Rediff in focus - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Rediff in focus

Mar 24, 2001

The sun came out on the US markets after a dismal week. The NASDAQ gained 2% over a week. Tech stocks rose strongly pushing the NASDAQ and Dow away from bear market territory. Optimism in the markets seems to be on an upswing on bargain hunting by investor in frontline tech stocks. Early during the week, the Fed Chairman disappointed the markets by announcing a cut of 50 basis points in interest rates. The investors were expecting a reduction of 75 basis points, which led to a wide spread sell off in the markets. The Fed has cut interest rates three times in 2001, to fuel the slowing economic growth by lowering borrowing costs for the companies.

The surprise rise in inflation figures further dampened investor hopes for a near term interest rate cut by the Fed. Consumer Price Index (CPI) in February grew 0.3% exceeding an expected rise of 0.2%. The core CPI rate (excluding food and energy prices) also rose 0.3%.

The spate of earning warnings continued this week. 3Com Corp. (networking equipment maker) reported a loss, which was higher than expected on the back of downturn in the telecom sector. Corning too trimmed its 2001 earnings outlook and forecasted lower sale growth. Motorola announced slashing off further 4,000 jobs (so far it has announced 22,000 job cuts) because of the slowing US economy.

Rediff gains
(Price in $)17-Mar-0124-Mar-01Change
Rediff3.13.36.1%
Satyam Infoway3.03.14.2%
VSNL12.512.2-2.2%
Silverline4.03.9-2.7%
ICICI Bank7.26.9-3.6%
Infosys71.068.3-3.9%
ICICI11.711.1-5.1%
Wipro36.331.6-12.8%

Indian ADRs continued their downward journey even as the overall markets got a lift. Save for the Internet stocks Rediff and Sify, the ADRs witnessed a large sell-off.

Rediff was up by more than 6% over a week. This was on its announcement to acquire the two US based companies, Value Communication Corporation and India Abroad Publication. It has also decided to make a strategic investment in Apnaloan.com India Pvt. Ltd. These acquisitions are expected to consolidate its leadership position and would help the company in diversifying its revenues streams. Value Communication Corp. has a user base of about 45,000 with revenues of over US $13 m. The company focuses on the Internet based marketing of international phone services to the Indians in the US. On the other hand India Abroad Publications has a circulation base of about 65,000 with revenues base of US $ 7 m.

Wipro was the major loser. This was after a downgrade rating by several foreign broking houses on the tech sector. The company is now trading at a discount of 23% compared to its issue price and a marginal premium of 5% compared to domestic price.

The mixed trend in the markets illustrates that the worries are not yet solved. Earnings outlook for the next six months is cloudy and investors have a little faith in the policy makers to cut rates aggressively. Also, the slowing Asian markets might affect profits of the US companies.

Nikkei stands out
Indices17-Mar-0124-Mar-01Change
NASDAQ1,8911,9292.0%
Dow9,8239,505-3.2%
Hang Seng13,52212,583-6.9%
Nikkei12,23313,2158.0%
BSE3,7463,635-2.9%

Equitymaster requests your view! Post a comment on "Rediff in focus". Click here!

  

More Views on News

5 Indian Companies Embracing Blockchain Technology (Views On News)

Nov 23, 2021

Blockchain adoption in India was slow in the past. Now, the technology is being well received.

CAREER POINT 2020-21 Annual Report Analysis (Annual Result Update)

Nov 22, 2021 | Updated on Nov 22, 2021

Here's an analysis of the annual report of CAREER POINT for 2020-21. It includes a full income statement, balance sheet and cash flow analysis of CAREER POINT. Also includes updates on the valuation of CAREER POINT.

ANTONY WASTE HANDLING 2020-21 Annual Report Analysis (Annual Result Update)

Nov 22, 2021 | Updated on Nov 22, 2021

Here's an analysis of the annual report of ANTONY WASTE HANDLING for 2020-21. It includes a full income statement, balance sheet and cash flow analysis of ANTONY WASTE HANDLING. Also includes updates on the valuation of ANTONY WASTE HANDLING.

Top Performing Sectors in 2021 (Views On News)

Aug 10, 2021

A look at this year's best performing sectors and what has helped them rally.

Nazara Technologies IPO: Should You Apply? (IPO)

Mar 17, 2021

Should you bet on this gaming company backed by ace investor Rakesh Jhunjhunwala?

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

India's Top 5 Monopoly Stocks to Watch Out for (Views On News)

Nov 30, 2021

These 5 companies dominate their sectors with a huge piece of the pie.

The Biggest Winners and Losers in India's Transition to Electric Vehicles (Profit Hunter)

Nov 26, 2021

How India's EV transition could be a major headwind for the incumbents.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

5-YR ANALYSIS

COMPARE COMPANY

MARKET STATS