Prudent not charmed by Mid-Day

STREET SIGNS

After a brief stopover earlier in the week, bulls continued on their merry ways. The Sensex clocked a rise of 100 points for the second day in succession, climbing the 8,700-mark.

What is more - the all-time high peak of 8799 now seems to be well within the bull's grasp, provided foreign funds don't act funny. Short covering due to the expiry of November futures was said to be the reason behind Thursday's gains.

Not optimistic
The Standard Fund was a seller at the Sterlite Optical counter. The fund is said to have sold more than 3.8 lakh shares at the Rs 93 levels. This, despite some positive news flow at the counter recently.

The company, India's leading integrated manufacturer of optical fibres and telecom cables, has recently been awarded two contracts for supplying fibre optic cables to Sri Lanka Telecom.

The contracts from Sri Lanka Telecom have a combined value of over Rs 3.22 crore and deliveries would be completed within the next month. Sterlite Optical Technologies was successful recently in the SAARC region with commencement of supplies of copper telecom cables to Bhutan Telecom and supplies of fibre optic cables to Bhutan, Nepal and Bangladesh.

Besides, the company has a presence in China too, where it enjoys a 7 per cent market share. Sterlite Optical announced a net profit of Rs 1.17 crore for the quarter ended 30 September, 2005, as compared to Rs 5.03 crore for the quarter ended 30 September, 2004. Total income also went up from Rs 85.85 crore in Q2 FY05, to Rs 124.43 crore in the past quarter.

It might be that the declining stock trends in stock prices have swayed Standard Fund's judgment. The stock has declined from the Rs 124 levels at the end of August, to the Rs 80 levels recently.

Against the tide
Prudent Fund was also seen to be swimming against the tide. On a day when the Mid-Day Multimedia stock surged 19 per cent to the Rs 98 levels, the fund was seen selling 2.3 lakh shares at the counter.

With those in the know expressing serious worries about valuations of media stocks, Prudent may have been looking for a profitable exit option. The stock had seen big buying interest on reports that BBC Worldwide plans to enter the Indian FM radio industry by acquiring up to 20 per cent equity in Radio Mid-Day of Mumbai, a private FM radio operator.

Mid-Day Multimedia owns 82.98 per cent of Radio Mid-Day. BBC Worldwide has an approval from its board to invest up to Rs 55 crore in the Indian FM radio sector.

In its application to the Foreign Investment Promotion Board (FIPB), the company has not specified the money it will spend on acquiring the stake in Radio Mid-Day. Last week, the government decided to allow foreign direct investment (FDI) up to 20 per cent in FM radio services.

In other news...
Operators were busy getting on to the just debuted PBA Infrastructure stock. The stock closed its first day of listing at Rs 68.45, up 14.08 per cent from its initial offer price of Rs 60.