Opportunity to buy pharma stocks?

Market operators believe foreign institutional investors (FIIs) are likely to pare their positions in pharma stocks in the next three months, as valuations have run up and many companies are battling compliance issues with the US Food and Drug Administration. "Since the Budget focus has been on infrastructure, many FIIs are talking about getting into these stocks which are much cheaper compared to pharma companies. When FIIs start selling, it will be a small window for investors to buy these shares," says the head of a brokerage house. Given that the long-term outlook for pharma is quite strong, investors should use this opportunity, say market players.

Joydeep Ghosh

 

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Move to stop the 'halt'

Market players are mulling legal recourse, if the government's proposal to suspend trading in a stock on its offer-for-sale day is accepted. They believe the move is anti-investor, as it deprives existing investors from accessing the market during the normal trading day. Given the government's disinvestment overdrive, market players fear the proposal would be accepted.

Sneha Padiyath

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DVRs of public sector banks

The government is likely to allow some public sector bank (PSBs) to raise capital by issuing shares with differential voting rights (DVRs), say sources. Such shares, which don't have voting rights but offer higher dividend, might help PSBs raise equity capital without dilution of government stake at a time when most of them are trading below their book value. Also, BSE's move to allow DVR become part of indices will be another incentive.

Sneha Padiyath