Swing of things

The markets were volatile all last week and barring Thursday, the last trading day of the week which was flat, alternated with gain, loss and gain. The week ended on a positive note and now proceeds into the last week of 2015 and December futures expiry too.

Indian Prime Minister Narendra Modi (6L) and Afghan Chief Executive Abdullah Abdullah (8L) walk past a Russian-made attack helicopter at the Kabul International Airport. Post Afghanistan, it was a visit to Pak that took everybody by surprise. Pic/AFP

The Sensex ended with gains of 319.49 points or 1.25 per cent to close at 25,838.71 points while Nifty gained 99.10 points or 1.28 per cent to end at 7,861.05 points. Broader market gained similar with BSE100, BSE200 and BSE500 gaining 1.23 per cent, 1.21 per cent and 1.26 per cent, respectively.

BSEMIDCAP gained 0.91 per cent but BSESMALLCAP was up much more at 1.72 per cent. The action has clearly shifted to midcap and smallcap, where FIIs are not present and some of the domestic funds have invested.

The top sectoral gainers were BSEMETAL up 3.10 per cent, followed by BSEPOWER 2.73 per cent and BSEOIL&GAS, 2.57 per cent. On the losing side, there was just one with BSECONDUR, losing 1.01 per cent.

In individual stocks, the top gainer was Vedanta gaining a massive 8.95 per cent, followed by Hindalco 6.51 per cent and Bharti Airtel 6.03 per cent. Other gainers included Cairn India 5.81 per cent and GAIL 6.54 per cent.

On the losing side were Titan Industries down 2.88 per cent and Punjab National Bank 1.52 per cent. In other losers was Power Finance, down 3.94 per cent.

Santa effect
Indian rupee gained 19 paisa, or 0.29 per cent, to close at Rs 66.20 to the US dollar. Dow Jones gained 423.72 points or 2.47 per cent, to close at 17,552.17 points. Santa Claus rally seems to be there all over the world.

The winter session of Parliament ended on expected lines, with hardly any legislative business being concluded. A few bills were passed on the last day without any discussion and some more sent to a select committee for discussion and debate. How long this can continue is anybody's guess, It is time the opposition understood why they are in Parliament.

The week ahead, has December futures expiring on Thursday, December 31. The current value of Nifty at 7861.05 points, is lower than November expiry by 22.75 points, or, 0.29 per cent. The month, with four trading days has been Even Stevens with neither bull nor bear having an upper hand. It is anyone's game from here but with NAV (Net Asset Value) to be computed for December 31, the bulls could have an upper hand.

Listings line up
The delisting of Essar Oil was completed with price discovery of R 262.80, against a floor price offered by the management of about Rs 146. There may be a Christmas surprise to this price, if the deal price with Rosenoft is higher than the discovered price.

If one has tendered shares in the open offer, he would be entitled to such a higher price. In case one has not tendered, it makes sense to just hold on. The discovered price or the Rosenoft deal price, whichever is higher, would be payable to investors in the period of one year post delisting.

The primary market had all the action last week where two new listings stole the limelight. Alkem Laboratories, which through a secondary offering had sold shares in a price band of Rs 1020-1050, listed at a price of Rs 1380 and went on to gain further on Friday and closed the week at Rs 1521.75, a gain of Rs 471.85 or 44.93 per cent.

The other share to list Dr Lal Pathlabs went a step further and against an issue price of R 550, closed the week at R 893.65, a gain of Rs 343.65 or 62.48 per cent. This clearly makes Dr Lal's issue the best debut for the year 2015.

The other issue which closed for subscription during the week, was Narayana Hrudayalaya which was subscribed 8.70 times overall with QIB portion subscribed 24.43 times, HNI 3.62 and Retail 1.89 times. The response could be said to be muted considering the response to Dr Lal and Alkem Labs.

Looking ahead
Come January 1, all applications in primary issues including retail, will have to be by way of ASBA, where money is blocked in the account rather than paying for it. This will reduce the time to list from 12 days to six days.

Teething problems are expected and it would be interesting to see how issuers deal with the same. Volatility on lower volumes is expected in the coming days. All the action would be largely in the midcap and smallcap space, where one may expect huge volatility as well. Trade cautiously. Wishing all readers a Happy New Year 2016.

Arun Kejriwal is founder of the Mumbai-based advisory firm Kejriwal Research & Investment Services Pvt Ltd. Readers are invited to read more about these and other issues on his website https://ak57.in

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