Thursday, 2 August 2007
Volatile Market Investing
It is easy to be complacent in a rising stock market. There is only one question they want answered and it is something like "What stock should I buy now?"
When the market reverses and starts a downward journey, that’s the time investers begin urgently seeking answers to an entirely different set of questions. What should I do now? Do I hang in there? Sell everything and move to cash? Is this a buying opportunity? Should I temporarily move to the sidelines and then jump back in when the stock market turns around? How long is this down market likely to last?
Market declines can be unsettling and even outright scary. You’ve probably asked these questions at some point in your investing life. Hopefully, you have asked your financial advisor another sort of question: Can you help me construct my financial program to last and help me reach my long-term goals?
If you and your financial adviser have already created such a program, you likely already know the answers to the questions above. For the people who have set up a long-term plan, the best thing they can do is - nothing. Long-term investors in a declining market will do nothing that upsets their established program.
Go Back To Basics
Market declines present an opportunity to discover how solid your financial program is. Any weakness will show up. That’s why this is a good time to chechk on four basic investment fundamentals to help you survive a down market - and perhaps even take advantage of it.
Diversify
Spreading your risk by investing in a carefully selected mix of mutual funds that invest in stocks, bonds and money market instruments is a good idea any time. In the global marketplace we have today, consider diversifying into an international or global fund. Although the U.S. stock market has an impact around the world, other markets move in different economic and national cycles. While your U.S. stock funds may show losses, diversified international funds may lose less or even gain.
Keep a Long-Term Perspective
Time in the market is important - not timing. Diversified investment portfolios are not immune to a bear market, and it’s tempting to dump all your stock funds. Waiting in a money market account for better times seems like a smart thing to do, so you are ready to buy into the market when the recovery begins.
How do you know when the market recover begins? What day is the right day to buy more stock? If you miss the right time, you might lose a large part of the profits. If you had missed the 10 best days of the S&P 500 Stock Composite Index between January 1, 1990 and December 31, 1999 your return would been 41% lower than if you were in the market for the full 10 years.
Invest in Bad Times and Good
The single best way to invest regularly is called dollar cost averaging. This strategy calls for investing the same amount at consistent intervals, such as once a month, every quarter or even every pay period. By doing this, you don’t have to try to guess which way the financial markets will move and you won’t be waiting around for the right time to buy.
Using the dollar cost averaging method is one way to take advantage of a down market. As you invest regularly, you end up buying more shares when the price is down. View a down market as an opportunity to buy good companies at lower prices.
Don’t Forget Those Dividends
Even when company share prices will be impacted by a bear market, this doesn’t mean that the companies themselves are doing poorly. Many companies pay dividends at the same rate during a bear market as during a bull market.
Market Declines Are Natural
A few facts that might help put market declines in perspective. Like the seasons, they are a natural part of the landscape. Since 1900, there have been 285 “routine declines” of 5% or more, 91 “moderate corrections” of 10% or more, 43 “severe corrections” of 15% or more and 26 “bear markets” of 20% or more. If that doesn’t show declines are part of being in the stock market, then what will..
Even if you haven’t lived through a really tough bear market, you’ve probably seen a lot of volatility. When you chose a good financial adviser, you will be in good shape to withstand the next down market
Roger Sorensen
When the market reverses and starts a downward journey, that’s the time investers begin urgently seeking answers to an entirely different set of questions. What should I do now? Do I hang in there? Sell everything and move to cash? Is this a buying opportunity? Should I temporarily move to the sidelines and then jump back in when the stock market turns around? How long is this down market likely to last?
Market declines can be unsettling and even outright scary. You’ve probably asked these questions at some point in your investing life. Hopefully, you have asked your financial advisor another sort of question: Can you help me construct my financial program to last and help me reach my long-term goals?
If you and your financial adviser have already created such a program, you likely already know the answers to the questions above. For the people who have set up a long-term plan, the best thing they can do is - nothing. Long-term investors in a declining market will do nothing that upsets their established program.
Go Back To Basics
Market declines present an opportunity to discover how solid your financial program is. Any weakness will show up. That’s why this is a good time to chechk on four basic investment fundamentals to help you survive a down market - and perhaps even take advantage of it.
Diversify
Spreading your risk by investing in a carefully selected mix of mutual funds that invest in stocks, bonds and money market instruments is a good idea any time. In the global marketplace we have today, consider diversifying into an international or global fund. Although the U.S. stock market has an impact around the world, other markets move in different economic and national cycles. While your U.S. stock funds may show losses, diversified international funds may lose less or even gain.
Keep a Long-Term Perspective
Time in the market is important - not timing. Diversified investment portfolios are not immune to a bear market, and it’s tempting to dump all your stock funds. Waiting in a money market account for better times seems like a smart thing to do, so you are ready to buy into the market when the recovery begins.
How do you know when the market recover begins? What day is the right day to buy more stock? If you miss the right time, you might lose a large part of the profits. If you had missed the 10 best days of the S&P 500 Stock Composite Index between January 1, 1990 and December 31, 1999 your return would been 41% lower than if you were in the market for the full 10 years.
Invest in Bad Times and Good
The single best way to invest regularly is called dollar cost averaging. This strategy calls for investing the same amount at consistent intervals, such as once a month, every quarter or even every pay period. By doing this, you don’t have to try to guess which way the financial markets will move and you won’t be waiting around for the right time to buy.
Using the dollar cost averaging method is one way to take advantage of a down market. As you invest regularly, you end up buying more shares when the price is down. View a down market as an opportunity to buy good companies at lower prices.
Don’t Forget Those Dividends
Even when company share prices will be impacted by a bear market, this doesn’t mean that the companies themselves are doing poorly. Many companies pay dividends at the same rate during a bear market as during a bull market.
Market Declines Are Natural
A few facts that might help put market declines in perspective. Like the seasons, they are a natural part of the landscape. Since 1900, there have been 285 “routine declines” of 5% or more, 91 “moderate corrections” of 10% or more, 43 “severe corrections” of 15% or more and 26 “bear markets” of 20% or more. If that doesn’t show declines are part of being in the stock market, then what will..
Even if you haven’t lived through a really tough bear market, you’ve probably seen a lot of volatility. When you chose a good financial adviser, you will be in good shape to withstand the next down market
Roger Sorensen
Choppy but Flat
The Sensex slipped into the red immediately after a positive start, but rebounded as buying began at the lower levels. The market gained amid choppy trading as bargain hunting for blue-chips began, overlooking the weak Asian indices and yesterday's drop of over 600 points. The Sensex got a boost in the afternoon trades after some Asian markets, especially Japan and Taiwan, managed to recover. The sustained buying in capital goods, banking and realty stocks saw the index touch the day's high of 15,135. However, profit bookings in late trades saw the Sensex shed most of its gains and the index to touch yesterday's close. However, hectic buying at the lower levels helped the Sensex to recover and end the session on a firm note by gaining 50 points at 14,986. The Nifty closed the session at 4,356, up 11 points.
The breadth of the market was positive, with the gainers outpacing the losers in the ratio of 1.09:1. Of the 2,636 stocks traded on the BSE, 1,338 stocks advanced, 1,225 stocks declined and 73 stocks ended unchanged. Most of the sectoral indices closed with significant gains. The BSE CD index was the major gainer and soared 2.06% followed by the BSE Realty index (up 1.71%) and the BSE Bankex index (up 1.51%).
Most of the heavyweights gained on the BSE. Among the blue chips, SBI shot up by 2.87% at Rs1,593, Tata Steel soared 2.65% at Rs639,Reliance Communication surged 2.15% at Rs542, BHEL advanced by 2.13% at Rs1,699, Reliance Energy added 2.01% at Rs752, Maruti Udyog moved up 1.86% at Rs836, ACC scaled up 1.78% at Rs983 and Dr Reddy's Lab was up 1.37% at Rs631. Among the laggards, Wipro dropped 2.83% at Rs462, M&M slipped 2.59% at Rs676 and Tata Motors shed 2.23% at Rs652 while TCS, Infosys and ONGC fell over 1% each.
Consumer durables stocks were in the limelight and closed with strong gains. Gitanjali Gems jumped 6.13% at Rs270, Blue Star soared 5.03% at Rs291, Titan Industries surged 2.61% at Rs1132 and Videocon Industries added 1.47% at Rs373.
Over 2.60 crore IFCI shares changed hands on the BSE followed by Faccor Alloys (82.84 lakh shares), Reliance Natural Resources (74.10 lakh shares), Spice Telesystems (52.33 lakh shares) and IKF Technologies (38.28 lakh shares).
SBI clocked a turnover of Rs179 crore on the BSE followed by Everonn Systems (Rs154 crore), Reliance industries (Rs150 crore), IFCI (Rs146 crore) and Housing Development & Infrastructure (Rs143 crore).
The breadth of the market was positive, with the gainers outpacing the losers in the ratio of 1.09:1. Of the 2,636 stocks traded on the BSE, 1,338 stocks advanced, 1,225 stocks declined and 73 stocks ended unchanged. Most of the sectoral indices closed with significant gains. The BSE CD index was the major gainer and soared 2.06% followed by the BSE Realty index (up 1.71%) and the BSE Bankex index (up 1.51%).
Most of the heavyweights gained on the BSE. Among the blue chips, SBI shot up by 2.87% at Rs1,593, Tata Steel soared 2.65% at Rs639,Reliance Communication surged 2.15% at Rs542, BHEL advanced by 2.13% at Rs1,699, Reliance Energy added 2.01% at Rs752, Maruti Udyog moved up 1.86% at Rs836, ACC scaled up 1.78% at Rs983 and Dr Reddy's Lab was up 1.37% at Rs631. Among the laggards, Wipro dropped 2.83% at Rs462, M&M slipped 2.59% at Rs676 and Tata Motors shed 2.23% at Rs652 while TCS, Infosys and ONGC fell over 1% each.
Consumer durables stocks were in the limelight and closed with strong gains. Gitanjali Gems jumped 6.13% at Rs270, Blue Star soared 5.03% at Rs291, Titan Industries surged 2.61% at Rs1132 and Videocon Industries added 1.47% at Rs373.
Over 2.60 crore IFCI shares changed hands on the BSE followed by Faccor Alloys (82.84 lakh shares), Reliance Natural Resources (74.10 lakh shares), Spice Telesystems (52.33 lakh shares) and IKF Technologies (38.28 lakh shares).
SBI clocked a turnover of Rs179 crore on the BSE followed by Everonn Systems (Rs154 crore), Reliance industries (Rs150 crore), IFCI (Rs146 crore) and Housing Development & Infrastructure (Rs143 crore).
Technical outlook for August 2,2007
If last Friday was bad, Wednesday was worse for the markets as the
benchmark Indices closed deep in the red (4% down). It was a total
carnage with every support melting down as a hot knife passing
through the butter. The Bears attacked the pillars of the rally RIL
and SBI, as a result; the rest was just a formality as is seen from
the A/D ratio (1:5). Of the Sectoral Indices, the BSE Realty was the
worst hit. Volumes were higher during the fall.
As expected we saw a pullback in the Nifty hitting 4,532 points but
from the opening bell we witnessed bull liquidation probably from
the positional players coupled with some short selling. The impact
of the fall was so severe that the Nifty touched the S1 of the month
i.e. 4,339 points on the first day itself. We are seeing a lower top
formation in the Nifty. Unless the Nifty decisively closes above
4,535 points, upside is capped at the moment.
The 50% retracement in the Sensex is at 18,910 points was almost
achieved yesterday while immediate support in the Nifty is at 4,310
points (61.8% retracement of 4,100-4,647 points rally). The newly
drawn trendline in brown is currently pegged at 4,291 points. High
risk intraday traders can go longs with a strict stop loss below 4,282
points. Resistance in rallies is pegged is pegged at 4406 points.
Trade with caution as volatility is likely to prevail for couple of
sessions more.
benchmark Indices closed deep in the red (4% down). It was a total
carnage with every support melting down as a hot knife passing
through the butter. The Bears attacked the pillars of the rally RIL
and SBI, as a result; the rest was just a formality as is seen from
the A/D ratio (1:5). Of the Sectoral Indices, the BSE Realty was the
worst hit. Volumes were higher during the fall.
As expected we saw a pullback in the Nifty hitting 4,532 points but
from the opening bell we witnessed bull liquidation probably from
the positional players coupled with some short selling. The impact
of the fall was so severe that the Nifty touched the S1 of the month
i.e. 4,339 points on the first day itself. We are seeing a lower top
formation in the Nifty. Unless the Nifty decisively closes above
4,535 points, upside is capped at the moment.
The 50% retracement in the Sensex is at 18,910 points was almost
achieved yesterday while immediate support in the Nifty is at 4,310
points (61.8% retracement of 4,100-4,647 points rally). The newly
drawn trendline in brown is currently pegged at 4,291 points. High
risk intraday traders can go longs with a strict stop loss below 4,282
points. Resistance in rallies is pegged is pegged at 4406 points.
Trade with caution as volatility is likely to prevail for couple of
sessions more.
Wednesday, 1 August 2007
Know some thing about Straddle
What is a Straddle?
A Straddle is a strategic option combination which is adopted when you are not sure about whether the underlying will go up or down, but are certain that one of the two movements will happen.Readers should appreciate that accounting guidelines do not relate to tax issues which are decided by the Ministry of Finance along with the Central Board of Direct Taxes. This article covers only Accounting of Derivatives. Tax issues will be discussed in a later Article.
For example, last week, there was a proposal for disinvestments proposal for HPCL and BPCL. The Government was expected to take some stand on the issue. What the stand will be was not unknown. But some pronouncement was expected. If the pronouncement were positive, the shares would have gone up substantially and if the pronouncement were negative, the shares would have gone down substantially.
This is an excellent opportunity to buy a straddle.
What do I buy in a Straddle?
You buy one call and one put together in a Straddle, generally at the money. For example, if HPCL was quoting at Rs 220, you would buy one 220 Call and one 220 Put at this time.
If HPCL moves up, the call will rise in value and the put will fall. The net amount will be positive if the HPCL movement is substantial. On the other hand, if HPCL moves down, the put will rise in value and the call will fall. Again, the net amount will be favourable if the HPCL downward movement is significant.
What could be good times for a straddle?
Major pronouncements like divestment, budget time, acquisitions announcements by companies, lawsuits to be decided on a particular day (this may be relevant for the pharmaceutical industry where major foreign lawsuits could decide whether generic and other pharma products could be sold by Indian companies in the US under patent regulations or not) are good times to buy straddles.
What can go wrong?
If the underlying fails to move either way and stays where it is, you would lose your time value of both options as both options would fall with passage of time. If your strategy is announcement related and the announcement is a rather mixed one with some positives and some negatives, the market may not move at all.
Your maximum loss is restricted to the total amount you paid for the call and the put taken together. In practice, this maximum loss will almost never happen. For example if you bought the HPCL 220 Call and the 220 Put for Rs 30, you will lose the entire Rs 30 only if HPCL closes on the last Thursday (expiry day) at exactly Rs 220. If it closes above Rs 220, you will get some payoff from the Call and if it closes below Rs 220, you will get some payoff from the Put.
How long should I wait?
If your strategy was pronouncement related, you should wait at least one or two days after the pronouncement. If it moves up or down substantially, you could square up your position, pocket profits and exit.
If it does not move, you should consider waiting depending on whether some further pronouncements are expected (sometimes clarifications follow after some time).
If your strategy was not pronouncement related, then you should develop clear rules for entry and exit. This depends upon your market knowledge and derivatives knowledge. For example, some traders will stay in a straddle for only 10 days. If the underlying does not move in 10 days, they will square up and look for another opportunity elsewhere.
What is a good price for a Straddle?
It may happen many times that there is a good opportunity for a Straddle (say the HPCL announcement) but when you look at the market to buy the Straddle, options are very expensive. Last week, we found that Calls on HPCL were quoting at 55% implied volatility when the historical volatility was in the range of 35 to 40%.
It is a difficult decision to take whether you should buy the Calls (and Puts) even though they are so expensive or not. If HPCL moves substantially, you will make a good profit even after paying an expensive price.
Some experts therefore say that the only good Options to buy are the expensive ones. The logic behind this statement is that the market already knows that something big is expected to happen and has accordingly priced the Option. If something big actually happens, you can gain inspite of the high price you paid.
On the other hand, you could play conservative and decide that you will buy Straddles only if they are reasonably priced. For example, you could have a policy where you will buy only if the Implied Volatility is within 5% of the Historical Volatility. If it is priced higher, you will not enter into a Straddle
A Straddle is a strategic option combination which is adopted when you are not sure about whether the underlying will go up or down, but are certain that one of the two movements will happen.Readers should appreciate that accounting guidelines do not relate to tax issues which are decided by the Ministry of Finance along with the Central Board of Direct Taxes. This article covers only Accounting of Derivatives. Tax issues will be discussed in a later Article.
For example, last week, there was a proposal for disinvestments proposal for HPCL and BPCL. The Government was expected to take some stand on the issue. What the stand will be was not unknown. But some pronouncement was expected. If the pronouncement were positive, the shares would have gone up substantially and if the pronouncement were negative, the shares would have gone down substantially.
This is an excellent opportunity to buy a straddle.
What do I buy in a Straddle?
You buy one call and one put together in a Straddle, generally at the money. For example, if HPCL was quoting at Rs 220, you would buy one 220 Call and one 220 Put at this time.
If HPCL moves up, the call will rise in value and the put will fall. The net amount will be positive if the HPCL movement is substantial. On the other hand, if HPCL moves down, the put will rise in value and the call will fall. Again, the net amount will be favourable if the HPCL downward movement is significant.
What could be good times for a straddle?
Major pronouncements like divestment, budget time, acquisitions announcements by companies, lawsuits to be decided on a particular day (this may be relevant for the pharmaceutical industry where major foreign lawsuits could decide whether generic and other pharma products could be sold by Indian companies in the US under patent regulations or not) are good times to buy straddles.
What can go wrong?
If the underlying fails to move either way and stays where it is, you would lose your time value of both options as both options would fall with passage of time. If your strategy is announcement related and the announcement is a rather mixed one with some positives and some negatives, the market may not move at all.
Your maximum loss is restricted to the total amount you paid for the call and the put taken together. In practice, this maximum loss will almost never happen. For example if you bought the HPCL 220 Call and the 220 Put for Rs 30, you will lose the entire Rs 30 only if HPCL closes on the last Thursday (expiry day) at exactly Rs 220. If it closes above Rs 220, you will get some payoff from the Call and if it closes below Rs 220, you will get some payoff from the Put.
How long should I wait?
If your strategy was pronouncement related, you should wait at least one or two days after the pronouncement. If it moves up or down substantially, you could square up your position, pocket profits and exit.
If it does not move, you should consider waiting depending on whether some further pronouncements are expected (sometimes clarifications follow after some time).
If your strategy was not pronouncement related, then you should develop clear rules for entry and exit. This depends upon your market knowledge and derivatives knowledge. For example, some traders will stay in a straddle for only 10 days. If the underlying does not move in 10 days, they will square up and look for another opportunity elsewhere.
What is a good price for a Straddle?
It may happen many times that there is a good opportunity for a Straddle (say the HPCL announcement) but when you look at the market to buy the Straddle, options are very expensive. Last week, we found that Calls on HPCL were quoting at 55% implied volatility when the historical volatility was in the range of 35 to 40%.
It is a difficult decision to take whether you should buy the Calls (and Puts) even though they are so expensive or not. If HPCL moves substantially, you will make a good profit even after paying an expensive price.
Some experts therefore say that the only good Options to buy are the expensive ones. The logic behind this statement is that the market already knows that something big is expected to happen and has accordingly priced the Option. If something big actually happens, you can gain inspite of the high price you paid.
On the other hand, you could play conservative and decide that you will buy Straddles only if they are reasonably priced. For example, you could have a policy where you will buy only if the Implied Volatility is within 5% of the Historical Volatility. If it is priced higher, you will not enter into a Straddle
Two knocks - Rs2.53 trillion out
Close to 45% of the total loss, or more than Rs1,13,000 crore, has been seen in the country’s 30 biggest blue chip firms
Investors have seen over Rs2.5 trillion going down the drain at Dalal Street with the Sensex suffering two major blows in less than a week.
The benchmark Sensex on 1 August plunged by 615.22 points, its third biggest single-day fall in terms of absolute value, which came within a week of the index losing 542 points on 27 July — the sixth biggest one-day fall so far.
The investors went poorer by Rs1,85,000 crore on 1 August, while the loss was close to Rs1,58,000 crore on 27 July, measured in terms of the total market capitalisation of all the listed companies.
Total investor wealth has gone down by close to Rs2,53,000 crore since 26 July, with the Sensex losing about 840 points in just five trading sessions.
At the end of the 1 August session, total market cap stood at about Rs43,48,000 crore, down from over Rs46,00,000 crore on July 26.
Close to 45% of the total loss, or more than Rs1,13,000 crore, has been seen in the country’s 30 biggest blue chip firms.
Reliance Industries, the country’s most valued firm, saw its market value plummet by nearly Rs20,000 crore since 26 July, while the second-biggest firm on the BSE, ONGC, saw an erosion of over Rs13,000 crore in the same period.
Reliance Communications and Bharti Airtel saw a fall of Rs8,000 crore and Rs11,000 crore respectively in their market values, while Infosys suffered a loss of about Rs6,000 crore.
The benchmark Sensex on 1 August plunged by 615.22 points, its third biggest single-day fall in terms of absolute value, which came within a week of the index losing 542 points on 27 July — the sixth biggest one-day fall so far.
The investors went poorer by Rs1,85,000 crore on 1 August, while the loss was close to Rs1,58,000 crore on 27 July, measured in terms of the total market capitalisation of all the listed companies.
Total investor wealth has gone down by close to Rs2,53,000 crore since 26 July, with the Sensex losing about 840 points in just five trading sessions.
At the end of the 1 August session, total market cap stood at about Rs43,48,000 crore, down from over Rs46,00,000 crore on July 26.
Close to 45% of the total loss, or more than Rs1,13,000 crore, has been seen in the country’s 30 biggest blue chip firms.
Reliance Industries, the country’s most valued firm, saw its market value plummet by nearly Rs20,000 crore since 26 July, while the second-biggest firm on the BSE, ONGC, saw an erosion of over Rs13,000 crore in the same period.
Reliance Communications and Bharti Airtel saw a fall of Rs8,000 crore and Rs11,000 crore respectively in their market values, while Infosys suffered a loss of about Rs6,000 crore.
IPO Update: June & July 2007
With Indian indices rallying to all-time highs, how could the IPO market remain behind. Here are the latest IPOs listed on the NSE in June & July - even accounting for the 2 losers, the average return has been ~40% (although over differing periods).
Coming attractions:
- Bids in: Central Bank of India, IVR Prime Urban Developers, Omnitech Infosolutions, Zylog Systems, Omaxe, Alpa Laboratories, Simplex Projects, Everonn Systems India
- New releases: Asian Granito, SEL Manufacturing Company,Purvankara Projects
Puravankara Projects
PRICING MARS PREMIUM PROJECT
MAX. ISSUE SIZE (Rs) : 1127 crore
PRICE BAND (Rs) : 500 -- 525
ISSUE OPENS/CLOSES : 31stJuly to 3rdAugust, 2007
LISTING : NSE, BSE.
This company is a prominent player in the residential real estate segment in Southern India, and it now proposes to tap the commercial segment too.
Puravankara’s properties are spread across the southern cities and towns of Chennai, Kochi, Hyderabad, Mysore and Coimbatore, besides its holding of 1.38 million sq ft land in Colombo. Notably though, close to three-fourth (73 per cent) of its land holding is concentrated in Bangalore.
This company also has a joint venture agreement a Singapore-based company, Keppel Investment, which should enhance its execution capabilities. Rs.1,127 crore are proposed to be raised through the IPO route primarily to fund land acquisition and repay debts.
Puravankara’s USP is the clarity of ownership in its land-bank. 14 million square feet of the developable area of 116 million square feet already has ongoing projects in them. Similarly, 65 per cent of the total land-bank is owned by the company itself, whereas only 6 per cent of the land is on sole development rights where the title lies with the owner, thereby giving the company only development rights.
On the flip side, the first and larger of the two major concerns revolve around the company’s geographical concentration in southern India, and more particularly in Bangalore. The other concern revolves around the company’s over-leveraged status with its debt-equity ratio approximating 3. This concern however, will be addressed as part-extinguishment of debts is part of the IPO objectives.
The financials appear satisfactory, with the company’s topline reflecting a CAGR of over 50 per cent over the past four years. Its operating margins which have been in excess of 30 per cent during the same time frame too reflect good performance.
So far, so good. However, where the company seems to have erred is on the pricing front. With companies like Sobha Developers which arguably has a broader business model and IVR Prime with the backing of a strong parent as competitors, it seems that this company would have been better served by a more modest price demand. At the offer price level, investors would need to bet more on the real estate boom at the bourses picking steam than on the company’s fundamentals in the near term.
MAX. ISSUE SIZE (Rs) : 1127 crore
PRICE BAND (Rs) : 500 -- 525
ISSUE OPENS/CLOSES : 31stJuly to 3rdAugust, 2007
LISTING : NSE, BSE.
This company is a prominent player in the residential real estate segment in Southern India, and it now proposes to tap the commercial segment too.
Puravankara’s properties are spread across the southern cities and towns of Chennai, Kochi, Hyderabad, Mysore and Coimbatore, besides its holding of 1.38 million sq ft land in Colombo. Notably though, close to three-fourth (73 per cent) of its land holding is concentrated in Bangalore.
This company also has a joint venture agreement a Singapore-based company, Keppel Investment, which should enhance its execution capabilities. Rs.1,127 crore are proposed to be raised through the IPO route primarily to fund land acquisition and repay debts.
Puravankara’s USP is the clarity of ownership in its land-bank. 14 million square feet of the developable area of 116 million square feet already has ongoing projects in them. Similarly, 65 per cent of the total land-bank is owned by the company itself, whereas only 6 per cent of the land is on sole development rights where the title lies with the owner, thereby giving the company only development rights.
On the flip side, the first and larger of the two major concerns revolve around the company’s geographical concentration in southern India, and more particularly in Bangalore. The other concern revolves around the company’s over-leveraged status with its debt-equity ratio approximating 3. This concern however, will be addressed as part-extinguishment of debts is part of the IPO objectives.
The financials appear satisfactory, with the company’s topline reflecting a CAGR of over 50 per cent over the past four years. Its operating margins which have been in excess of 30 per cent during the same time frame too reflect good performance.
So far, so good. However, where the company seems to have erred is on the pricing front. With companies like Sobha Developers which arguably has a broader business model and IVR Prime with the backing of a strong parent as competitors, it seems that this company would have been better served by a more modest price demand. At the offer price level, investors would need to bet more on the real estate boom at the bourses picking steam than on the company’s fundamentals in the near term.
Third biggest fall ever
Local share prices suffered severe setback today, 1 August 2007, on global meltdown. After opening weak, influenced by US markets, the market kept on declining further on intense selling pressure. Weak Asian and European markets dampened the sentiment further. The BSE 30-share Sensex declined below the physcological 15,000 mark and the Nifty fell below 4,400.
All the sectoral indices on BSE tumbled with shares from the real-estate pack suffering the most. Everonn Systems India posted strong show on day 1, settling at 242% premium over issue price. Turnover on BSE surged in today's market fall.
The 30-shares BSE Sensex plunged 615.22 points or 3.96% to settle at 14,935.77. This was the third biggest single day point fall in Sensex ever. It opened with a downward gap of 207 points at 15,344.02 and kept on falling to touch a low of 14,910.52 at 15:12 IST on intense selling pressure. As per market talks, a lot of margin calls may have accentuated fall. Margin selling emerges when there are leveraged positions.
The S&P CNX Nifty slumped 183 points, or 4.04%, to 4,345.85. The Nifty August 2007 futures settled at 4,301.05, a steep discount of 44.80 points as compared to spot closing.
The Sensex’s biggest single day fall of 826 points had occurred on 18 May 2006. Fears that a possible change in taxation laws on sale of shares would raise tax-liability for FIIs had triggered sharp fall on that day when margin calls had accentuated the decline.
The second biggest fall of 617 points took place on 2 April 2007 following the Reserve Bank of India (RBI)’s surprise hike in interest rates announced after trading hours on 30 March 2007.
Turnover surged in the last hour of trade on BSE today. The total turnover on BSE crossed Rs 6,000 crore and was at Rs 6267 crore as against Rs 5,298 crore on Tuesday, 31 July 2007
The turnover in NSE’s F&O segment amounted to Rs 55,904.92 crore as against Rs 49,276.21 crore on Tuesday, 31 July 2007
The market breadth was weak on BSE with 2,147 shares declining as compared to 533 shares that advanced, while 41 remained unchanged. BSE Small-Cap index lost 294.73 points or 3.6% at 7,775.90. BSE Mid Cap index lost 256.62 points or 3.8% at 6,461.46. This means large caps took a much more severe beating compared with mid-caps and small caps.
The market saw heightened activity in the past few days. Firm global markets had led the Sensex to surge 290 points on Tuesday, 31 July 2007, as the market shrugged off a 50 basis-point hike in CRR by RBI announced on that day. The market also took solace in that RBI had kept interest rates steady. On Monday, 30 July 2007 Sensex rose 26.34 points after seeing high volatility
All this came after the black Friday’s, 27 July 2007 sharp 542-point plunge caused by setback in global equities. Stocks tumbled in Asia and the US on that day as an avalanche of concerns over the US credit and housing markets spilled into other areas of the financial sphere and prompted investors to reduce risk.
All the 30-members of the Sensex pack ended in the red today.
India’s second largest cement producer ACC plunged 9.62% to Rs 958 on 3.44 lakh shares. It was the top loser from the Sensex pack.
Reliance Energy (down 7.11% to Rs 737), Ranbaxy Laboratories (down 5.33% to Rs 369.10) and Mahindra & Mahindra (down 4.83% to Rs 693.90) were the other major losers from the Sensex pack.
India’s largest truck maker Tata Morors slipped 4.65% to Rs 666.80 after it reported a 22.2% rise in net profit to Rs 466.76 crore in Q1 June 2007 over Q1 June 2006. Sales moved up 4.7% to Rs 6056.82 crore in Q1 June 2007 over Q1 June 2006.
Bajaj Auto, the country’s second biggest two-wheeler manufacturer, shed 2.76% to Rs 2295 after its vehicle sales fell 7% to 1,85,890 units in July 2007 over July 2006.
Reliance Industries, the country’s largest private sector enterprise, lost 5.25% to Rs 1793 on 15.84 lakh shares. As per reports, RIL is among the 11 winners for oil and gas exploration blocks announced by the Australian government. RIL won the bid for an exploration licence in part of the Bonaparte Basin, off northern Australia. It proposes to spend A$29.8 million over the next six years. This includes the cost of drilling one well. Australia awards oil and gas exploration permits depending on the amount of work bidders pledge to carry out.
India's largest aluminium maker Hindalco Industries tumbled 6.41% to Rs 159.20 after said its net profit in the first quarter remained flat at Rs 602.9 crore due to a sharp fall in alumina prices and a customs duty cut that made imported products cheaper. Hindalco’s revenue rose 9% to Rs 4,677.9 crore in Q1 June 2007 over Q1 June 2006. Hindalco is expected to invest Rs 30000 crore over the next five years in various greenfield and brownfield expansion projects, including the Utkal Alumina project in Orissa.
India’s top small-car maker Maruti Udyog lost 2.13% to Rs 825. The company today, 1 August 2007, reported an 18% rise in sales in domestic market to 52,839 units in July 2007 over July 2006. It exported 5,070 units, up from 1,755 units in July 2006.
FMCG and pharma shares, considered as defensive sectors in times of steep market correction, though they declined, the fall in their prices was relatively low. Dr Reddy’s (down 1.85% to Rs 621.80), ITC (down 2.17% to Rs 167), Hindustan Unilever (down 2.47% to Rs 201), and Cipla (down 3% to Rs 184) edged lower.
Even as the market corrected sharply, Everonn Systems India settled at Rs 478.45 on BSE, a 241.75% premium over the offer price of Rs 140. The huge premium on listing was due to 131.47 times subscription of the IPO. The issue received total bids for 52.58 crore shares compared to total issue of 40 lakh shares.
The Everonn Systems India scrip debuted at Rs 245 on BSE and touched a high of Rs 560 and a low of Rs 245 during the day. About 71.77 lakh shares were traded on the counter on BSE. Everonn Systems India is a fully integrated knowledge management, education and training company.
Real-estate stocks were the worst hit in today’s fall. The BSE Realty index declined 521.54 points or 6.6% to 7,332.51. Unitech (down 7.36% to Rs 517.70), DLF (down 4.42% to Rs 584.65), Orbit Corporation (down 9.12% to Rs 317.30), Indiabulls Real Estate (down 9.22% to Rs 501.25), Parsvnath Developers (down 9.13% to Rs 325), Mahindra Gesco Developers (down 4.77% to Rs 551.50) and Ansal Infrastructures (down 4.98% to Rs 256.90) edged lower.
Among other sectoral indices, the BSE Metal index tumbled 559.64 points or 4.8% at 11,071.28. BSE Capital Goods index lost 624.37 points or 4.69% at 12,697.41. BSE Oil & Gas index tanked 357.85 points or 4.4% at 7,772.65.
PSU banks lost ground. The top losers among PSU banks were Bank of India (down 8.33% to Rs 237), Union Bank of India (down 9.03% to Rs 141.60), Indian Overseas Bank (down 3.5% to Rs 123), and Allahabad Bank (down 6.54% to Rs 89.30).
The hike in CRR of 50 basis points means effective increase in cost of deposits for banks. The deceleration in credit offtake implies that banks have to rollback high deposit rates being offered on tenures of one year and above. Banks now have to maintain 7% of their deposits with the RBI. On these CRR deposits, banks will receive interest only on 3% of the deposits at `bank rate’, which is 6%. No interest is paid on the balance 4%. As RBI does not pay any interest on the 4% deposits, banks’ margin is impacted to that extent.
The major losers among small-cap and mid-cap shares were Shah Alloys (down 18% to Rs 62.45), Sanghi Industries (down 13% to Rs 69.95), Sical Logistics (down 12% to Rs 245), RK Forgings (down 11% to Rs 182.20), Indus Fila 9.98% to Rs 195.25, Time Technoplast (down 15% to Rs 513.50), India Infoline (down 11.9% to Rs 662), Entertainment Network India (down 11% to Rs 462), Teledata Informatics (down 10% to Rs 64.65), and NIIT (down 9% to Rs 980.35).
Select stocks survived the fall. United Phosphorus (up 4% to Rs 319.50), Ingersoll Rand (up 2.2% to Rs 345), Kansai Nerolac Paints (up 2.8% to Rs 719.95), 3M India (up 2.6% to Rs 1858), and IPCA Lab (up 1.7% to Rs 715) edged higher.
Nestle India rose 0.61% to Rs 1196.55 after posting an 18.09% rise in net profit in Q2 June 2007 to Rs 95.69 crore over Q2 June 2006. Sales were up 23.15% to Rs 838.88 crore Q2 June 2007 over Q2 June 2006.
India's third-biggest motorbike maker TVS Motor Company dropped 0.86% to Rs 57.75 after the company said its sales declined 13% to 1.05 lakh units in July 2007 over July 2006.
Jammu & Kashmir Bank lost 6.10% to Rs 651 after it received the Reserve Bank of India's nod for setting up a stockbroking subsidiary.
Jai Corp surged 5% to Rs 3966.05 after its board of directors approved the sub-division of the equity shares from existing face value Rs 10 per share to a face value of Re 1 per share. They also approved increasing the limit for investment by foreign institutional investor (FIIs) to 49% of the paid-up equity capital
Glenmark Pharmaceuticals dropped 2.50% to Rs 670 on reports that it was being sued over patent infringement of anti-allergic drug Clarinex in the US. The Indian drug maker had submitted an abbreviated new drug application (ANDA) to the US Food and Drug Administration (FDA) seeking marketing approval for Clarinex, used for treating seasonal allergic rhinitis (SAR).
VSNL slipped 1.02% to Rs 450.10. Its net profit rose 18.22% to Rs 104.16 crore in Q1 June 2007 over Q1 June 2006. Total income soared 88.49% to Rs 1035.45 crore in Q1 June 2007 over Q1 June 2006.
Escorts lost 7.77% to Rs 96.10 after the tractor and construction equipment maker reported a net loss of Rs 6.24 crore in Q3 June 2007 compared to a net profit of Rs 1.57 crore in Q3 June 2006.
Essar Steel rose 1.20% to Rs 37.90 after the steel maker posted 461.8% surge in net profit to Rs 231.06 crore in Q1 June 2007 over Q1 June 2006
Panasonic AVC Networks India was locked at the 5% upper limit of Rs 16.05 after its Japanese parent Matsushita Electric Industrial Company fixed the de-listing price at Rs 18 per share.
Asian markets were a complete sea of red today, 1 August 2007, on Wall Street's decline. Nikkei tumbled 2.19% at 16,870.88. American Home Mortgage Investment Corp., a large US mortgage provider, said on Tuesday, 31 July 2007, it may have to liquidate assets, fuelling fears that the US housing slump was broadening and sending stocks reeling around the world. Bear Stearns Cos. Inc said on Tuesday, 31 July 2007, it had halted redemptions in a third hedge fund after investors wanted to pull out their money.
Singapore's Straits Times (down 3.27% at 3,431.71), Taiwan's Taiwan Weighted (down 4.26% at 8,891.88), Hang Seng (down 3.15% to 22,455.36) and South Korea's Seoul Composite (down 3.97% at 1,856.46) all slipped lower.
China's Shanghai Composite was down 3.81% to 4,300.63
Most of the key European indices were trading with losses today, 1 August 2007.
US tocks fell sharply on Tuesday (31 July 2007) as worries about the deteriorating US credit market flared up. The Dow slipped 146.32 points, or 1.10%, to 13,211.99 after being up as much as 140 points during the session. Broader stock indicators fell. The Standard & Poor's 500 index declined 18.64 points, or 1.26%, to 1,455.27, and the Nasdaq Composite index fell 37.01 points, or 1.43%, to 2,546.27.
US oil surged more than $1 to a record settle above $78 a barrel on Tuesday, 31 July 2007, on expectation that rising refinery demand will further drain inventories in the United States.
Finance minister P Chidambaram on Tuesday, 31 July 2007, reiterated his intent to trim tax rates, thanks to better compliance by taxpayers and the broadening tax base. He also held out a special dispensation for promising sectors like food processing, electronic hardware, hotels and tourism and leather goods.
All the sectoral indices on BSE tumbled with shares from the real-estate pack suffering the most. Everonn Systems India posted strong show on day 1, settling at 242% premium over issue price. Turnover on BSE surged in today's market fall.
The 30-shares BSE Sensex plunged 615.22 points or 3.96% to settle at 14,935.77. This was the third biggest single day point fall in Sensex ever. It opened with a downward gap of 207 points at 15,344.02 and kept on falling to touch a low of 14,910.52 at 15:12 IST on intense selling pressure. As per market talks, a lot of margin calls may have accentuated fall. Margin selling emerges when there are leveraged positions.
The S&P CNX Nifty slumped 183 points, or 4.04%, to 4,345.85. The Nifty August 2007 futures settled at 4,301.05, a steep discount of 44.80 points as compared to spot closing.
The Sensex’s biggest single day fall of 826 points had occurred on 18 May 2006. Fears that a possible change in taxation laws on sale of shares would raise tax-liability for FIIs had triggered sharp fall on that day when margin calls had accentuated the decline.
The second biggest fall of 617 points took place on 2 April 2007 following the Reserve Bank of India (RBI)’s surprise hike in interest rates announced after trading hours on 30 March 2007.
Turnover surged in the last hour of trade on BSE today. The total turnover on BSE crossed Rs 6,000 crore and was at Rs 6267 crore as against Rs 5,298 crore on Tuesday, 31 July 2007
The turnover in NSE’s F&O segment amounted to Rs 55,904.92 crore as against Rs 49,276.21 crore on Tuesday, 31 July 2007
The market breadth was weak on BSE with 2,147 shares declining as compared to 533 shares that advanced, while 41 remained unchanged. BSE Small-Cap index lost 294.73 points or 3.6% at 7,775.90. BSE Mid Cap index lost 256.62 points or 3.8% at 6,461.46. This means large caps took a much more severe beating compared with mid-caps and small caps.
The market saw heightened activity in the past few days. Firm global markets had led the Sensex to surge 290 points on Tuesday, 31 July 2007, as the market shrugged off a 50 basis-point hike in CRR by RBI announced on that day. The market also took solace in that RBI had kept interest rates steady. On Monday, 30 July 2007 Sensex rose 26.34 points after seeing high volatility
All this came after the black Friday’s, 27 July 2007 sharp 542-point plunge caused by setback in global equities. Stocks tumbled in Asia and the US on that day as an avalanche of concerns over the US credit and housing markets spilled into other areas of the financial sphere and prompted investors to reduce risk.
All the 30-members of the Sensex pack ended in the red today.
India’s second largest cement producer ACC plunged 9.62% to Rs 958 on 3.44 lakh shares. It was the top loser from the Sensex pack.
Reliance Energy (down 7.11% to Rs 737), Ranbaxy Laboratories (down 5.33% to Rs 369.10) and Mahindra & Mahindra (down 4.83% to Rs 693.90) were the other major losers from the Sensex pack.
India’s largest truck maker Tata Morors slipped 4.65% to Rs 666.80 after it reported a 22.2% rise in net profit to Rs 466.76 crore in Q1 June 2007 over Q1 June 2006. Sales moved up 4.7% to Rs 6056.82 crore in Q1 June 2007 over Q1 June 2006.
Bajaj Auto, the country’s second biggest two-wheeler manufacturer, shed 2.76% to Rs 2295 after its vehicle sales fell 7% to 1,85,890 units in July 2007 over July 2006.
Reliance Industries, the country’s largest private sector enterprise, lost 5.25% to Rs 1793 on 15.84 lakh shares. As per reports, RIL is among the 11 winners for oil and gas exploration blocks announced by the Australian government. RIL won the bid for an exploration licence in part of the Bonaparte Basin, off northern Australia. It proposes to spend A$29.8 million over the next six years. This includes the cost of drilling one well. Australia awards oil and gas exploration permits depending on the amount of work bidders pledge to carry out.
India's largest aluminium maker Hindalco Industries tumbled 6.41% to Rs 159.20 after said its net profit in the first quarter remained flat at Rs 602.9 crore due to a sharp fall in alumina prices and a customs duty cut that made imported products cheaper. Hindalco’s revenue rose 9% to Rs 4,677.9 crore in Q1 June 2007 over Q1 June 2006. Hindalco is expected to invest Rs 30000 crore over the next five years in various greenfield and brownfield expansion projects, including the Utkal Alumina project in Orissa.
India’s top small-car maker Maruti Udyog lost 2.13% to Rs 825. The company today, 1 August 2007, reported an 18% rise in sales in domestic market to 52,839 units in July 2007 over July 2006. It exported 5,070 units, up from 1,755 units in July 2006.
FMCG and pharma shares, considered as defensive sectors in times of steep market correction, though they declined, the fall in their prices was relatively low. Dr Reddy’s (down 1.85% to Rs 621.80), ITC (down 2.17% to Rs 167), Hindustan Unilever (down 2.47% to Rs 201), and Cipla (down 3% to Rs 184) edged lower.
Even as the market corrected sharply, Everonn Systems India settled at Rs 478.45 on BSE, a 241.75% premium over the offer price of Rs 140. The huge premium on listing was due to 131.47 times subscription of the IPO. The issue received total bids for 52.58 crore shares compared to total issue of 40 lakh shares.
The Everonn Systems India scrip debuted at Rs 245 on BSE and touched a high of Rs 560 and a low of Rs 245 during the day. About 71.77 lakh shares were traded on the counter on BSE. Everonn Systems India is a fully integrated knowledge management, education and training company.
Real-estate stocks were the worst hit in today’s fall. The BSE Realty index declined 521.54 points or 6.6% to 7,332.51. Unitech (down 7.36% to Rs 517.70), DLF (down 4.42% to Rs 584.65), Orbit Corporation (down 9.12% to Rs 317.30), Indiabulls Real Estate (down 9.22% to Rs 501.25), Parsvnath Developers (down 9.13% to Rs 325), Mahindra Gesco Developers (down 4.77% to Rs 551.50) and Ansal Infrastructures (down 4.98% to Rs 256.90) edged lower.
Among other sectoral indices, the BSE Metal index tumbled 559.64 points or 4.8% at 11,071.28. BSE Capital Goods index lost 624.37 points or 4.69% at 12,697.41. BSE Oil & Gas index tanked 357.85 points or 4.4% at 7,772.65.
PSU banks lost ground. The top losers among PSU banks were Bank of India (down 8.33% to Rs 237), Union Bank of India (down 9.03% to Rs 141.60), Indian Overseas Bank (down 3.5% to Rs 123), and Allahabad Bank (down 6.54% to Rs 89.30).
The hike in CRR of 50 basis points means effective increase in cost of deposits for banks. The deceleration in credit offtake implies that banks have to rollback high deposit rates being offered on tenures of one year and above. Banks now have to maintain 7% of their deposits with the RBI. On these CRR deposits, banks will receive interest only on 3% of the deposits at `bank rate’, which is 6%. No interest is paid on the balance 4%. As RBI does not pay any interest on the 4% deposits, banks’ margin is impacted to that extent.
The major losers among small-cap and mid-cap shares were Shah Alloys (down 18% to Rs 62.45), Sanghi Industries (down 13% to Rs 69.95), Sical Logistics (down 12% to Rs 245), RK Forgings (down 11% to Rs 182.20), Indus Fila 9.98% to Rs 195.25, Time Technoplast (down 15% to Rs 513.50), India Infoline (down 11.9% to Rs 662), Entertainment Network India (down 11% to Rs 462), Teledata Informatics (down 10% to Rs 64.65), and NIIT (down 9% to Rs 980.35).
Select stocks survived the fall. United Phosphorus (up 4% to Rs 319.50), Ingersoll Rand (up 2.2% to Rs 345), Kansai Nerolac Paints (up 2.8% to Rs 719.95), 3M India (up 2.6% to Rs 1858), and IPCA Lab (up 1.7% to Rs 715) edged higher.
Nestle India rose 0.61% to Rs 1196.55 after posting an 18.09% rise in net profit in Q2 June 2007 to Rs 95.69 crore over Q2 June 2006. Sales were up 23.15% to Rs 838.88 crore Q2 June 2007 over Q2 June 2006.
India's third-biggest motorbike maker TVS Motor Company dropped 0.86% to Rs 57.75 after the company said its sales declined 13% to 1.05 lakh units in July 2007 over July 2006.
Jammu & Kashmir Bank lost 6.10% to Rs 651 after it received the Reserve Bank of India's nod for setting up a stockbroking subsidiary.
Jai Corp surged 5% to Rs 3966.05 after its board of directors approved the sub-division of the equity shares from existing face value Rs 10 per share to a face value of Re 1 per share. They also approved increasing the limit for investment by foreign institutional investor (FIIs) to 49% of the paid-up equity capital
Glenmark Pharmaceuticals dropped 2.50% to Rs 670 on reports that it was being sued over patent infringement of anti-allergic drug Clarinex in the US. The Indian drug maker had submitted an abbreviated new drug application (ANDA) to the US Food and Drug Administration (FDA) seeking marketing approval for Clarinex, used for treating seasonal allergic rhinitis (SAR).
VSNL slipped 1.02% to Rs 450.10. Its net profit rose 18.22% to Rs 104.16 crore in Q1 June 2007 over Q1 June 2006. Total income soared 88.49% to Rs 1035.45 crore in Q1 June 2007 over Q1 June 2006.
Escorts lost 7.77% to Rs 96.10 after the tractor and construction equipment maker reported a net loss of Rs 6.24 crore in Q3 June 2007 compared to a net profit of Rs 1.57 crore in Q3 June 2006.
Essar Steel rose 1.20% to Rs 37.90 after the steel maker posted 461.8% surge in net profit to Rs 231.06 crore in Q1 June 2007 over Q1 June 2006
Panasonic AVC Networks India was locked at the 5% upper limit of Rs 16.05 after its Japanese parent Matsushita Electric Industrial Company fixed the de-listing price at Rs 18 per share.
Asian markets were a complete sea of red today, 1 August 2007, on Wall Street's decline. Nikkei tumbled 2.19% at 16,870.88. American Home Mortgage Investment Corp., a large US mortgage provider, said on Tuesday, 31 July 2007, it may have to liquidate assets, fuelling fears that the US housing slump was broadening and sending stocks reeling around the world. Bear Stearns Cos. Inc said on Tuesday, 31 July 2007, it had halted redemptions in a third hedge fund after investors wanted to pull out their money.
Singapore's Straits Times (down 3.27% at 3,431.71), Taiwan's Taiwan Weighted (down 4.26% at 8,891.88), Hang Seng (down 3.15% to 22,455.36) and South Korea's Seoul Composite (down 3.97% at 1,856.46) all slipped lower.
China's Shanghai Composite was down 3.81% to 4,300.63
Most of the key European indices were trading with losses today, 1 August 2007.
US tocks fell sharply on Tuesday (31 July 2007) as worries about the deteriorating US credit market flared up. The Dow slipped 146.32 points, or 1.10%, to 13,211.99 after being up as much as 140 points during the session. Broader stock indicators fell. The Standard & Poor's 500 index declined 18.64 points, or 1.26%, to 1,455.27, and the Nasdaq Composite index fell 37.01 points, or 1.43%, to 2,546.27.
US oil surged more than $1 to a record settle above $78 a barrel on Tuesday, 31 July 2007, on expectation that rising refinery demand will further drain inventories in the United States.
Finance minister P Chidambaram on Tuesday, 31 July 2007, reiterated his intent to trim tax rates, thanks to better compliance by taxpayers and the broadening tax base. He also held out a special dispensation for promising sectors like food processing, electronic hardware, hotels and tourism and leather goods.
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