Last week began on a weak note with the market losing on the first three days before recovering ground in the remaining days.
The Sensex lost 227.59 points to close at 29,421.40, while the Nifty lost 52.05 points and closed at 9,108 points. The broader markets too lost some ground.
There was plenty of news flow during the week. It began with Idea and Vodafone deciding to merge to form a significant company to take on the competition from Reliance Jio. Hindustan Zinc announced a special interim dividend of Rs 27.50 per share. This has made Hindustan Zinc the company to pay the highest dividend amount amongst all listed players.
Reliance Industries and its group companies have been fined a sum of Rs 447.27 crore in the long pending insider trading case of November 2007. Sebi has fined the company and its associates this amount along with interest to be paid at the rate of 12 per cent from November 29, 2007. The interest for nine-and-a-half years would be more than the amount of fine itself. What is interesting is the timing of the judgement, which has come within a month of the new Sebi chief taking over. It was widely believed that the outgoing chief was dragging his feet on this issue and was just not interested in seeing the order go through. Strange are the ways of the law of the land. As part of the order these entities have been debarred from equity derivatives for a period of one year.
There was plenty of action in the primary market. Shares of Avenue Supermart listed on the bourses to a rousing start. Shares, which were issued at Rs 299, closed at Rs 640.75, a gain of Rs 341.75. The gains registered are huge and have happened after a very long time. The share price closed at Rs 616 for the week, a gain of 106 per cent.
There were two IPOs during the week. The first was CL Educate. The issue managed to get subscribed. The issue was subscribed 1.90 times with the QIB portion subscribed 3.65 times, retail 1.63 times and HNI undersubscribed at 0.21 times.
The second issue was from Shankara Building Products, which was very well received. The issue was oversubscribed 41.88 times. The QIB portion was subscribed 51.62 times, HNI 90.68 times and retail 15.35 times. Some 10.7 lakh applications were received in all. This clearly explains that there is appetite for new paper where issues are aptly priced, leaving something on the table. Investors have become savvy and are learning much faster than book running lead managers and promoters.
The March series futures expire this Thursday, March 30. At current levels. the Nifty is higher by 168.50 points or 1.88 per cent. This gives a clear advantage to bulls. With the Nifty having made a life time high last week and the Sensex yet to do so, this week seems the right time for an attempt to be made. Bulls would press their advantage and make bears cover their shorts into expiry. It is also the time when the financial year ends, making money markets tight. Brace yourselves for higher volatility and new highs.
The last week of the financial year and expiry would add to volatility and the stage is iset for yet another attempt at new highs. Trade with caution.
(The author is founder, Kejriwal Research & Investment Services)
