The Hindu Business Line : BSES: Boosted by institutional support

EVEN after the announcement of preferential issue offer to the Reliance Group and major institutional shareholders, the stock of BSES gained sharply on Monday, when most of the index stocks fell. Dealers said it was a surprise to see such a sharp rise despite the equity dilution.

The market talk is that several players are very bullish on the counter mainly due to the reforms taking place in the power sector and Reliance group taking stake in the company at Rs 640, which is at its all-time high price. Dealers said several FIIs have shown interest in the counter as they feel the company has strong potential for growth. The market is looking at sharp growth in the power sector, especially in the distribution area.

There is also talk that the company might foray into the distribution of power in Gujarat by taking over the distribution network of the State electricity board or companies in the State. Even in Delhi, where it acquired the distribution network from Delhi Vidyut Board, there has been improvement.

On Monday, the stock closed at Rs 700.90, up 6.63 per cent on the BSE with volume of 5.58 lakh shares; and on the NSE it closed at Rs 699.35, up 6.75 per cent with volume of 14.40 lakh shares.

Unwinding in derivatives

IT was another day of heavy unwinding of positions, especially in the derivatives segment, that led to sharp fall in most of the index and other liquid stocks. Dealers said the selling is mainly from the traders who are unwinding their positions in the derivatives segment. The expiry of February contract is on Thursday.

If the market talk is to be believed, positions of around Rs 6,000 crore-Rs 6,500 crore in the derivatives segment has to be either squared-off or carried forward for next month. Dealers said until this happens prices are expected to remain depressed. On Monday, some traders shifted their positions to March and several players are expected to do so in the next couple of days.

Another factor for the fall in the stock market was selling from various players in order to subscribe to the shares in the primary market. Several FIIs are also understood to have been selling in the secondary market in order to subscribe to the IPOs of several oil and energy sector companies such as GAIL and ONGC.

Virendra Verma

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