Satyam, Zee Emerge As New Market Pets

Touted as the barometer of the market sentiment till a few months back, ITC seems to be rapidly losing ground to Satyam Computer and Zee Telefilms.

While Satyam Computer has established itself as the second-most actively traded scrip in terms of turnover over the last three to four months, Zee Telefilms figures among the top four on any given day.

"Both these scrips are favoured by foreign funds, both long-term as well as hedge funds, because of the excellent long-term growth potential in these stocks as well as the liquidity factor at the counters. Fund managers are still upbeat about quality software stocks at current prices whereas in case of Zee Telefilms, apart from being the only listed media stock, the company is doing well.

 

Till a few months back, funds were apprehensive of getting into these scrips because of the fear that they would not get an exit in case they wanted sell-out," says a source at an foreign institutional investor (FII) brokerage. Apart from a few trading sessions when trading volumes touched one crore shares, ITC volumes have remained stagnant between 25-60 lakh shares on the Bombay Stock Exchange (BSE) during the current calendar year. This is also partly owing to the fact that volumes at the bourses have been on the decline since the sensex began its downtrend in late April this year.

However, volumes at Satyam Computer and Zee Telefilms have been steadily on the ascend from the beginning of the present calendar year. On the BSE, from a meagre 20,000 shares being traded on a daily average, volumes have multiplied 150 times to nearly 30 lakh shares daily. In case of Zee Telefilsm , average daily traded volumes have spurted 100 times from 5,000 shares to five lakh shares. "The ITC scrip seems to have lost its volatility recently. Earlier, there would be a sharp fluctuation of around Rs 20-30 in a single trading session almost every other week. But of late, the volatility has died down. These sharp fluctuations are now being witnessed at the Satyam Computer and Zee Telefilms counters.

Also because of a good intra-day price movement, punters are now gradually moving over to these counters," says a BSE broker. In terms of price movements, ITC touched a new 52-week high of Rs 830 in mid-May this year. Since then, the scrip has shed 25 per cent till date and is quoted below the Rs 600 mark. The prices of Satyam Computer and Zee Telefilms were also caught by the downtrend in sentiments, with both the scrips crashing to Rs 289 levels in the last week of June. However since then, the price of Satyam Computer has appreciated by 74 per cent as of date, while that of Zee Telefilms has appreciated by a whopping 110 per cent.

"These counters are favoured by operators, too, because of the low floating stock in these scrips. As a result it becomes easy to influence the prices of these scrips in a single trading session. Very often, there are rumours in the market that the Reserve Bank of India (RBI) has given clearance to a foreign fund to purchase one lakh shares and that the fund will be buying the shares through the open market.

As far as Zee Telefilms is concerned, despite repeated company denials, speculation still persists over a possible merger with Star TV," says a dealer at an institutional brokerage.