Heard on the street
Tata Steel investors strike swap deals
To make money in the market, you need to have the sight of an eagle. A batch of well-informed investors have begun selling shares of Tata Steel in sizeable numbers.
According to brokers, these investors are engaged in swapping Tata Steel shares with the steel-maker’s quasi security paper. The method is simple: Investor A sells shares of Tata Steel, currently priced at Rs 817.8, and buys Tata Steel CCPS (cumulative convertible preference shares), which are currently priced at Rs 116.3. Six CCPS or ‘Tata paper’ (as they are called in the market) of the face value of Rs 100 each would be automatically converted into one equity share on September 1, 2009. “Investors who think Tata Steel prices would not have any significant appreciation in the months to come are resorting to swap their shares.
By doing so, investors would be able to exit Tata Steel on a higher price and re-enter at lower market price. The swap helps the investor to make a straight profit of about Rs 120 on one CCPS (or future Tata Steel share) bought,” dealers say. Tata Steel ended on the bourses 2% higher at Rs 818 while the price of Tata CCPS (paper) remained unchanged at Rs 116 on the BSE on Tuesday.
Buyback buzz peps up Sharp
Shares of Sharp India have been soaring on market talk that the company may soon announce a buyback of shares as a step towards ultimate delisting of the company. When contacted Daisuke Koshima, corporate director, group general manager of International Business Group of Sharp denied any such move.
“There are no plans to delist the company,” he told ET. The shares, which closed at Rs 48, have risen 15% over the last one week. Sharp
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