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Saturday, February 09, 2008

Market may remain volatile; RPower listing eyed


The market is expected to see volatile swings as has been the trend in the recent past. Of late markets across the globe were inflicted by high volatility due to fears of a recession in United States, the world's biggest economy.

The key event watch out for is the debut of Reliance Power (RPower) on Monday, 11 February 2008. Reliance Power had, last month, completed India's largest initial public offer (IPO) of over Rs 11000 crore.

The issue was heavily subscribed. The Anil Dhirubhai Ambani Group firm Reliance Power got an aggregate commitment of over Rs 7.50 lakh crore, as against the issue size of Rs 11,560 crore. It had offered shares at Rs 450 per share, valuing the firm at $30 billion.

The Reliance Power shares quoted a premium of as high as Rs 500 per share in the grey market when the issue was open for subscription due to buoyant equity market. However, as per latest reports, it is now attracting premium of Rs 100- 200 per share as equity markets across the globe have declined in volatile trade.

Forthcoming events including Railway Budget and Union Budget for 2008-09, to be presented at the fag end of February 2008, may dictate the trend on the bourses in the near term.

Third quarter December 2007 results season has come to end. Most of the results were in line with market expectations. A total of 3321 companies reported 26.80% rise in net profit on 19.20% rise in net sales for Q3 December 2007 over Q3 December 2006. The net profit was boosted by 72.5% jump in other income

The market suffered losses for the fourth straight week in the week ended Friday, 8 February 2008 as selling pressure continued for index pivotals. The BSE 30-shares Sensex lost 777.69 points or 4.26% to 17,464.89 in the week ended Friday, 8 February 2008. The S&P CNX Nifty lost 196.90 points or 3.70% to 5,120.35, in the week.

However, small-cap and mid-cap indices outperformed the Sensex. The BSE Mid-Cap index declined 128.27 points or 1.65% to 7,633.27, in the week ended Friday, 8 February 2008. The BSE Small-Cap index lost 151.97 points or 1.51% to 9,920.35, in the week.