Indian indices continued their northward march on buying interest in heavy weights over the previous two hours of trade. Stocks from realty and consumer durable space are trading firm while IT stocks are trading weak.
The BSE-Sensex is up 119 points while NSE-Nifty is trading 31 points above the dotted line. BSE Midcap is trading up by 1.0 % while BSE Small cap index is trading 1.2% above yesterday’s closing. The rupee is trading at 44.82 to the US dollar.
Telecom stocks are trading firm led by Reliance Communication (RCOM) and Tata Teleservices (Mah). The biggest gainer on the bourses is RCOM. This is thanks to reports that the company can restart providing video calls in the New Year as part of its 3G services. As per a leading financial daily, the government has reportedly approved telecom operator’s video call facility after it received an undertaking by operators that they will start providing real time interceptions of video calls within the next six months. It may be noted that video calls are interactive calls where the callers can view each another on mobile phones or computer displays.
Earlier this month, department of telecom had issued a noticed to RCOM, Tata Teleservices and Bharti Airtel, directing them not to launch any 3G services which does not enable spying by security agencies on a real time basis. However, the operators had indicated that providing real time data to securities agencies was not technically possible. With the government’s approval now, the main beneficiaries will be RCOM and Tata Teleservices who have already launched their 3G services. Bharti Airtel, Vodafone-Essar and Idea Cellular, all of whom plan to roll out such services shortly, will also benefit.
Construction stocks are trading firm led by Unity Infraprojects and JP Associates. The road transport ministry is looking to award approximately 25 projects worth Rs 360 bn in the first two months of next year itself. About 13 proposals have already been sent to the appraisal committee while another 14 will be sent for approval next month. Out of the 13 proposals, six of them are in Madhya Pradesh while others will come up in Maharashtra, Gujarat, Rajasthan and Tamil Nadu. Huge tendering activity in the next year is likely to throw up enormous opportunities for companies in the road EPC and BOT space like IVRCL, Nagarjuna Construction and Hind. Construction.
However, what remains to be seen is how soon these projects are executed. It may be noted that despite setting up an ambitious target to make 20 kms of highway each day, the road ministry has failed miserably on the implementation front. This is mainly due to various procedural and bureaucratic delays. Nonetheless, in order to avoid such delays, the ministry has formed a cost committee and tweaked land acquisition norms. Hopefully, this will have some impact and improve the situation going forward.