Heard on the street

FIIs, bulls place faith in Titan despite gold rush Shares of Titan, a leading watches and jewellery retailer, have not reacted much to the sharp jump in gold prices in recent months. With gold prices rising roughly 40% in the last six months, and demand for consumer products seen dipping sharply due to job and salary cuts amid the economic slowdown, a section of the market has turned apprehensive about the prospect of the stock in the near term. While some in the market have been arguing that gold has a traditional market in India, there is a feeling that its demand as an investment destination will only wane further if prices of the yellow market rise further. Such concerns did not seem to have reflected on the stand of foreign institutions in the stock at least till December 2008, as their total shareholding rose to 12.20% from 11.88% in the September quarter. A broker, who tracks the stock, said the company still has supporters because of its lower debt levels and the fact that the ‘Rare’ing Bull still holds a significant stake. Smelting co struggles to win over investors The going seems to be tough for a few companies that are trying to raise capital by way of fixed deposits. While frontline companies — that are much sought after by investors — are rolling back interest rates of corporate FD schemes, a few companies, troubled by low investor confidence, are trying to attract investors into their schemes by increasing coupon rates on their issuance. According to distributors, a Mumbai-based smelting and stainless steel manufacturing company is trying hard to raise money from investors, but with little luck so far. The company, promoted by a traditional business family, is offering investors coupon rates in the range of 12-13 %. Though the offering looks great, none of the top distributors are accepting money on behalf of the company fearing default. “The said company is ready to offer 4-5 % as brokerage commission, taking the total cost of borrowing to around 16-17 %; but from what we understand, the company is desperate trying to raise funds as they have had no luck with the banks. We could probably be staring at a default scenario in the case of this company,” said a Mumbai-based distributor.
Source: ET