Sensex at 19,000!

Mon, 13 Sep 11:30 am

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After starting today’s session on a positive note in the morning, Indian indices have managed to hold on to their gains. Other key Asian markets too are trading strong. Currently heavyweights in the Sensex are in the green with stocks from the banking and oil & gas space witnessing strong buying activity. However, stocks from the consumer durables and FMCG space are trading flat.

Currently, the BSE-Sensex is trading up by around 292 points, while the NSE-Nifty is up by about 87 points. Strong buying interest is also being witnessed amongst the mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading up by 0.9% and 0.7% respectively. The rupee is trading at 46.31 to the US dollar.

NBFC stocks are mainly trading positive with HDFC and Srei Infrastructure Finance leading the gains. Infrastructure Financing Company IDFC is planning a Rs 34 bn issue of tax free infrastructure bonds. The money will be raised in various tranches by the end of FY11. The total tenure of the bonds will be 10 years with a lock-in period of five years. Post this period the issuer can provide buy-back facility. A maximum tax-break of Rs 20,000 in a financial year will be provided to investors who invest in these bonds. This saving will be in addition to the Rs 100,000 annual tax-savings limit. After the lock-in period, an investor can take loans against these bonds and can also exit through the secondary market. The bonds will be listed both on the NSE and the BSE. The coupon for these 10-year bonds will be close to the coupon on the 10-year government bond. But, it cannot be above it. IDFC has an AAA rating from ICRA and Fitch. IFCI was the first company to raise such bonds, which received strong interest from retail investors and Hindu Undivided Families, according to a leading business daily.

Realty stocks are trading mixed with DB Realty and Unitech leading the gains. However, Orbit Corporation and Sobha Developers are trading weak. As per a leading news daily, DLF is planning to develop about 170 villas, 100 apartments and hotels across Shimla, Kasauli and Goa at an investment of Rs 50 bn. These launches would be in the premium housing segment after a series of low cost housing projects launched by the company at the height of the economic crisis. DLF has also tied up with various hospitality chains to manage the villas and hotels in these regions. Though the prices of villas and apartments have not been fixed so far it is likely to be in the vicinity of Rs 30 m for the villas in Shimla, an indication that the demand for high end housing is returning.