Posts Tagged ‘Bombay Stock Exchange’

Sexy Coal India shares list with an opening gain of 32%

November 4, 2010


Bombay Stock Exchange

BSE: Image via Wikipedia


The Coal India IPO where the Government of India divested 10% of its shares in the worlds largest coal producer was massively oversubscribed. The share price was set at 245 Rs at the top of its offer range of 225 – 245 Rupees.

The shares were listed today and the price immediately zoomed to 324 Rs showing an opening gain of 32%.

The Economic Times reports:

The world’s largest coal producer today listed on the bourses with a handsome premium and zoomed over 32 per cent, over its IPO issue price of Rs 245 per share, to hit a high of Rs 324.75 in the first hour of trade on the Bombay Stock Exchange.

Partha S. Bhattacharyya, Chairman & MD, Coal India Limited says, “Many records have been broken and many peaks have been scaled. For the officials intensely involved in the process, the feeling largely resembles to that of a mother who has just given birth to a child. Indeed it is a moment of birth in the capital market that brings in huge responsibility on the management to rear the newborn baby into a strong and mature turnout by living upto the expectations of the investing community consistently.”

Prasad Baji, Senior VP, Edelweiss says, “Technically Coal India’s valuation is running not just as a coal company but since its model is different, it is selling in India where there is an assured offtake and its pricing will never see a price tag, therefore, it is not typically a commodity play as compared to other coal companies.

Investors included Janus Capital, Fidelity, Franklin Templeton and Capital International. Domestic investors included State Bank of India , ICICI Bank and Life Insurance Corp. Maximum subscription was in the high net worth category with subscription of around 25 times. Amit Aggrawal, a financial services executive who borrowed Rs 90 million to bid for Coal India shares, says that he would take some profits off the table at Rs 320 a share. “I may hold back some shares and sell them at a later stage,” says Mr Aggrawal.

Indian stock market and cricket performance

October 13, 2010


The Little Master: image


Today Indian won the 2nd cricket test against Australia in Bangalore by a handsome 7 wickets. Sachin Tendulkar scored a second innings fifty after his double- century in the first innings which was his 49th Test century.

The Bombay Stock Exchange (Sensex) surged 484 points to 20,688 today.

This was immediately taken as corroboration of the street wisdom that the two are closely tied. The Indian Express is euphoric. Sensex wins on day of India’s triumph.

A superb ending for the stock markets happened in tandem with Team India’s victory against Australia in Bangalore. Coincidence? The 484-point surge in BSE benchmark Sensex today coincided with the triumph of Indian cricket team against Australia –thus corroborating claims of a correlation between trends in stock markets and cricket field.

A recent paper by Monash University economists did find a link between Cricket performance and the BSE Sensex.

Mishra, Vinod & Smyth, Russell, 2010. “An examination of the impact of India’s performance in one-day cricket internationals on the Indian stock market,” Pacific-Basin Finance Journal, Elsevier, vol. 18(3), pages 319-334, June 2010.

This study examines the impact of the Indian cricket team’s performance in one day international cricket matches on returns on the Indian stock market. The main conclusion of the study is that there exists an asymmetric relationship between the performance of the Indian cricket team and stock returns on the Indian stock market. While a win by the Indian cricket team has no statistically significant upward impact on stock market returns, a loss generates a significant downward movement in the stock market. When Sachin Tendulker, India’s most popular cricketer, plays the size of the downward movement in returns is larger.

So in fact the stock market surge today is not quite in line with the paper’s conclusions.

But, for once, a masterly performance by Tendulkar the “Master Blaster” has coincided with an India win!!

So the correlation is permitted some poetic licence.

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