Street Signs

SMART EYE

All it took for the markets to bounce back was the PM's rare televised address to the nation. Well, to a certain extent at least. Dr Manmohan Singh provided some nice little sound bytes about fiscal discipline and free movement of agricultural goods which sort of soothed nervous investors.

Not to forget, bargain hunters, too, were in action on Thursday and Friday after four consecutive sessions of losses. Worries about climbing inflation had forced investors to stay at home earlier in the week as volumes dipped.

The weakening economic indicators are also scaring Frangipani away who are still on the sell mode. Old economy scrips did show some strength towards the latter part of the week, though Lending Brokerage's displeasure with pharma and PSU banking scrips continued to drag down those counters.

The prominent seller's list is said to feature Life Boy and Phoenix Fund, though the latter has been making some buys in select counters, of late.

Of course, there are still fears that the government's populist measures may distort the fiscal balance, but those apprehensions can wait for the moment. At least till July 8th.

Wimco wobbles
Nobody knows why our All Cap Fund is selling off its holdings at counters like Wimco and Uniphos Enterprises. Last week the fund sold nearly 2.50 lakh shares of match-maker Wimco at Rs 22.02 and more than six lakh shares of Uniphos Enterprises at Rs 9.

While such drastic steps can be explained away at the Uniphos counter - the stock has lost nearly 96 per cent y-o-y anyway - what exactly is the crime of Wimco is anybody's guess.

True, the stock has not exactly set the Ganges on fire either (declining 18 per cent y-o-y). May be what has got the goat of All Cap Fund is the fact that the Swedish match-maker, owners of such renowned brands such as Homelites and Ship matches, is planning to turn into a FMCG player.

The company now wants to be a wholesale trader of toiletries, shaving kits, cosmetics, soap, washing powder and confectionery. Not done. Except that some men have a tendency to light up in toilets, we can't see any business connections between the above mentioned articles. But to be fair to Wimco, it is planning to introduce a range of cigar brands, too.

Changing spots
Now this is stretching things too far. Tumble Ton's pharma fund has gone ahead and bought - believe it or not - tech scrip MphasiS BFL. And that too nothing less than 3.37 lakh of shares at Rs 240.

Interestingly, MphasiS' holding company itself sold the shares. The unkind are now saying that with the current downturn in pharma fortunes - thanks mainly to an across-the-board downgrade by Lending Brokerage - sectoral pharma funds will now have to look elsewhere for keeping their heads above water.

The brokerage is very worried that Indian generic companies many not have the ability to sustain growth momentum, both in terms of revenues and profits.

The argument is that with the rapid commoditisation of the generics market, lots of Indian players are competitively positioned, making it difficult to sustain margins.

With most other sectors also feeling the heat, the only way to go forward was to jump on to the IT bandwagon, which is thought to be among the rare sectors that are insulated from government policy changes.

Incidentally pharma was another one of those 'insulated' sectors - till Lending Brokerage decided to play spoil sport.