Powering ahead
Bulls are not showing any signs of fatigue yet in Exide, so the spot price seems to indicate. But derivatives data shows that bulls are unwinding their positions. Friendly circles and HNIs close to them have pared their positions after having made handsome returns, and they are finding plenty of retail investors to unload their stock on. Domestic fund managers, however, are learnt to be reluctant to buy the stock at higher levels. The more enterprising deep pocketed investors are betting that the stock may not sustain at higher levels. That could explain the steady rise in short positions in the NSE’s securities lending and borrowing window to over 2.2 million shares.
Dialling telecom
Even as the outlook on the market has turned cautious in the run up to the general elections, one sector has caught the fancy of wealthy individual investors. The Vodafone FPO may have partly contributed to the change in sentiment. This, despite the Street being divided on the whether the latest round of fund raising by Vodafone can materially turn around the fortunes of the company. The bull argument for telecom goes something like this: the government is reluctant to allow a duopoly situation in the sector. By extension, it needs to ensure the survival of Vodafone. The other chatter is that telecom tariffs are likely to go up soon after the election results. If that happens, every player stands to benefit.
An eye on options
After the sudden U-turn in benchmark indices last Thursday, the mood in the options market is jittery ahead of Nifty expiry this Thursday. That is also because it is the expiry for both the weekly and monthly options' contracts. There was massive activity in call options of Nifty 22300 on Monday. At this point, the maximum pain point for the Nifty is also 22,300, meaning that maximum number of option buyers will lose money if the Nifty expires close to that mark on Thursday. By corollary, that is the level at which most option writers stand to make money.
The dividend paradox
Angel One reported record earnings for the March quarter, but the stock is still some way off from the peak seen in January. Also, the company has stepped up its dividend payout of late. Given the bullish outlook on the stock market and Angel’s strong operating numbers, fund managers and HNIs should have been rushing to buy the stock. This diarist learns that Angel’s decision to raise funds through a QIP has not gone down well with the Street. The increase in its dividend payout is another way of saying that there are not too many avenues to deploy funds. That being the case, why did the company go in for fund-raising through equity dilution, they ask. With power comes responsibility, so the saying goes. And with extra funds come the pressure to deploy it well enough so that return ratios are maintained.
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