Tuesday, March 23, 2010

Demerger of Regional channel from ZEE News

Regional channels are getting demerged from zee news and the same is getting mergered with zee tele.

The ratio of merger with zee is 19 : 4 ie the shareholer of Zee news will get 4 shares of Zee tele also he will own the shares of zee news which will have news channel in it.

I expect the base valuation of zee news after demerger to be Rs 20/-. Also the demerger date will be announced soon as the scheme is sanctioned by various courts.

There is an arbitrage opportunity between Zeenews & Zeetele as you can buy zee news befor bookclosure & sell zee tele futures.

Buy ZEE News                 6650           62.50              415625
Sell ZEE tele futures         -1400         265.00             371000

Residual cost of ZEE news   6650                               44625
ie cost of each share is RS 6.72

and I value Zee news post demerger at Rs 20 /-

Tuesday, March 16, 2010

Listing of NSE S&P Index Option on SGX

The Exchange & SEBI is gung-ho about its turnover being migrated to SGX NIFTY, It also understand that SGX nifty is the driver for opening prices on India Stock Exchange. In order to avoid price discovery being migrated overseas, SEBI mulled opening Equity markets one hour earlier.

But on other hand NSE entered into alliance with singapore stock exchange to list other india dominated index Futures & Options on SGX.

The paper said that it may list S&P Index in India, but it failed to report of NSE option listing on SGX, Also NSE press release used proper words to hide this development.

NSE knows very well that once the Nifty options are listed on SGX, FII positions on Nifty options will move to singapore, only big money will be able to earn from spreads between Nifty options & SGX nifty options. maybe foriegn money will help in better price discovery and maybe FII will have better say in market.

The volumes on Indian equities may shink & Once again NSE will increase the timing at 9 to 5.

Is this a strategy of NSE to diversify / derisk its volumes, as there is growing competition among exchanges in India specially when MCX is launching its own exchange.

No matter if the volumes gets diverted, NSE will earn fees from licensing, but what we will lose is volume &
government will lose STT. but FII would be invested in India dominated products only.