Unattractive buyback prices may see Bombay Dy(e)ing

All the buying efforts at the Zee Telefilms counter on Wednesday was neutralised by Thursday’s wave of speculative unwinding. Cap-It-All and Open Hammer have been the staunchest proponents of the stock in recent times, even as the latest earnings number from the media major have failed to impress many.

On Wednesday, close to 1 million shares are reported to have been picked up with Open Hammer believed to be the prominent buyer. Going by the pattern of institutional activity over the last one month, most fund managers seem to be on the look out for panic situations so as to spot bargains.

Current showing
Jordan Flaming broking is reported to have been the prominent seller at the Reliance Industries counter as the scrip came in for some harsh treatment today. The stock had been rated as a market performer by Golden Socks just a few days back.

Close to half a million shares are reported to have been offloaded today with the CREEPS fund also believed to be among the sellers.

Close to 2 lakh shares of L&T are reported to have been offloaded at the L&T counter with fingers pointing at the Prudent Fund. Bargain hunters flocked to the MTNL counter today as the selling fury witnessed over the past few trading sessions appears to have died down. Meanwhile Golden Socks, one of the prominent supporters of the stock has upgraded its rating on the stock on prospects of better earnings growth. As they say, when valuations become attractive, stories arise on their own.

Defensives found takers today even as uncertainty seems to be the only certainty till July 2. FMCG majors HLL and Colgate returned to the pavilion unscathed although the trading volumes certainly did not appear impressive. It looked as if the scrips were saved by lack of selling pressure rather than buying interest.

In the news
The much awaited buy back at the Bombay Dyeing counter finally came through today even as punters had a field day at the counter today. Judging by the huge volumes and considering the fact that the buy back price is just about Rs 10 higher than today’s closing, the rally is likely to run out of steam. However, no such frenzy was seen at the Britannia counter on the eve of the announcement. While volumes today were slightly better than average, it appears fund managers are not yet ready to book profits.

A defensive play, the stock is favoured more by conservative fund managers than the ordinary investor.
Considering that the company has offered to buy back 1 million shares, and that too at a decent premium to the market price, the fund managers who stood by the stock can look forward to the rewards shortly.
And that includes the Savvy Fund Manager too, who was seen mopping up Britannia shares not long back.

-- Santosh Nair, santoshnair@myiris.com