MUMBAI: A growing number of companies have been opting for a buyback of shares to support the price in the current phase of market volatility. While the trend is mostly evident among small- and medium-sized companies, the market also expects large-sized companies to join the buyback bandwagon, after FMCG major Hindustan Unilever (HUL) announced a similar move last week.
Apart from HUL, a few other companies such as Geodesic, Manaksia, FDC, Binani Cement, Jindal Poly, ARO Granite and Bright Brothers have either announced or are planning to consider share buyback. Analysts expect more companies to follow this route due to several advantages.
According to Angel Broking CMD Dinesh Thakkar, many companies may want to buyback their shares, but shareholders’ response remains a major concern. “Many companies are quoting much below intrinsic value of their shares and so any buyback offer at the current levels may not receive good response from the shareholders. They will not be able to realise true value from selling shares,” said Mr Thakkar.
Last week HUL said that it would consider buying back the shares from the market, at its board meeting on June 11. Buyback of shares helps raise promoters’ stake using company funds and the reduced equity base improves its earnings-per-share (EPS) in the subsequent years. All these factors keep shareholders confidence high in the company. However, many companies, in the past, could not purchase even a single share, as the market price rose beyond the maximum buyback price soon after they started the buyback.
For instance, Delhi-based Apollo Tyres had planned to buy back equity shares worth Rs 122 crore from the open market at a maximum price of Rs 25 a piece. However, it could not buy back any shares, because of the spurt in the market price immediately after the commencement of the buyback programme.
Other larger companies that have closed their buyback in the past few months include Provogue and Merck, among others. Provogue, which had announced Rs 50-crore buyback, utilised almost 25% of the offer buying close to 20 lakh shares. Merck, which came out with a Rs 45-crore offer, utilised almost 23% of the buyback limit or bought close to 2.6 lakh shares.
When a company buys back shares, it sends out a signal that the company has enough surplus cash to pay back to its shareholders at what it thinks is the true worth of the shares. There were many companies that had announced buyback last year, after share prices crashed more than 80% in most cases.
However, many stocks rose above the buyback price with a sharp recovery in the market, resulting in many companies discontinuing or deferring their plans.
Analysts say that a buyback does not result in much of the benefits for investors despite the offers being at a premium to the prevailing market price. For instance, in the case of Geodesic and Manaksia, the current market price is way below the maximum buyback price. Geodesic is trading at Rs 101, while the company has announced its maximum buyback price of Rs 150. Similarly, Manaksia is currently trading at Rs 110, while maximum buyback price at Rs 200.
The market has so far not taken the buyback offer very seriously, as the stock price continues to trade at a significant discount to the maximum buyback price. The end date for both of them is almost one year from hereon.
Tuesday, June 8, 2010
Friday, May 28, 2010
Apple iPad's international launch
Apple Ipad is launched from today in Australia and major parts of Asia.
Have a look at these crazy pictures in which people are rallying to get one for themselves
Have a look at these crazy pictures in which people are rallying to get one for themselves
Stocks Extend Rebound From Nine-Month Low; Oil, Won Strengthen
Stocks advanced for a third day, led by emerging markets, extending the rebound from a nine-month low. Oil rallied above $75 a barrel and the South Korean won strengthened.
The MSCI Emerging Markets Index rose 1.8 percent as of 9:36 a.m. in London, poised for the biggest three-day rally in a year. The MSCI World Index, a gauge of equities in 24 developed nations, added 0.7 percent. Futures on the Standard & Poor’s 500 Index advanced 0.1 percent. Crude increased for a third day. South Korea’s won gained 2.4 percent against the dollar and the euro strengthened 0.5 percent against the dollar.
This week’s advances in stocks and commodities pared a rout in May that’s the deepest since October 2008, the month after the collapse of Lehman Brothers Holdings Inc. U.S. consumer spending probably rose in April for a seventh consecutive month as incomes improved, economists said before a Commerce Department report scheduled for later today.
“I’m an optimist,” James Bevan, chief investment officer at CCLA Investment Management, said in a Bloomberg Television interview. “The economic fundamentals are rather better than some suspect and that’s certainly coming through in terms of the corporate earnings numbers. Companies are demonstrating better profits than many people had dared anticipate.”
The Stoxx Europe 600 Index rose 0.4 percent as Travis Perkins Plc rallied. The owner of Wickes home-improvement stores surged 8.3 percent after offering to buy BSS Group Plc to create the U.K.’s largest plumbing and heating materials chain.
BP Declines
BP Plc slid 1.9 percent after Europe’s second-largest oil company said the “top kill” procedure to plug a leaking well in the Gulf of Mexico may last another 24 to 48 hours. The MSCI Asia Pacific Index climbed for a third day, surging 1.5 percent.
The MSCI emerging-markets index headed for its highest closing level in eight days. South Korea’s Kospi Index advanced 1 percent as foreign investors added to stock holdings for the first time in 10 days and a central bank report showed manufacturers’ confidence stayed near a seven-year high. The nation’s equities and currency tumbled earlier this week amid mounting tension with North Korea over the sinking of one of the South’s warships. The ruble in Russia, the world’s largest energy exporter, strengthened 1.1 percent versus the dollar.
The euro rose for a second day against the dollar, strengthening 0.5 percent to $1.2430. It appreciated 0.8 percent compared with the yen, which declined against all 16 of its most-traded counterparts. The U.S. Dollar Index, which tracks the currency against six trading partners, slid 0.2 percent.
U.S. Futures
Futures on the S&P 500 rose 0.2 percent before reports on U.S. personal spending, business activity and consumer confidence. Spending probably increased in April for a seventh consecutive month as incomes improved, economists said before a report due at 8:30 a.m. in Washington.
Other data today may show the Institute for Supply Management-Chicago Inc.’s business barometer, due at 9:45 a.m., fell to 61 from a five-year high of 63.8 in April. At 9:55 a.m., a report from Thomson Reuters/University of Michigan may show its consumer sentiment index climbed to 73.3 this month from 72.2 in April.
Crude oil for July delivery gained 1.4 percent to $75.61 a barrel in New York trading. Copper for delivery in three months was 0.1 percent higher at $6,992 a metric ton on the London Metal Exchange. Aluminum and zinc also rose. Gold for immediate delivery added 0.2 percent to $1,214.90 an ounce, rising for a fifth consecutive day.
Bonds Rise
Government bonds rose, with the yield on the 10-year Treasury falling four basis points to 3.33 percent. The yield on the German bund, Europe’s benchmark government security, also dropped three basis points, to 2.69 percent.
The cost of protecting against a default on European corporate bonds fell, with the Markit iTraxx Crossover Index of credit-default swaps on 50 mostly junk-rated companies declining 13.1 basis points to 547.1, according to Markit Group Ltd. Contracts tied to Greece’s government debt dropped 15.5 basis points to 670.5, after climbing as high as 941 on May 6 at the height of the country’s debt crisis, CMA DataVision prices show.
Credit markets froze this month, with global companies selling the smallest amount of bonds in a decade, according to data compiled by Bloomberg. Borrowers issued $61.1 billion of notes in currencies from dollars to yen, a third of April’s tally and the least since December 2000. The extra yield investors demand to hold the securities instead of benchmark government debt widened 44 basis points to 193, Bank of America Merrill Lynch index data show, the biggest increase since the aftermath of Lehman Brothers Holdings Inc.’s collapse.
The MSCI Emerging Markets Index rose 1.8 percent as of 9:36 a.m. in London, poised for the biggest three-day rally in a year. The MSCI World Index, a gauge of equities in 24 developed nations, added 0.7 percent. Futures on the Standard & Poor’s 500 Index advanced 0.1 percent. Crude increased for a third day. South Korea’s won gained 2.4 percent against the dollar and the euro strengthened 0.5 percent against the dollar.
This week’s advances in stocks and commodities pared a rout in May that’s the deepest since October 2008, the month after the collapse of Lehman Brothers Holdings Inc. U.S. consumer spending probably rose in April for a seventh consecutive month as incomes improved, economists said before a Commerce Department report scheduled for later today.
“I’m an optimist,” James Bevan, chief investment officer at CCLA Investment Management, said in a Bloomberg Television interview. “The economic fundamentals are rather better than some suspect and that’s certainly coming through in terms of the corporate earnings numbers. Companies are demonstrating better profits than many people had dared anticipate.”
The Stoxx Europe 600 Index rose 0.4 percent as Travis Perkins Plc rallied. The owner of Wickes home-improvement stores surged 8.3 percent after offering to buy BSS Group Plc to create the U.K.’s largest plumbing and heating materials chain.
BP Declines
BP Plc slid 1.9 percent after Europe’s second-largest oil company said the “top kill” procedure to plug a leaking well in the Gulf of Mexico may last another 24 to 48 hours. The MSCI Asia Pacific Index climbed for a third day, surging 1.5 percent.
The MSCI emerging-markets index headed for its highest closing level in eight days. South Korea’s Kospi Index advanced 1 percent as foreign investors added to stock holdings for the first time in 10 days and a central bank report showed manufacturers’ confidence stayed near a seven-year high. The nation’s equities and currency tumbled earlier this week amid mounting tension with North Korea over the sinking of one of the South’s warships. The ruble in Russia, the world’s largest energy exporter, strengthened 1.1 percent versus the dollar.
The euro rose for a second day against the dollar, strengthening 0.5 percent to $1.2430. It appreciated 0.8 percent compared with the yen, which declined against all 16 of its most-traded counterparts. The U.S. Dollar Index, which tracks the currency against six trading partners, slid 0.2 percent.
U.S. Futures
Futures on the S&P 500 rose 0.2 percent before reports on U.S. personal spending, business activity and consumer confidence. Spending probably increased in April for a seventh consecutive month as incomes improved, economists said before a report due at 8:30 a.m. in Washington.
Other data today may show the Institute for Supply Management-Chicago Inc.’s business barometer, due at 9:45 a.m., fell to 61 from a five-year high of 63.8 in April. At 9:55 a.m., a report from Thomson Reuters/University of Michigan may show its consumer sentiment index climbed to 73.3 this month from 72.2 in April.
Crude oil for July delivery gained 1.4 percent to $75.61 a barrel in New York trading. Copper for delivery in three months was 0.1 percent higher at $6,992 a metric ton on the London Metal Exchange. Aluminum and zinc also rose. Gold for immediate delivery added 0.2 percent to $1,214.90 an ounce, rising for a fifth consecutive day.
Bonds Rise
Government bonds rose, with the yield on the 10-year Treasury falling four basis points to 3.33 percent. The yield on the German bund, Europe’s benchmark government security, also dropped three basis points, to 2.69 percent.
The cost of protecting against a default on European corporate bonds fell, with the Markit iTraxx Crossover Index of credit-default swaps on 50 mostly junk-rated companies declining 13.1 basis points to 547.1, according to Markit Group Ltd. Contracts tied to Greece’s government debt dropped 15.5 basis points to 670.5, after climbing as high as 941 on May 6 at the height of the country’s debt crisis, CMA DataVision prices show.
Credit markets froze this month, with global companies selling the smallest amount of bonds in a decade, according to data compiled by Bloomberg. Borrowers issued $61.1 billion of notes in currencies from dollars to yen, a third of April’s tally and the least since December 2000. The extra yield investors demand to hold the securities instead of benchmark government debt widened 44 basis points to 193, Bank of America Merrill Lynch index data show, the biggest increase since the aftermath of Lehman Brothers Holdings Inc.’s collapse.
25 stock picks from 25 great investors
View of 25 money managers with gold-standard track records and their single best stock pick each.
Starting with Qualcom here's the list of fortune top 25 stock picks for the 2010.
Click here for the list and if you have any other stock you think should be on the list let me know.
Starting with Qualcom here's the list of fortune top 25 stock picks for the 2010.
Click here for the list and if you have any other stock you think should be on the list let me know.
Wednesday, April 21, 2010
Hero Honda to pay 4,000% dividend
NEW DELHI: Hero Honda declared its highest dividend yet on Tuesday, and held out the possibility of another payout next month, part of the company' spush to reward shareholders as it celebrates its silver jubilee this year.
The world’s largest two-wheeler maker by volumes will pay a 4,000% interim dividend of Rs 80 on each share of Rs 2 face value, which in percentage terms is the highest payout by an Indian company to date.
The Munjal family-controlled Hero Group and Japan’s Honda Motor Co, owners of 26% each in the company, will gain nearly Rs 486 crore each after the payout. The interim dividend will result in an outgo of Rs 1,869 crore. A second board meet on April 19 would decide on another dividend from this year’s profits, said Hero Honda CFO Ravi Sud.
In the last 3-4 years, we have accumulated quite a bit of cash, and ... the board thought this is the right time to take care of shareholders,” said Mr Sud.
Hero Honda had cash reserves of Rs 5,400 crore as of today, helped by strong sales and tight capital management. The company hopes to close the year to March 31 with sales of 4.5 million two-wheelers. Its net profit rose 78.3% to Rs 535.77 crore for the quarter ended December 2009 from a year ago.
Hero Honda invested Rs 350 crore this year to expand production capacity and on new products. It is also building a new plant. “With high level of profitability and high EBIDTA margins, cash will continue to accumulate unless the payout ratio is increased substantially,” said Mr Sud.
Shares in the firm closed nearly 2% down at Rs 1,966.70 on Tuesday. Analysts said news of the dividend was discounted by the market. Investors were expecting a big payout from Hero Honda, as it’s a cash-rich company and treasury returns have not been good in recent months, said Vaishali Jajoo, analyst with Angel Broking in Mumbai.
Hero Honda is known for its double-digit dividends, but its latest interim dividend payout is around four times the final dividend payouts of each of the previous five years. The company paid Rs 20 dividend on every Rs 2 share in 2004-05 and 2005-06. It paid Rs 17, 19 and 20 respectively in the next three years.
The company has set April 15 as the record date for paying the special dividend, it told NSE. That means shareholders will receive the dividend from April 22.
Also see Companies paying the highest dividend in the last 6 years
The world’s largest two-wheeler maker by volumes will pay a 4,000% interim dividend of Rs 80 on each share of Rs 2 face value, which in percentage terms is the highest payout by an Indian company to date.
The Munjal family-controlled Hero Group and Japan’s Honda Motor Co, owners of 26% each in the company, will gain nearly Rs 486 crore each after the payout. The interim dividend will result in an outgo of Rs 1,869 crore. A second board meet on April 19 would decide on another dividend from this year’s profits, said Hero Honda CFO Ravi Sud.
In the last 3-4 years, we have accumulated quite a bit of cash, and ... the board thought this is the right time to take care of shareholders,” said Mr Sud.
Hero Honda had cash reserves of Rs 5,400 crore as of today, helped by strong sales and tight capital management. The company hopes to close the year to March 31 with sales of 4.5 million two-wheelers. Its net profit rose 78.3% to Rs 535.77 crore for the quarter ended December 2009 from a year ago.
Hero Honda invested Rs 350 crore this year to expand production capacity and on new products. It is also building a new plant. “With high level of profitability and high EBIDTA margins, cash will continue to accumulate unless the payout ratio is increased substantially,” said Mr Sud.
Shares in the firm closed nearly 2% down at Rs 1,966.70 on Tuesday. Analysts said news of the dividend was discounted by the market. Investors were expecting a big payout from Hero Honda, as it’s a cash-rich company and treasury returns have not been good in recent months, said Vaishali Jajoo, analyst with Angel Broking in Mumbai.
Hero Honda is known for its double-digit dividends, but its latest interim dividend payout is around four times the final dividend payouts of each of the previous five years. The company paid Rs 20 dividend on every Rs 2 share in 2004-05 and 2005-06. It paid Rs 17, 19 and 20 respectively in the next three years.
The company has set April 15 as the record date for paying the special dividend, it told NSE. That means shareholders will receive the dividend from April 22.
Also see Companies paying the highest dividend in the last 6 years
20 top performing stocks of 2009
Thou the world has seen recession like never before and stock market dipping too low with more than 300 banks losing money in USA alone, there are still stocks that amazed its shareholders by giving them surprising returns. Here's the list of 20 top performing stocks which fortune 500 has listed. Hope they will keep this steady.
20 top-performing stocks
20 top-performing stocks
Thursday, December 10, 2009
Nepse soon allowing brokers to operate outside valley.
Nepal Stock Exchange (Nepse) is soon allowing the stock brokers to operate outside the Kathmandu Valley by permitting them to open their branch office there. "We have already initiated works to let the brokers operate outside the Valley," Tanka Paneru, chairman of Nepse, told myrepublica.com. To start with, Nepse is planning to allow the existing 23 stock brokers to operate in at least one city outside the Valley.
Once opened, it will enable the investors outside the Valley to buy and sell shares at the secondary market from the local level. It will also free the investors from the need to come to Kathmandu for transaction of shares, thereby supporting the expansion of the market. Nepse took the decision to this effect as per the on requests made by the Stock Brokers´ Association. It had recently formed a committee to finalize the procedures to recommend for the smooth execution of the plan. "We are close to finalizing the guidelines for selecting brokers and steer their operations outside the Valley," said Paneru, adding that the guidelines will be finalized within the next few days.
Stock brokers then can open branches outside the Valley by just acquiring approval of Securities Board of Nepal (SEBON). NEPSE hopes that its new plan, once implemented, will drastically raise the number of investors in the secondary market. Brokers too said the induction of new investors will render the volume of existing stock in the market nominal. Despite these advantages, Nepse had so far refrained from allowing brokers to go out of the Valley, citing technical reasons.
Nepse, meanwhile, has not yet taken any step to recommence induction of new stock brokers in the market even though the court allowed it to move ahead with the process. Nepse officials maintained that they have not yet received a copy of court´s verdict to start the process. Two years ago, Nepse had initiated the process to add 27 new stock brokers. But the process was halted in the wake of Constituent Assembly polls, investigation by Commission for Investigation of Abuse of Authority (CIAA) and filing of a case against the process at the court. "We will recommence the process as soon as we get the copy of court´s decision," said Paneru.
A total of 334 companies had lodged application at the Nepse, seeking permission to operate as stock brokers. Of them, NEPSE had approved the files of 316 companies. However, the disruption of the process to induct new stock brokers has left number of stock brokers low at 23 from 32 of the past, while the number of listed companies has soared to 165 from 60 over the last 19 years. This has created problems for some 1.5 million investors who have put their money on shares..
Once opened, it will enable the investors outside the Valley to buy and sell shares at the secondary market from the local level. It will also free the investors from the need to come to Kathmandu for transaction of shares, thereby supporting the expansion of the market. Nepse took the decision to this effect as per the on requests made by the Stock Brokers´ Association. It had recently formed a committee to finalize the procedures to recommend for the smooth execution of the plan. "We are close to finalizing the guidelines for selecting brokers and steer their operations outside the Valley," said Paneru, adding that the guidelines will be finalized within the next few days.
Stock brokers then can open branches outside the Valley by just acquiring approval of Securities Board of Nepal (SEBON). NEPSE hopes that its new plan, once implemented, will drastically raise the number of investors in the secondary market. Brokers too said the induction of new investors will render the volume of existing stock in the market nominal. Despite these advantages, Nepse had so far refrained from allowing brokers to go out of the Valley, citing technical reasons.
Nepse, meanwhile, has not yet taken any step to recommence induction of new stock brokers in the market even though the court allowed it to move ahead with the process. Nepse officials maintained that they have not yet received a copy of court´s verdict to start the process. Two years ago, Nepse had initiated the process to add 27 new stock brokers. But the process was halted in the wake of Constituent Assembly polls, investigation by Commission for Investigation of Abuse of Authority (CIAA) and filing of a case against the process at the court. "We will recommence the process as soon as we get the copy of court´s decision," said Paneru.
A total of 334 companies had lodged application at the Nepse, seeking permission to operate as stock brokers. Of them, NEPSE had approved the files of 316 companies. However, the disruption of the process to induct new stock brokers has left number of stock brokers low at 23 from 32 of the past, while the number of listed companies has soared to 165 from 60 over the last 19 years. This has created problems for some 1.5 million investors who have put their money on shares..
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