Speculators Burn Their Fingers On Zee

Speculators out to make a killing at the Zee Telefims counter were in a for a rude shock yesterday. A hit-sell (sell at any rate) order by a leading FII fund in the Zee Telefilms scrip towards the fag end of the day caused mayhem, forcing the smaller players to exit their positions.

The scrip witnessed sharp volatility, first hitting the upper end of the circuit filter at the BSE and NSE on rampant speculative interest with only buy orders in sight, and then crashing from those levels following the sell order.

Although the exact quantity could not be confirmed, reliable sources said the order was in the range of 3.5-4 lakh shares. The scrip is currently in its no-delivery period on the BSE and will be entering the no-delivery period on the NSE from today. Since the sale was executed towards the closing session, it created panic at the counter as there was very little time to absorb the sales.On the BSE, the scrip crashed to an intra-day low of Rs 560 before edging up to Rs 567.75 , up Rs 11.25 over the previous close. On the NSE the scrip closed at Rs 573.35 , a loss of Rs 2 over the previous close. Traditionally, in the tug of war between operators and funds, operators have very rarely been caught on the wrong foot.

 

Many a time, funds are either forced to buy at high rates when they go shopping for a stock or sell at a lower rate if they go in for sales. Marketmen said the dumping of stock at the last moment was done to send a signal to the operators camp.

Satyam: The next ITC?

Satyam Computers seems to be another ITC in the making if one compares the volatile price movements in both stocks. The Satyam Computer stock which has just come out of its no-delivery period on both the BSE and NSE has been witnessing sharp volatility over the past few trading sessions

According to informed sources, foreign funds sold nearly 40 lakh shares of the scrip when it was in its no-delivery period. Among the sellers were the Abu Dhabi Commercial Bank, DB Investment Management Fund, Barings International Investment Fund, Prolific Fund, Jardine Fleming Fund and Genesis Fund. A top foreign brokerage is reported to have sold nearly 8 lakh shares on behalf of its client on a single day. Against this, some foreign and domestic institutions have purchased nearly 15 lakh shares.

The buzz in the market is that the remaining delivery-based selling has been absorbed by a leading operator, whose name is often linked to the movements in the ITC scrip.

The operator is currently reported to be controlling the price movements at the Satyam Computers counter.

Market grapevine has it that the operator is counting on the fact that even if funds do not come looking for the stock, given the craze for each and every available software scrip, the general public will eagerly lap up the stock at any available price.

Madras based DSQ Software has embarked on a major image building excercise following apprehensions about the management in the minds of fund managers.

Yesterday, top management officials of DSQ Software were in town making presentations to various domestic institutions, convincing them to buy their stock. The company has declared that it has sharply reduced its equity investments in group companies and expects to bring the figure to nil by the end of the current fiscal year.

The move seems to be paying off as there has been sustained fund based buying at the counter over the past few trading sessions.

Another Madras-based software company which has caught the market's fancy is the Maars Software scrip. In a meeting with select fund managers, company management has indicated an Earning Per Share(EPS) of nearly Rs 40, informed sources said.

And finally, look for some serious selling on the ITC scrip today. At the analysts meet in Calcutta, company officials put the provision figure at Rs 54 crore, which is far lower than the figure of Rs 100 crore as reported in a section of the press. This, coupled with a lower than expected net profit figure of Rs 526 crore, could trigger a sell off at the counter.