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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (4750)	6/27/1999 8:53:00 PM
From: Mohan Marette	Respond to of 12475

VSNL gets ready for Nasdaq listing. Website. vsnl.net.in Videsh Sanchar Nigam Ltd gets ready to get listed on Nasdaq (Monday, June 28, 1999-Business Standard) Salil J Panchal & Baiju Kalesh in Mumbai Videsh Sanchar Nigam Ltd (VSNL) is planning to become the first public sector undertaking to become listed in one of the major US stock exchanges, possibly Nasdaq. As part of the process, it has decided to follow the Generally Accepted Accounting Practices (GAAP) for auditing its 1999-2000 accounts. The disclosure practices will also be altered to meet the Securities and Exchange Commission requirements. “We are preparing for getting listed on the US stock exchange. We have held initial internal meetings on this,” officials said. By listing on Nasdaq, the company will be able to offer more value to its shareholders, the officials said. The company will be calling bids from international merchant bankers for dealing with the issue in the second half of current fiscal. While the government holds 54 per cent, 30 per cent is held by foreign institutional investors and the rest by domestic institutions and the public. VSNL feels the price for its shares quoted on the Indian stock market is not reflecting the intrinsic worth of the company. The telecom major with a capital reserve of around Rs 2,200 crore is targetting a growth of 18 per cent in its core business of international telephony during the current fiscal. It has already achieved around 18 per cent growth in the first quarter. The company, in its plan for the 1998-99 to 2002 period, has reserved around Rs 5,000-Rs 7,000 crore for its capital expenditure plan. It has decided to invest 45 per cent of the funds on expansion, 20-25 per cent on diversification into value-added services and balance for investing in future technologies and new oppurtunities in the domestic and developing markets. It is planning to invest more in cables, gateways, earthstations, interstat, Imarsat and Project Oxygen. On divesrification, sources said it has identified growth potential value added E-Commerce, internet and providing transponders. The company has already signed a Memorandum of Understanding with the Mahanagar Telephone Nigam Ltd (MTNL) for investing in opportunities in developing countries. While VSNL will take care o international telephony, the domestic services will be handled by MTNL. One of the first telecom companies which got itself listed at the Nasdaq - Infosys Technologies - has witnessed strong trading interest. The Infosys ADR was by the end of last week quoted at $ 58.56, recording a premium of 46.6 per cent over the underlying share price of Rs 3455 at the Bombay Stock Exchange.

To: Mohan Marette who wrote (4750)	6/27/1999 9:42:00 PM
From: Mohan Marette	Read Replies (1) \| Respond to of 12475

Turnaround in cyclicals to continue-'Experts'. Turnaround in cyclicals scrips set to continue; stocks still cheap considering expected rise in Q1 earnings (Monday, June 28, 1999-Business Standard) Pradipta Bagchi in Mumbai Is there life left in the cyclical rally? Is the value hunting over? The recent spate of profit booking in bluechip cyclical stocks like Larsen & Toubro(http://www.larsentoubro.com/), Reliance Industries (http://www.ril.com/), Grasim adityabirla.com, Hindalco (http://www.adityabirla.com/companies/hindalco.html) and Indian Rayon (http://www.adityabirla.com/companies/indrayon.html), which had risen by between 70 and 100 per cent in the rally since April, has left investors wondering whether the fancy for such stocks has peaked. Market experts, however, believe there is a long way to go and the cyclicals have merely paused for a breather to consolidate. One research study by a large brokerage house found that the rally in cyclicals is in no way over. For the study, the brokerage looked at the market by splitting the listed firms into two segments; one that constitutes stocks belonging to the information technology, consumer goods and pharmaceutical stocks (CIP) and another which has everything else like cyclicals, banks, utilities and telecom (non-CIP). For this, the study tracked the historical price earnings ratios of the two sectors with their present valuations. While the CIP index currently trades at 39 times of its one-year forward earnings, the non-CIP stocks trade at only seven times of the forward earnings despite the steep rise in prices in the last 10 weeks. Analysts compare these numbers to the five-year PE average of these sectors and point out that while the CIP PE is 32, the non-CIP PE is 11. This shows that even on the basis of the experience of the past five years, the cyclical stocks remain clearly undervalued. Another reason for the rally to continue is that so far the cyclical stocks have risen because of value hunting by investors, but they are still cheap considering the increase in earnings these companies are poised to show in the first quarter this year. "The next phase of the rally in cyclicals will be dictated by earnings growth the companies post. While these stocks have risen from the rock-bottom valuations, they will undervalued when they post higher-than-expected numbers," says a strategist at a large brokerage house. Analysts estimate that earnings of companies engaged in cyclicals businesses like petrochemicals, cement, paper and aluminium will post higher top and bottom line figure in July. "If that happens, these stocks will seem undervalued again," he adds. The Bombay Stock Exchange sensitive index has been driven by the CIP firms which comprise 55 per cent of the weightage over the past two years. But it could be the non-CIP companies, comprising 45 per cent of the sensex, that might take the index beyond its historical highs in the next two years.