NEW DELHI, March 16: With clouds of political uncertainty dispelled, the game of expectation has commenced on the bourses. Scrips from the steel sector are currently in the forefront as punters expect the new dispensation to revive the sagging fortune of a few sectors, including steel. A cross-section of marketmen feel that the new government would impart impetus to infrastructure projects, which in turn would spur demand for steel. Some others expect the government to levy anti-dumping duties and thus help shore up the low offtake and depressed prices. The renewed buying interest in these counters is clearly evident. For instance, SAIL shot up to cross its face value. Tisco also rose to Rs 139 from its Friday's close of Rs 135.20. The scrip saw a day's high of Rs 142.80. Tisco witnessed a surge in volumes with 17.30 lakh shares changing hands against the daily average volume of 12 lakh shares.In the case of Essar Steel, the scrip gained Rs 1.40 to close at Rs 19.40 (Rs 18) with high volume of over 1.43lakh shares. The day's high at the counter was Rs 21. While the worst is over for the sector, the future looks promising as the new government has a distinctly pro-domestic industry stance. Some protectionist measures like the levy of anti dumping duties is likely to be put in place. In the last couple of years, steel majors have been hit hard due to poor offtake and dumping by other countries like Turkey, CIS and Latin America.
Realisation for steel leader Sail has plummeted from Rs 1200 per tonne to mere Rs 100 per tonne in the last two years. The sector has also something to cheer about on the transportation front. With the railways planning to extend a 15 per cent discount on freight charges on incremental volumes, both Tisco and Sail stand to benefit. With the woes now coming to an end, marketmen are now taking a fresh look at the sector.
Another development in the favour of the beleaguered sector is the decision by steel majors across the country of not to under-cut prices. Even the US producershave recently effected a hike in the price of steel products and the hike per tonne has been $ 10 for HR Coils, $ 15 CR coils and $ 20 GP/GC sheets.
Much-awaited respite for Sail after two months; scrip goes above par
Steel Authority is back with a bang on the bourses. Prospects of a steel price hike, increase in demand and better realisations has pushed the scrip above its par value after a gap of almost two months. The scrip shot up to Rs 11.40 from the previous close of Rs 9.3 on the Mumbai Stock Exchange. The scrip even attracted a buyer freeze at the National Stock Exchange (NSE).
The scrip however, closed marginally lower at Rs 10.50 on BSE with huge trading volumes of over 80 lakh shares on Monday. Sail's scrip has been witnessing huge volumes in the past few days and it witnessed volumes in excess of 80 lakh for the second consecutive day. Average trading volumes in the past five sessions have been over 40 lakh shares on the BSE.
Sail's scrip first went below par in early December 1997,but bounced back to Rs 11 in early January this year. However, persistent downtrend on the bourses once again pushed the stock below par in January and the scrip slumped to an all-time low of Rs 7 on February 24 this year. The scrip started recovering from Rs 7.7 on March 6 to its current level of Rs 10.5.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
