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Friday, August 28, 2009

Compact Disc to streamline global film production biz

Compact Disc India(CDI`s) has announced the restructuring and demerger plan to separate international film production business activities.

CDI`s prime focus will be on animation films` outsourcing business.

The revised business plans for outsourcing work for the FY 2009-10 will be revenue at Rs 2.3 billion and profit after tax (PAT) will be Rs 480 million and earnings per share (EPS) at Rs 50.16.

Thursday, August 27, 2009

Pyramid Saimira To Raise $100M; Detaches Production, Distribution Wings

BSE-listed Indian theatre chain owner Pyramid Saimira (PSTL)  informed the BSE that it will raise funds to the tune of $100 million via an international issue of securities including Foreign Currency Convertible Bonds (FCCBs), Global Depositary Receipts (GDRs), American Depositary Receipts (ADRs), subject to approval. PSTL recently approved qualified institutional placement measures to issue 1 crore equity shares and planned to offer 1 crore warrants to its promoters.

The financially distressed company is in dire need for funds after a share market scam led to a decline of its valuation, operational losses followed and box office failures delivered another hit to the company, it had to shut down 497 of its 745 screens. Its accounts were also paralysed by the Income Tax department, to which it owed Rs. 26.57 crores, due on March 31, 2009. PSTLposted losses of Rs. 1.37 billion in FY 2009.

The funds could be used to get its production and distribution of movies back on track. It needs to pay 300 employees’ salaries. Besides these, the group runs animation/gaming, hospitality, food and beverage and cine advertising companies. The company has not yet sold its gaming subsidiary Aurona Technologies, nor its US and Malaysia businesses - the non-core sectors the company planned to exit. The US subsidiary owns 21 screens, two radio stations, a banquet hall and a magazine, DesiPages and was suffering losses. The Malaysian one was profitable, and operates in the movie distribution sector.

De-merging Production & Distribution

The board of directors at the company have also approved the demerger of two divisions into subsidiaries - Pyramid Saimira Content Distribution and Pyramid Saimira Production International. This was the first step in the company’s plan to list the two subsidiaries. CNBC-TV18 reported the company plans to divest 40% stake to a strategic partner it has roped in as co-promoter.

Will this move help the company regain its financial balance or will it boomerang? The board hopes the subsidiaries will be freed of the negative publicity that was choking the company, and listing them will help the company open up avenues to raise more funds.

Birla Sun Life AMC declares dividend in BSL Tax Relief'96

Birla Sun Life AMC today announced a dividend of 40 per cent under the dividend option of Birla Sun Life Tax Relief'96.

The company would pay a dividend of Rs 4 per unit on face value of Rs 10. It is an open-ended equity-linked savings scheme (ELSS) with the objective of long-term growth of capital through a portfolio with a target allocation of 80 per cent equity, 20 per cent debt and money-market securities, the company said in a statement.

Sunday, August 23, 2009

Reliance Mutual Fund declares dividend for 3 schemes

Reliance Mutual Fund, a part of the Anil Dhirubhai Ambani Group, today announced dividends for three mutual fund schemes including its banking fund.

The Reliance Banking Fund holders will receive 20 per cent dividend, while the investors of Reliance Pharma Fund will get 15 per cent, the company said in a statement. Further, the company has also declared a dividend of 15 per for its Tax Saver (ELSS) fund."Our aim has always been to maintain positivity of results and ensure that we focus on long term wealth creation for our investors through prudent investment, monitoring of trends and higher safety," Reliance Mutual Fund CEO Sundeep Sikka said

Friday, August 21, 2009

Gain from pair & hybrid strategy in volatile mkts

The following is doing it's round on newsgroups.

Nifty Hybrid Strategy:

Buy 1 lot Nifty Sept 4500 Put at 194 and sell 1 lot each of Nifty sept
4400 Put at 150 and 4300 Put at 113.

Execute the strategy with minimum credit of Rs. 69.

Strategy is profitable till Nifty expires above 4131 with fixed profits
of Rs. 3450 above 4500.

The following can explain bit more about Pair and Hybrid strategy.

An extremely volatile stock market can be a horror even for seasoned short-
term traders. Trading during such days when indices show a gap-up or gap-down
opening or high intra-day swings is extremely difficult.

This scenario does not yield any positive results, even though traders may have a directional view for a stock for the next few trading sessions. Instead, traders are forced to exit the stock when it hits the stop loss, resulting in significant trading losses in a volatile market. Moreover, markets will be highly volatile during times of uncertainty, such as budget announcements, elections, important policy meetings, and other global and economic developments.

Given the current market scenario, Karvy Stock Broking has suggested few derivatives strategies to gain in this volatile market.

Long positions can be assumed in auto, BFSI, cement, energy and metals from current or lower Nifty support levels of 2530-2550 levels. Short positions can be accumulated in FMCG, telecom services and construction from higher levels of Nifty at 2800-2850 levels, the brokerage says.

“On the options front, deep out-of-the money March call options of software and telecom stocks like Infosys and Reliance Communications can be written on 5-10% of rally of the underlying, while at-the-money March call options in metals and energy stocks like Tata Steel and Reliance can be bought. Among other stocks, short positions can be assumed in Hind Unilever and Chambal Fertilizers out-of-the money call options,” the Karvy report says.

“For the week, we recommend shorting in telecom and FMCG from 2800-2850 levels of the Nifty, while fresh long positions can be assumed in energy and banking on dips in the market,” the report adds.

Pair strategy- Buy Wipro and Sell TCS

(Buy one lot of Wipro March futures @ 222-224 and sell one lot TCS March futures @ 506-510; timeframe: 10-12 days)

Technology stocks observed a broader range-bound movement in the last few months. The depreciation of the Indian rupee further helped to counter the dampened sentiments prevailing in these stocks. TCS and Wipro have shown a correlated movement in the past. The price correlation between TCS and Wipro currently stands at a higher 95.74% level from the low of 75.85% in the one-year data-set.

At the same time, the return correlation stands at a high of 72.40% in the last 120 trading sessions. The normalized price spread between TCS and Wipro is at 11.98 percentile in the one-year data window. At the same time, the price ratio between the stocks has started declining from 2.25 levels.

There is a high probability of convergence between the stocks from the current levels. We expect TCS to outperform Wipro in the near term. Currently, the pricing between these stocks is providing an opportunity to initiate a pair trade.

Monday on NSE at 12:08 pm, TCS March futures was trading at Rs 504.90, down 0.31 per cent from previous close while Wipro March futures was at Rs 224.90 slightly up 0.09 per cent.

Hybrid Strategy- Reliance Industries

(Buy ONE Reliance March futures @ 1280-1284 & buy ONE March 1290 put @ 40-44; Break even point: 1320; Target: 1390-1410; timeframe: 6-8 days)

Reliance has been trading on a positive note in the last few trading sessions. The stock witnessed accumulation of long positions in the F&O segment as it was holding the support levels of 1280 levels. The stock is likely to witness upward momentum on account of short covering as well as bargain buying at lower levels.

On the other hand, any bounce-back in crude oil prices and the positive developments relating to gas production in the KG-basin are likely to boost the positive sentiments for the stock.

Reliance March futures on NSE at 12:08 pm, was trading at Rs 1277.80 down 0.27 per cent from previous close.

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