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Tuesday, Jul 16, 2002

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Block deals lift EIH

Jayanta Mallick

KOLKATA, July 15

The EIH Ltd stock closed higher by about 3.7 per cent today at Rs 244 on the major bourses. However, the combined volumes in the counter on the Bombay Stock Exchange and the National Stock Exchange were not more than 19,000 shares.

The stock has been seeing upward price movement since it touched its last bottom at around Rs 195 on February 11 this year. It peaked to Rs 219 on the NSE, but the traded quantity remained below 5,000 shares. The only exception was witnessed on May 30, when its traded volumes on the NSE stood at 1.23 lakh shares and the closing price was Rs 210.85.

However, volumes on May 30 were backed by two block deals of around 50,000 shares each and one of around 20,000 shares on the NSE. On July 12, the counter on the NSE had attracted a single block deal of around 43,000 shares at a price of Rs 250. The total day's volume of scrip on NSE was around 49,000 shares.

"The block buys are definitely influencing the price of the stock as also the sentiment in the recent months. Otherwise, neither fundamentally nor technically the counter has not thrown up any surprises since January," an institutional broker observed.

It may be pointed out that at the previous price peak of Rs 251 achieved on November 29, the stock recorded volumes of 2.71 lakh shares on the NSE.

Mr S.S. Mukherji, Managing Director of EIH, told Business Line here that the company was not worried about any creeping acquisition move as the promoters' holding of around 45 per cent largely rendered it immune to any attempts at a hostile takeover.

The company board is expected to meet on July 29 to take on record the Q1 result of 2002-03. The MD indicated that the first-quarter result might show a drop compared to the corresponding quarter of last financial year. The negative travel advisories from the Governments of the US, UK, Japan and the European countries had led to a drop in the number of foreign visitors to the Oberoi hotel chain in India.

"Even our 11 hotels abroad are facing a decline in occupancy rates after September 11, 2001. This is a global phenomenon. Border tensions with Pakistan have further accentuated the slowdown," Mr Mukherji observed.

A section of the stock market players, however, felt that travel advisories may soon be revised by the US and European nations.

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