BSE commences mobile-based trading

The Bombay Stock Exchange Ltd (BSE), India's oldest stock exchange launched mobile-based trading Tuesday through its 33 leading brokers, a senior Exchange official said.

"We have started providing user-friendly mobile-based trading from today. The top 33 brokers of BSE commenced mobile trading for their clients," BSE's Managing Director & CEO, Madhu Kannan told reporters here.

Leading BSE stock brokers namely, Angel Broking, Motilal Oswal Securities, Marwadi Shares & Finance, BCB Brokerage, Asika Stock Broking, Geojit BNP Paribas Financial Services, SMC Global Securities, ICICI Securities, India Infoline, Kotak Securities, Standard Chartered STCI Capital Markets are among those who started providing mobile based trading facility to its clients.

The mobile trading service will be extended to all the investors through its 900 active brokers soon. Mobile trading is essentially an extension of internet based trading.

Kannan said the security on mobile trading will be same as on internet trading. Brokers will have full control of the risk parameters since orders submitted by client on his mobile will be sent via the broker's servers to the exchange.

Gujarat Gas: Stock that surged 10% in a strong mkt

Ahmedabad based leading private gas distributor, Gujarat Gas Company Limited's stock rose over 10% on the back of an increase in compressed natural gas (CNG) prices by the company to Rs 32.45 per kg. The stock surged 10.21%, or Rs 36.05 to end at Rs 389. It touched a 52-week high and an intraday high of Rs 403.40 and an intraday low of Rs 352.95. There were pending sell orders of 26 shares, with no buyers available.

Why the run-up?

Following a supply crunch from its conventional sources, and an increase in input costs, the company hiked the price of CNG effective September 5, 2010 to Rs 32.45 per kg, an 8% increase over the existing price of Rs 29.96 per kg in Bharuch, Ankleshwar and Surat in Gujarat.

In 2009, the company had raised CNG prices following a weak rupee and revised electricity tariffs in the state. Over 100,000 vehicles in these towns run on CNG.

The company has been a part of the British Gas Group, a global leader in natural gas, since 1997. BG Group has a 65.12% controlling stake in GGCL. FIs, FIIs and public hold the remaining 34.88% of shares.

Since January of this year, gas prices for industrial units have gone up almost 10%. A growing demand for natural gas has put the company in a sweet spot.

It has a strong presence in Gujarat, which offers good potential for natural gas across industries. As gas supply in India increases, natural gas could become a cheaper and a superior alternative to industrial fuels like naphtha, used in power, steel and fertiliser industries.

Also, the number of vehicles using CNG is expected to rise significantly over the next five years, according to estimates of the Petroleum and Natural Gas Regulatory Board. Gujarat Gas is strategically well placed to take advantage of this growing demand, combined with its focus on the industrial market on the retail side. The company also has long-term contracts with domestic suppliers which provides it good revenue visibility.

Bull of the week: Stock that rallied 62% in 5 days

EIH Associated Hotels gained 9.98% or Rs 20.95 to close at Rs 230.85. It touched a 52-week high of Rs 230.85. There were pending buy orders of 43,187 shares, with no sellers available.

Why the run up?

On August 30, 2010, Energy major Reliance Industries controlled by billionaire Mukesh Ambani, announced its foray into the hospitality sector by acquiring a 14.12% in EIH for a total cost of Rs 1021 crore. The stake buy worked out to Rs 184 per share. The acquisition at Rs 184 per share represented almost a 20% premium to its price of Rs 151 on the day. EIH holds 75% controlling stake in EIH Associated Hotels.

On September 01, 2010 , Reliance, bought an additional 0.68% in EIH Ltd, raising its holding to 14.8% in the hotel chain.

Reliance's 14.8% stake in EIH, just shy of the 15% level that triggers a mandatory open offer to buy an additional 20%, could mean the company is not keen to take management control of the hotel chain.

ITC, which holds 14.98% stake in EIH, reiterated that it would not make a hostile bid for EIH.

Analajit Singh, Chairman of Max India, who also holds under 5% stake in EIH, was also interested in hiking his stake in the company. However, talks failed over differences in valuations.

FDI dips 18% during Jan-June 2010

New Delhi: Foreign direct investment in India declined by 18.3 percent to USD 10.77 billion during the first half of 2010.

During January-June 2009, the country received USD 13.19 billion foreign direct investment (FDI), according to the data of the Industry Ministry.

"The main reason for the decline in FDI is slump in the major western economies like the US and Europe..., international trade expert with India's prestigious Indian Institute of Foreign Trade (IIFT) Rakesh Mohan Joshi said.

Joshi said that the flow of foreign investments depends particularly on the on the revival of the western countries.

The sectors which attracted maximum overseas investments include services, telecommunication, construction activities, housing and real estate, power and automobile.

The country received maximum investments from countries like Mauritius, the US, UK, Singapore, the Netherlands and Japan.

The government is making sustained efforts to make the FDI policy regime more attractive and investor friendly, with a view to attract investments from all major investing countries.

The government had floated discussion papers for public comments to liberalise FDI in multi-brand retail and defence sector.

FDI for 2009-10 at USD 25.88 billion was lower by five percent from USD 27.33 billion in the previous fiscal.

See Sensex at 22000 by year end: Deutsche Bank

Today, the Sensex closed at 18038.25 up 39.84 points or 0.22% and the Nifty ended up 6.75 points or 0.12% at 5415.45.

Ashwani Gujral, Technical Analyst says, 5,470 was a key level while the markets were coming down. “Today, we have kind of tested that level again and confirmed that this market now has downside momentum. So, in case 5,400 gets taken out, which is about the 50-day moving average, then the next level here should be 5,250 to 5,270. Clearly, we are in a correction and it’s likely that we underperform global markets in this period.”

However, Ajay Bagga, Head of Private Wealth Management (PWM) India, Deutsche Bank doesn’t expect a major correction. He sees Sensex at 22,000 by the end of the year. “We remain bullish on the Indian markets.”