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Journalism of Courage
Investors are rejoicing over the settlement in the Reliance group. Now that the battle between the brothers is over, investors and dealers expect the market and Reliance stocks to remain in bull territory in the coming days. Anticipating a settlement, the RIL stock has already touched the 52-week high of Rs 600 on Friday. ‘‘I think the share price of both companies (RIL and REL) will cross Rs 1,000 within a year,’’ says investor Pawan Dharnidharka. ‘‘The monsoon is also here. There is no bad news now to stop the Sensex from touching 7,000 on Monday,’’ he predicts.
Says Ambarish Baliga, vice-president, Karvy Stockbroking Ltd: “Now with this settlement the situation will change; fundamentals will take the front seat. Monday should see a good response to these shares. The last ten days saw good buying in Reliance, with media reports on the proposed settlement.”
‘‘The overall response from the market is very positive. The impact cannot be quantified yet as the market is waiting to watch the details of the transaction between the brothers. The only question of negativity will arise if the market does not welcome the details of the deals,” said Deven Choksey, Director, KR Choksey Securities. “The management of Reliance is very conscious of their stock valuation as they will be be careful not to bring any news that should bring a negative impact,” said Choksey.
In the long-term — around the end of the year — the Reliance share should float around Rs 720-750, said a dealer. However on an optimistic note, Gagan Banga of Indiabulls Financial Services Ltd, said: “I think the Sensex will touch the 7,000-mark now and also go beyond that. The reports about the settlement in the Reliance group will certainly give a boost to the upward march of the Sensex. Also, the monsoons in Mumbai will give a fresh fillip to the market sentiment.”
“It is good for the markets that the uncertainty has been sorted out amicably without litigation. This will also be a trigger for re-rating of the group and would unlock value for shareholders,” said Abhay Aima of HDFC Bank.
