A note of caution

`Beware investors or you will be caught on the wrong foot,' says the head of the research unit of a leading FII brokerage house. A similar caution note seems to be on its way from the Sebi office as well. `First it was granite, then finance companies, followed by aqua culture, steel and now its info-tech companies. Caution seems to be based on the sharp spurt witnessed at the counters of over 50 B2 group stocks which are hitting the upper band of the price filter on a daily basis. While a section of the market was convinced of the `bull theory' the other few strongly believed that the spurt had been on account of speculative interests which could fall at any given point in the absence of adequate institutional support. The mind boggling jump in the stock prices of Videocon International, Paper Products, Vindya Telelinks, Southern Herbal and VXL Instruments according to a section of brokers was purely on account of the game plan of a select operators. The 150 point fallon Wednesday and the subsequent plunge in the stock prices of many of the B group stocks threw light on this aspect as well.

FII & institutional deals

FII deals were reported at the counters of Gail, Pentafour Software, Larsen, Telco, Bata (India), Infosys Technologies and Aurobindo Pharma. Domestic institutions were rumoured to have placed huge buy orders at the counters of TVS Suzuki and Visual Software. Credit Lyonnais reported a huge deal of over 5.40 lakh shares at the counter of Kesoram Industries. Capital International is rumoured to have sold HPCL, Satyam Computers and HCL-Infosystems. WI Carr is rumoured to have sold 35,000 shares of Hindalco. Morgan Stanley is rumoured to have bought 4-5 lakhs of Telco and has been acquiring this stock over the last few trading sessions. An FII is rumoured to have bought 40,000 shares of Visual Software. UTI is believed to have bought 45,000 shares of NIIT and Infosys. The offshore fund of Canbank is rumoured to have bought Bata India andNIIT.

Operators' target

Market grapevine has it that operators are targetting Telco in a big way. ``It seems that Telco will post very good numbers in the next month. The market feels that the schedule rolled out by Telco for the current year (1999-2000) is extremely good and on the whole the company has kept aggressive tragets of increasing production by around 50 per cent over the previuos year. This is driving the stock", said an analyst.

A fresh coating

The stock of this company has moved from Rs 50 a few months ago to touch the upper circuit today at Rs 76. ``The performance of this company both in terms of growth in profits and sales, as compared to its competitors Asian Paints and Goodlass Nerolac, is commendable. The merger of the company with Rajdoot Paints is giving the company economies of scale, a good size and reduction in cost of operations.