Algo theory
BSE shares continue to climb higher. Latest chatter on the Street is that some of the big algo trading firms are showing interest in taking up the exchange’s co-location server facility, now that options volumes have picked up in a big way. The stock has had a fantastic run over the last year and with every renewed surge, some new theory comes up to justify the rise. Co-location server facility is a money spinner, but much will also depend on whether the big boys of the algo game are willing to put money where their mouth is. BSE has managed to wrest market share from NSE, but it needs to show that it can make meaningful profits on those volumes. March quarter numbers could give some indication on that front.
Towering higher
Even as the Street remains divided in its outlook on Vodafone, bulls are driving the Indus Towers stock to fresh highs. The popular story is that Vodafone Idea will repay its dues to Indus once it raises money. Players tracking Indus say the money won’t come in immediately, but at least there is hope that the money will come over time. The other chatter doing the round that Vodafone Plc is eyeing Rs 360-380 as the price point for selling a good part of its 21 percent stake in the company. The stock may no longer be cheap, but bulls are peddling the narrative that since block deals happen at a discount to market price, the spot price may still have some steam left.
Brotherly love
For much of last year, shares of asset management companies (AMCs) were struggling despite the market making new highs. Finally, things seem to be looking up for the sector. Fund managers' affection for their industry's stocks is growing. AMCs are now benefitting from a favourable confluence of strong inflows and broad-based uptrend. As share prices rise, so do the net asset values, which in turn boost fund houses’ revenues as the fee is charged on the assets under management. This apart, SEBI going silent on Total Expense Ratio (TER) tweaks, which would have hurt large players more than the small players, is also being cheered by the bulls.
Power of long term
Market gurus often talk about the benefits of taking a long term view. When viewed over a very longtime frame, some deals can look like a lemon or a masterstroke. Take for instance the Silent Investor and his partner’s decision to sell their broking and investment banking business to a private sector bank way back in 2010. At that time it seemed that Silent and his partner had hit a jackpot and the bank had overpaid for the purchase. Fourteen years on, the situation is very different. Looking at the valuations that many of the broking-led finserv firms are commanding, Silent and partner may sometimes be wondering how things would have played out had they held on to their core business. The decision to sell at that point seemed a wise one as people were talking about broking as a sunset industry. The lesson broader for investors in general is that even industries whose obituaries are written can make a stunning comeback at some point.
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