer products to cut dependence on its tobacco business, which faces high taxes and advertisement curbs.
The Kolkata-based company plans to sell ``fast-moving consumer goods,'' Chairman Y.C. Deveshwar told reporters in New Delhi today, without specifying the products or by when it plans to start selling the new products.
ITC, set up in 1910, has in the past six years added businesses such as food, matches, apparel, deodorants, greeting cards and rural retail stores to reduce its reliance on tobacco, which contributes to about half of sales. Analysts such as Abhijeet Kundu expect ITC to start selling soaps and detergents, putting it in direct competition with the local units of Unilever and Procter & Gamble Co.
``It may turn out to be a good move in the long term but may delay the projected breakeven of its non-tobacco business because of higher advertisement spending,'' said Kundu, an analyst with Prabhudas Lilladher Securities in Mumbai, who has a ``buy'' rating on ITC stock. ``The introduction of soaps and detergents may hurt Hindustan Lever in the long term.''
Stock Performance
Shares of ITC fell 5.8 rupees, or 3.3 percent, to 168.35 rupees at the close on the Bombay Stock Exchange. The exchange's benchmark Sensitive Index declined 2.5 percent today.
ITC, 32 percent owned by British American Tobacco Plc, is aiming to exploit the access it has to shops in the nation's 4,378 towns and 638,000 villages to sell products ranging from food to match boxes.
``It is our objective to strive to gain a position of leadership not only in areas we have already entered but newer areas,'' Deveshwar said. ``Our people are hard at work. Our product development, our research and development activity is working round the clock.''
In July 2005, ITC started selling perfumes and deodorants.
ITC plans to set up fresh-food stores in 54 locations in the country over the next three years, Deveshwar said. ITC opened its first fresh-food store, called Choupal Fresh, in August in the southern Indian city of Hyderabad.
The company has set up a network of 6,400 Internet kiosks called e-Choupals and 11 supermarkets called Choupal Sagars. The e-Choupals give farmers access to a company Web site where they can see prices of agricultural produce, browse for new seeds or equipment and check the weather.
The Choupal Sagars buy farm produce and offer a range of services such as soil testing and advice to farmers on new farming practices, buying produce from cultivators and selling them a range of products such as toothpastes and mobile phones.
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