One of the main reason for foreign funds turning buyers is that they were sitting on liquid cash after being aggressive sellers at higher levels. A section of the players feel that India-dedicated funds cannot justify their demand for higher allocation from their global parents if they are holding liquid cash. Also, the objective to show a better net asset value (NAV) for their funds (now that the year is drawing to a close), is making fund managers to pump in money to prop up the values of their key holdings.
Results time
With the third quarter nearing an end, players have once again started flocking to software counters in anticipation of excellent results. The grapevine is that Infosys will be able to post more than 100 per cent growth in net profit. This is reported to be one of the main reasons for the renewed buying interest at the counter.
More From This Section
A similar candidate is Satyam Computer. Nearly 5 lakh shares are reported to have been warehoused over the last couple of trading session on behalf of institutional players.
Going strong
The Voltas scrip vaulted to new 52-week highs yesterday on the back of frenzied buying interest. Jardine Fleming India Broking is aggressively recommending the stock to its clients. According to their research report on the stock, Voltas differs from other turnaround stories as it has attractive residual businesses with strong marketshares and good growth potential. The company's risk premium has reduced as it is repaying debt with the divestment of its white goods and chemical division. The brokerage feels that the fair value of Voltas's stock is Rs 138 which should be achieved over the next 12 months as the benefits of restructuring start materialising.
A different view
A leading foreign brokerage has decide to look at the HLL balance sheet from a different perspective. The brokerage feels that the company's advertisement expenditure of Rs 150 crore should not be seen as a revenue expenditure but as a capital expenditure. They argue that the benefits of expenditure will be reaped over a period of time. If the balance sheet is seen in this manner, the earnings of the company becomes much more attractive. There seems to be enough takers for this theory. Close to 3.5 lakh shares of HLL are reported to have been picked up over the last couple of trading sessions, pushing it to new all time highs.
Reversing trend
After witnessing sustained selling pressure earlier in the week, the Zee Telefilms scrip managed to hold steady yesterday. Except for a purchase order of 50,000 shares by a local fund, the recovery in prices was attributed to short-covering. A cause of concern for punters at the counter is that massive sales at the counter has not been absorbed by investors. In fact, the chunk has passed into the hands of leading players who are now waiting to unload at higher levels. The price movement in the coming days will depend on how the players can further hold on to their positions. If no fresh buying interest from funds emerge at the counter, a further downslide from current levels cannot be ruled out.
Glaxo steady
Sustained buying continued at pharma stocks. However, one stock that has been on the sell list of a foreign fund is HMR. For the second day in running, the fund offloaded 30,000 shares from its portfolio. Other pharma stocks have witnessed some profit-booking in the last two trading sessions. Glaxo is a counter which seems to be holding steady. The bears, it seems, have been trapped at this counter. With every jump in stock price, the bears have been firming their grip at the counter. The net position has gone up to 70,000 shares yesterday.