Our indices have traded in small compressed range, after opening in negative territory, taking global cues on thursday, and closed negative at the end of the session. Both the indices have closed below January monthly closings due to bear pressure, However, Nifty has held 5110 on closing basis, which is a crucial level to be watched during this week, where lots of information and events are scheduled which will bring in huge volatility on indices, due to F&O expiry, Railway Budget, Economic Survey and finally the Union Budget on 29.02.2008. Inflation has shown raise which is a cause of concern for regulators world over.However, US markets after opening negatively and trading in negative territory for most part of the session of trading, recovered and closed with good gains, due to last hour rally on expectation of rate cut and also that the bond insurers are likely to have a bail out.
Reliance Power management announced hefty bonus of 3:5 shares for all public share holders, excluding the promotores(ADAG group), diluting their stake in the company, increasing the public holding to 15%, for improving liquidity too, brings the cost of issue price to 269 fo retail investors is a positive measure which will enthuse investors today at the opening of the markets. March Nifty futures are trading at hefty discount of 50 points indicate shorts rollover and bear grip on the market and Singapore Nifty futrues trading at 70 point premium to friday closing and positive opening of asian markets indicate positive opening for our markets and short covering coupled with follow up buying if emerges, we might get huge rally upto budget.
Strategy for March: Buy 5100 Call and Put and leave it till expiry of the series for capturing the wild gyrations expected post budget presentation on 29.02.2008.
2 comments:
Hello,
Apart from increasing liquidity for Reliance Power. These bonus shares are not going to mean much in terms of profitability.
If the ex-bonus price is Rs 300, then too, one would make a paltry return of 12% on the investment. This is after a wait of more than 2months.
I think it is best to get out of this stock. Ofcourse my view is biased, because I was playing it purely from a listing gains perspective and am out at my breakeven level. :)
Vinay
Original allottees of Relian Power and people who have averaged their cost after its listing; can safely exit the stock at current levels and book profit, as the ex-bonus price will be around 270 to 300 (Max) and also due to the fact that returns from the company in the form of dividends etc., can be expected from 2011 only.
vrkrao
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