Financial Daily from THE HINDU group of publications
Tuesday, Jan 18, 2005
Financial Daily from THE HINDU group of publications Tuesday, Jan 18, 2005 |
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Markets
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Stock Markets Sesa Goa flares up on iron ore price renegotiations Virendra Verma
Mumbai , Jan. 17 SHARES of Sesa Goa, a leading iron ore exporter, jumped by over 8 per cent on Monday following the renegotiation of iron ore export price for 2005, brokers said. According to them, the renegotiation price of iron ore has increased from less than $20 per tonne to $27, a jump of 35 per cent. Every year, iron ore companies fix the price with its customers. The price fixed by Sesa Goa is for the export market only. Due to this development, the stock price of the company gained 8.8 per cent at Rs 1,024.55 on the BSE with volumes of 1.95 lakh shares; on the NSE, it closed at Rs 1,023.20, up 9.01 per cent, with volumes of 5.46 lakh shares. However, company officials were not available to confirm the iron ore export price at which it has fixed for 2005. According to analysts, the rise of almost 35 per cent in iron ore price is very positive for the company. They said with the hike in price, the company is likely to report growth in the topline and bottomline by the same rate in next fiscal. However, some analysts believe that the growth would be much higher as the company is also in coking coal business and its prices have increased much faster than iron ore. In October 2004, the company merged Sesa Kembla Coke Company with it. This company is mainly into cocking coal business. Brokers said the rise in the stock price is also due to the company recently announcing bonus shares in the ratio of one share for every one share held. Extra-ordinary meeting of the shareholders for it is scheduled on January 25. "Several players buy shares of a company just ahead of the allotment of bonus shares. In Sesa Goa case also, there is buying due to it," said a dealer with a domestic broking firm.
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