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Friday, Oct 25, 2002

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Heavy trading in Morepen Labs

Deeptha Rajkumar

KOCHI, Oct. 24.

MOREPEN Laboratories has been witnessing a lot of interest in the recent past on the major bourses. While there has been no sustained uptrend in price, the stock has attracted large volumes. Yet market watchers are taking a sceptical view of the unprecedented activity in the stock.

"The company has been in the news for some time now on account of its acquisitions, talk of a new strategy etc. Additionally, it has also announced good results. But they are poised at a critical level. At this juncture, one could see a downside. It is a wait-n-watch story," a leading broker said.

The stock which was quoting at Rs 31 as on October 1, surged to Rs 40.80 on October 16, but has since then displayed an erratic movement, making it difficult for the market to take a call on the company. The stock closed at Rs 30.10 on the BSE today with volumes of 8.89 lakh shares. On the NSE, Morepen closed at similar levels with higher volumes of 17.52 lakh shares. While about 25 per cent of traded shares were up for delivery on the BSE today, 35 per cent of traded shares were presented for delivery on the NSE.

"The stock has a volatile history. And the price movement suggests that they have not built up on their strength. If there had been a convincing story on the cards, it should not have come back to these levels," a technical analyst said.

The company has been in the news since it acquired three international patents, the latest, being the second largest molecule ever. It has also acquired Burnol from SmithklineBeecham.

Of late, the company has been attempting to strengthen its position in the OTC segment and aggressively marketing its products via the electronic medium.

"Their strategy per se is OK. However, one will have to give them 3/4 quarters to see whether they can perform or not," an analyst said.

Industry sources said that the company was banking heavily on its proposal to export an anti-allergy drug — Loratidine — to the US, which is pending approval.

The apparent build-up at this counter could also be on based on this.

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