X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Accounting practices cast shadow - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Feb 16, 2002

    Accounting practices cast shadow

    Lingering fears of improper accounting practices continued to worry the US markets. Dismal earnings report from corporates and unimpressive economic data further contributed to cautious sentiment. Fears of possible attacks on the US also kept the markets under pressure.

    The week began with Nortelís warning of lower revenue growth in the coming quarters. Its CEO has been allegedly trading in the companyís stock. IBM also came under scrutiny on suspicions that the company had not disclosed US$ 300 m gains on the sale of an optical unit. It was this gain, which enabled IBM meet fourth quarter earnings estimate. Dell, the No. 1 PC maker, reported a YoY 7% fall in fourth quarter revenues and a 10% decline in earnings. The company expects industry wide shipments to drop by 10% sequentially in the current quarter and a 3% - 5% fall in its revenues.

    Positive news from Applied Material and Hewlett Packard (HP) failed to cheer the markets. Applied Materials indicated that semiconductor revenues have reached a bottom and memory chips prices have risen. HP also reported better than expected earnings in the fourth quarter.

    Economic data offered little relief to the markets. Output at the US factories fell by 0.1% in January its sixth straight drop. Capacity utilization at 74.2% was also the lowest since April 1983. After four consecutive month of rise, consumer sentiment index too fell to 90.9 in February (month to data) from 93 in January. This dismal data raised concerns about the expected revival in the economy. Upbeat sales report (gains of 1.2% in January 2001), fall in jobless claims and decline in US business inventories, for the 11th straight month raised hopes of an improvement in labour market conditions and consumer demand.

    ICICI group leads the pack
    Price in $) 9-Feb-02 16-Feb-02 Change
    ICICI Bank 4.1 6.3 52.4%
    ICICI 5.6 7.6 36.0%
    Silverline 2.3 2.7 15.2%
    MTNL 6.6 7.4 12.1%
    VSNL 6.6 7.3 10.5%
    Wipro 35.0 36.0 2.9%
    HDFC Bank 15.1 15.5 2.4%
    Rediff 1.3 1.3 2.3%
    Satyam 13.0 13.1 0.2%
    Satyam Infoway 1.9 1.9 0.0%
    Infosys 57.7 56.5 -2.1%
    Dr. Reddy's 21.0 20.0 -4.8%

    Indian ADRs outperformed the US markets and flared up sharply. ICICI group and PSU telecom stocks were in demand. Frontline tech stocks in general remained under pressure in line with the NASDAQ trend.

    The rally in ICICI group was sparked on speculations that ICICI would be selling its stake in the proposed special purpose vehicle (SPV) to be set up consequent to its merger with ICICI Bank. The SPV will hold ICICI's stake of 16% in the merged entity. The stake sale is expected to bring in Rs 12 bn to the financial institution, which it could utilize in writing off bad loans. Also, expectations about increase in foreign investment limit in the banking sector from the current 49% to 74% infused buying interest. Foreign investments in ICICI and ICICI Bank currently stand at 48% and 45% respectively.

    After VSNLís disinvesment to the Tataís, investors turned positive about MTNL. Although, the government has indicated to sell part of its stake in MTNL, it is yet to indicate a time frame for the disinvestment.

    Asian markets rebound
    Indices 9-Feb-02 16-Feb-02 Change
    Hang Seng 10,519 10,962 4.2%
    Nikkei 9,686 10,048 3.7%
    BSE 3,494 3,602 3.1%
    Dow 9,744 9,903 1.6%
    FTSE 5,128 5,183 1.1%
    Dax 4,836 4,863 0.6%
    NASDAQ 1,819 1,805 -0.8%

    The sentiment on the Wall Street is mired by worries about potential accounting blow-ups. Mixed news from economy is further confusing the markets, which are waiting for a revival in the economy.

     

     

    Equitymaster requests your view! Post a comment on "Accounting practices cast shadow". Click here!

      
     

    More Views on News

    How to Ride Alongside India's Best Fund Managers (The 5 Minute Wrapup)

    Jun 10, 2017

    Forty Indian investing gurus, as worthy of imitation as the legendary Peter Lynch, can help you get rich in the stock market.

    Deep State First (Vivek Kaul's Diary)

    Aug 23, 2017

    Nowhere was the darkness deeper than in the nation's capital. There, no light shone. No flicker of awareness...observation...learning...or reflection appeared.

    Why Hasn't Warren Buffett Rung the Bell Yet? (The 5 Minute Wrapup)

    Aug 22, 2017

    It's surprising Warren Buffett hasn't warned investors about the expensive stock market? Let us know why.

    Think Twice Before You Keep Money In A Savings Bank Account (Outside View)

    Aug 22, 2017

    Post demonetisation, a cut in bank savings deposits rates was in the offing.

    A Darkness Is Spreading Across the US (Vivek Kaul's Diary)

    Aug 22, 2017

    Today, we are attacked by one preposterous thing after another, each of them even more absurd than the last.

    More Views on News

    Most Popular

    This Small Cap Can Drive Chinese Players Out of India (and Make a Fortune in the Process)(The 5 Minute Wrapup)

    Aug 17, 2017

    A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.

    The Most Important Innovation in Finance Since Gold Coins(Vivek Kaul's Diary)

    Aug 10, 2017

    Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.

    It's the Best Time to Buy IT Stocks(Daily Profit Hunter)

    Aug 16, 2017

    The IT Sector could be in an uptrend till February 2019. Are you prepared to ride the trend?

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    S&P BSE SENSEX


    Aug 23, 2017 01:50 PM

    S&P BSE SENSEX 5-YR ANALYSIS

    COMPARE COMPANY

    MARKET STATS