www.rupeedesk.in
Stocks of the three state-owned oil marketing companies are seen tracking the rupee-dollar movement next week but are broadly seen positive after having lost significantly in the last two weeks. Stocks of Cairn India will be in focus in the coming sessions as the company will decide on a share buyback proposal which is seen providing key support to the stock. The rupee has weakened against the US dollar in the last few sessions but most of that is already factored in the stocks and if the Indian currency doesn't fall below 63.50-for-a-dollar level, the stocks will not be badly hit. Also, globally crude prices have hardened in the last few days which weighed on the stocks of the three companies--Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd.
Oil minister Veerappa Moily's recent statement that the government is working towards deregulating diesel prices within six months is likely to provide some support to these stocks. The monthly 50 paise hike in the fuel is due next week and if undertaken will give some sentimental boost to the companies' stocks. Also, the government has announced substantial subsidy contribution to these companies eliminating almost the entire revenue loss on regulated fuels incurred during the first half of the current financial year. When the government makes the actual monetary payment to these companies, their finances will get a significant boost by reducing their debt levels and hence interest payouts.
OMCs (oil marketing companies) fundamentals see some improvement as government cash compensation accrues regularly. Debt levels (and hence interest cost) of all the three OMCs reduced in H1FY14 (Apr-Sep). While not many in the market are banking on a diesel price deregulation, most are confident that losses incurred on selling the fuel will decline substantial by the end of the current financial year. On the other hand, Cairn India yesterday informed exchanges that its board will meet Tuesday to take a call on a share buyback proposal.
Stocks of the three state-owned oil marketing companies are seen tracking the rupee-dollar movement next week but are broadly seen positive after having lost significantly in the last two weeks. Stocks of Cairn India will be in focus in the coming sessions as the company will decide on a share buyback proposal which is seen providing key support to the stock. The rupee has weakened against the US dollar in the last few sessions but most of that is already factored in the stocks and if the Indian currency doesn't fall below 63.50-for-a-dollar level, the stocks will not be badly hit. Also, globally crude prices have hardened in the last few days which weighed on the stocks of the three companies--Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd.
Oil minister Veerappa Moily's recent statement that the government is working towards deregulating diesel prices within six months is likely to provide some support to these stocks. The monthly 50 paise hike in the fuel is due next week and if undertaken will give some sentimental boost to the companies' stocks. Also, the government has announced substantial subsidy contribution to these companies eliminating almost the entire revenue loss on regulated fuels incurred during the first half of the current financial year. When the government makes the actual monetary payment to these companies, their finances will get a significant boost by reducing their debt levels and hence interest payouts.
OMCs (oil marketing companies) fundamentals see some improvement as government cash compensation accrues regularly. Debt levels (and hence interest cost) of all the three OMCs reduced in H1FY14 (Apr-Sep). While not many in the market are banking on a diesel price deregulation, most are confident that losses incurred on selling the fuel will decline substantial by the end of the current financial year. On the other hand, Cairn India yesterday informed exchanges that its board will meet Tuesday to take a call on a share buyback proposal.
