Street Signs: A bitter pill for Gland Pharma, Small-cap stock's F&O & more

Fund managers may get their smartphones back

Capital markets regulator Securities and Exchange Board of India plans to ease a rule that will make fund managers breathe a little easier. In a consultation paper, Sebi said it may allow asset management companies (AMCs) to relax the present practice of recording all communications by fund managers and barring access to personal mobile phones during market hours. The lack of access to phones has been a major pain point for fund managers, given that their usage goes beyond calling — from making financial transactions to conducting numerous day-to-day affairs. Many AMCs may refuse to relax the provision to stay on the safe side.

A bitter pill for Gland Pharma: Locked at 20% lower circuit

Shares of Gland Pharma plunged 20 per cent on Friday to hit a 52-week low after the Shanghai-based Fosun Pharma-promoted firm missed revenue estimates for the 2022-23 (FY23) January-March quarter by a wide margin, capping a tumultuous FY23. The miss comes on the back of a key customer filing for bankruptcy, high competition from Chinese players, and production shutdowns. Shares of Gland Pharma at Rs 1,070 are now down 29 per cent over their issue price and 66 per cent from their peak. Analysts are split on whether investors should take advantage of the sharp fall in stock prices, given the near-term cloudy outlook. Nearly 50 per cent of the analysts tracked by Bloomberg have a ‘buy’ rating on the stock. Motilal Oswal, which has a target price of Rs 1,460 on the stock, expects the company to see a “slow recovery” over the next 12–15 months.

Small-cap stock’s F&O ejection to affect Intellect

The National Stock Exchange has announced the exclusion of Intellect Design Arena from the derivatives segment with effect from July 28. There will be no new contracts on the scrip starting with the August series. Currently, the open interest in the stock is close to Rs 265 crore, according to Nuvama Alternative & Quantitative Research. A study by the brokerage shows that stocks that get removed from the futures and options segment witness downward pressure. “In recent instances, eight out of 10 times, a stock has corrected one week prior to the announcement with an average decline of 1.9 per cent, and seven out of 10 times, a stock has corrected two weeks prior to the announcement with an average decline of 2.5 per cent,” reads a note by Nuvama Institutional Equities.