Last week ended with a rally on the bourses in the backdrop of not-so-encouraging results. But with results of around 140 companies, which constitute around 30 per cent market capitalisation, there are trends which are disturbing. The second-half performance has proved to be worse than the first. Sales have grown at around 7 per cent compared with a growth of 23 per cent in the first-half. The rally was certainly triggered by RIL. There were other scrips which moved up in sympathy, not only because of that but because they were at the lower end of their price pattern. EIH, Indian Hotels are examples. While it is clear that investors would have to wait for over a year to see around 20 per cent growth in their stock values, there are other compelling factors.

The stock prices are low on international comparison standards. So that limits the downslide risks. Overseas long-term investors with a longer span of investment plan would not miss the opportunity to pick up scrips as they fall. That in itself will provide the support and drive the market up.

President-ED row at DSE: The rift between the president of Delhi Stock Exchange (DSE) Paramjeet Singh and the executive director S S Sodhi occupied centrestage last week. With the board and administration at loggerheads, the crucial board meeting to finalise the V-SAT agreement was postponed. Meanwhile, the uncertainty over the petro price hike saw the DSE sensitive index opening the week with a loss of 1.57 points at 764.53 points.

The bearish sentiments continued for the next two days with the index shedding almost 6 points to close at 759 points on Wednesday. The recovery, aided by some good corporate results, began on Thursday and saw the index closing the week at 776.55 points, up 10.45 points from the previous week's close of 766.10 points. Ranbaxy Laboratories was the most prominent gainer in the specified category, moving up by Rs 61.75 to close at Rs 612. The other gainers include Smithkline Beecham (up Rs 29), Bajaj Auto (Rs 19.50), MTNL (Rs 14.55), ITC (Rs 12.25) and Telco (Rs 2.4). The bear hammering in the ACC counter continued this week too. Lacklustre trading on CSE: Barring a rally induced by Reliance on bonus rumours, the week saw lack of buying interest and low volumes on the Calcutta Stock Exchange. Bank and PSU shares were in demand mainly from institutional investors. Sentiments continued to be weak on Wednesday and pivotals reeled under selling pressure. Thursday was an eventful day as trading was disrupted for two hours due to a snag in the V-SAT link.

Settlement was deferred till the next day as V-SAT users had to be accommodated in the contingency pool and segregation of trades (member-wise) was not possible immediately. Turnover in the three and half hours of curtailed trading was good at Rs 335.24 crore with bulk of the volumes coming from squaring up of outstanding positions. Reliance was in the limelight as expectations of a bonus issue resurfaced. Volumes in Reliance picked up to Rs 167.48 crore relegating SBI and ITC to the second and third spots respectively. With reversal of trades done by V-SAT users in the contingency pool, Friday's turnover of Rs 757.26 crore included the crossed deals to segregate trades to the respective users.

Bearish trend on Cochin SE: The trend on the Cochin Stock Exchange was bearish last week. After a moderate recovery on Monday, share prices fell across-the-board on Tuesday and Wednesday without showing any resistance. However, on Friday liquid scrips led by RIL and Reliance Capital staged a short rally. But, the momentum could not be sustained and the week closed on a weak note. The bear hammering pushed the Cochin Stock Exchange index further down by over 3 points. The cash flow into the market was also thin, affecting business on the exchange. Analysts say market was in a short-term bear phase as indicated by the decline in the advance-decline ratio. The trend was also reflected in the long-short positions.

There has been a general reduction in the volume outstanding in the past three weeks. This, according to them, indicates that most of the dealers had squared up their positions. Hyderabad SE to delist more firms: After delisting 24 companies from the bourse a fortnight back, the Hyderabad Stock Exchange is gearing up to force winding up procedures against these companies which have failed to pay listing fees for the past three years. The exchange has also decided to charge commercial fees for the new services to be provided by it as it had difficulty in realising its dues for its online services. Thanks to the precarious financial position, the exchange has had to resort to recover its dues from its on-line services, the HOST, from the member brokers. Although recovering the meagre Rs 8.50 lakh due to it may be difficult for the exchange, as most of the 24 companies are sick, if not been wound-up by now, the move is a warning to the 90-odd other companies who have defaulted in paying the listing fees for the past two years.

Off-floor trading catches on in Shanghai: About half of the stock trading on the Shanghai Stock Exchange is now being traded through exchange's computerised system. The exchange started computerised trading in October 1996 and the business has developed rapidly, enhancing the speed and accuracy of stock trading. About 800 stock trading offices from other parts of China have now been linked to the exchange's off-floor computerised system and 330 others in Shanghai have also been connected.

Seoul stocks at yearly high: Stocks closed at another yearly high on Saturday as investors continued to believe in a coming economic turnaround and falling interest rates. Better-than-expected macroeconomic indicators also boosted investor hopes on the bourse. The composite stock index stood at 756.77 at the close, up 10.41 points from Friday. Rumours that Hanshin Construction Co would default on loans, as its main creditor, Seoul bank, refused further credit to the company, dampened early morning trading, but the market shrugged off anxieties and turned around.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.