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Our Market Bureau
Mumbai, Nov 12: Reliance once again shot into the limelight on rumours of a huge negotiated deal struck with UTI and a market gossip that the company would buy-back its shares at a premium to the market price. According to market sources, at about 2.45 pm, market was rife with rumours that the company had closed a negotiated deal with UTI at a price of Rs 145, a premium of over Rs 20 to the then prevailing market price.
What added fuel to the rally were unconfirmed reports of the company sending a buy-back proposal to investors. ``Rumour that the company had informed SEs that it would be buying back its share at Rs 140 genereated a lot of interest at the counter,'' said a dealer with foreign brokerage house. However, the company spokesperson refused any such development.
Reliance GDR on Thursday afternoon was traded at $ 6.35, registering a gain of 2.11 per cent over previous day's close. Despite the 6 per cent jump registered by its underlying stock which closed at Rs 127.35, the GDR was reportedlyquoting at a premium of 5.97 per cent.
The cross deals as well as the negotiated deals reported on the BSE also proves that these rumours were baseless. On the BSE, about 3 bulk deals were reported and two cross deals of 10,000 shares each at a price of Rs 117 and Rs 124, respectively. Similarly, on the negotiated segment, a deal of 19,200 shares was reported at a price of Rs 120.
Interestingly, while the stock was traded at an average price of Rs 121.39 on the NSE and Rs 121.26 on the BSE, the stock shot up during the last phase to touch an intra-day's high of Rs 127.50 on the NSE, a gain of 5.94 per cent. Another prominent feature was the sudden price discrepancy which emerged between the two exchanges leaving enough scope for arbitrageurs. While on the BSE, the stock closed at Rs 126.80, the stock closed at Rs 127.35 on the NSE. The volumes at the counter also shot up simultaneously.
The counter clocked a phenomenal volume of over 1.98 crore shares and 1.21 crore shares on NSE and BSE. Accordingto market sources, rumours of FIIs led by Morgan Stanley and HSBC placing huge buy orders also stregthened the speculators' grip over the counter.
It may be recalled that a similar rumour on November 6, the last day of the trading cycle on BSE came as a blessing in disguise for Reliance, when the stock shot up to Rs 119 from Rs 111 levels and emerged as the top traded stock on the local bourses after a gap of over a month.
Sources hint that on November 6, a rumour of an FII having received a mandate to buy about 27 lakh shares of Reliance led to the rally on the local bourses. It should also be recalled that the stock was then quoting at a discount to its GDR at around $ 5.65 levels.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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