Young Investor

Markets in a Minute

K. VENKATASUBRAMANIAN | Updated on November 19, 2011

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As the results season draws to a close, and news flow from companies reduces to a trickle, the sound bytes in the studio were somewhat subdued. There were however several non-corporate happenings that still created some buzz. A slice of the conversation.

Manish: The turbulence in the air refuses to abate with Kingfisher Airlines' woes not coming to an end or even a logical conclusion. Their lenders have cleared stated that conversion of debt to equity now is not possible. The airline says it hasn't sought a bailout and wants permission for directly importing fuel.

Natasha: Yeah true. And there are vague statements made. Kingfisher says it wants to focus only on ‘high-end' business. There was also speculation that Reliance Industries may look to buy a stake through a preferential offer in the company, which has been denied by the former. The clear lesson is there is no substitute to running an operationally cost-tight company if you are in the airlines business. Non-adherence to this tenet and excesses can be devastating.

Manish: Anyway, on the corporate front Tata Motors did not have a good September quarter. Net profits slipped 16 per cent over the same period last year.

Natasha: Yeah, forex losses and cost pressures ate into profits. But the company continues to see robust traction in the commercial vehicles segment.

Manish: There is something to cheer though, as oil marketing companies have lowered the price of petrol by a couple of rupees a litre.

Natasha: Don't be so sure. There are some reports that say that fuel prices are likely to go up again in a couple of weeks' time.

Manish: Hey, did you notice that the government has raised the limit for FII investments in government securities and corporate bonds? They can invest $5 billion more, which takes the limit to $15 billion.

Natasha: Yeah I did. With yields being quite high in India, FIIs are expected to step up investments. Analysts say it will also have a positive effect on the rupee and that it would appreciate.

Manish: The capital markets regulator SEBI has decided to impose circuit filters on stocks on the day of listing itself. Given that some of the stocks have swung quite wildly on listing day recently, the move is welcomed by some.

Natasha: Yeah true. But there are others who say that an investor who comes for listing gains alone would be denied the opportunity to exit or enter a stock if circuit filters are imposed.

Manish: Hmm…We will have to look at international cues in the days to come, especially from Europe to see how Greece and Italy manage fiscal austerity measures.

Natasha: Domestically too, with the Parliament session due to start from next week, there are several economic bills waiting to be passed. We will have to wait and see if it indeed happens .

Published on November 19, 2011

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