.: Technical view by Nooresh on Sensex/Stocks/Commodities

Friday, 6 June 2014

Technical view by Nooresh on Sensex/Stocks/Commodities

L&T Finance Holdings – Kudos to SEBI for catching the Hedge Fund for Insider Trading

Posted: 06 Jun 2014 12:32 AM PDT

We had posted this article on how there was some rampant insider trading and something fishy in the L&T Finance Holdings inclusion in derivatives and timing of the OFS

This is the link to that article posted on 14th March

http://www.nooreshtech.co.in/2014/03/lt-finance-holdings-inclusion-into-futures-and-ofs-something-fishy.html

This is what we had written

-> Stock included into FNO on 11 March with effect from 13th March. ( NSE has never done a mid contract inclusion and such a quick effect i suppose )

-> Stock rises up the next day from 81 to 86.

-> The stock traded 3 cr shares yesterday with around 32% delivery marked. Around 1 crore shares delivery.

-> With no dividend or any other corporate action the stock was at a 5% or higher discount to the spot price in futures.

-> Yesterday in the evening company declares an OFS

http://www.bseindia.com/corporates/anndet_new.aspx?newsid=07289df6-d6bb-4dd5-9b3b-d1a6550e580f with a Floor Price of Rs 70.

-> The Open Interest is around 2.47 cr.

The sequence of events is very fishy.

Why did the stock quote at a 5% discount yesterday. Somebody had knowledge about the OFS and sold a good chunk in futures. Today the discount will reduce and so will the price.

A good 1 cr shares got sold off yesterday and a bigger chunk in Futures. The same will get covered today through the OFS of 5-8 cr shares. Somebody could have made a real chunk of money by knowing the above sequence of events stinks