Who's Afraid of Hindenburg Research? (with due apologies to Edward Albee). If the upswing in the indices is anything to go by, it seems nobody in the Indian markets was bothered by the latest tranche of 'revelations' from the US-based short seller.
Expecting another round of bloodbath that markets witnessed when it released its first report, the short seller released another report. But that has been spurned by the market participants.
We may see more allegations from Hindenburg. The target then may not be Adani or the Sebi chief. We should not forget that other short-selling specialists dream of causing devastation in the Indian markets itself.
Muddy Waters saga
Short sellers may even target such full Indian businessmen who run their enterprises outside the country. Just like Hindenburg, US-based Muddy Waters Research had also raised serious allegations in February against Fairfax Financial Holdings. Called the "Canadian Warren Buffett," Indian-Canadian billionaire businessman Prem Watsa is the founder, chairman and chief executive of Fairfax.
The MNC was accused of cooking books to show higher profits. The company, which had investments in Kerala-based CSB (formerly Catholic Syrian Bank), did not pay any heed to the 'revelations.' None of the allegations were proven right.
Challenges, opportunities
From an investor's perspective, the best plan is to invest in stocks that show a clear growth trajectory. That will help one find opportunities even in such challenging circumstances. There is no dearth of such strong scrips in the market. The market finds its footing in challenging times on such stocks.
Despite the initial turbulence caused by Hindenburg's latest report, markets regained their position to cut back losses. The week ended on the positive territory. Sensex rose 1,331 points to 80,436, while Nifty climbed 397 points to reach 24,541.
The tailwinds from the global markets, especially from the US and Japanese markets, helped the Indian upswing. The possibility of an imminent rate cut by the US Fed Reserve and the resolution of the confusion over yen carry trade (selling the yen to fund the purchase of higher-yielding currencies or securities) are positive signals.
Another development is the decrease in the dollar index. The weakening of the greenback will make wealth acquisition more attractive for foreign investors.
Increased investor interest in stocks that have the potential to grow is also seen as another positive.
Nifty likely to gain
Since Nifty closed above the 24,500-mark, it may further climb this week. But breaking beyond 24,800-24,900 levels might be tough. On the flip side, if goes on a downward spiral, Nifty may close at 24,200-24,100 levels. But then that would help investors fish for good stocks at the lower price range.
Dividends and ex-dates
This is the time of dividends. Following are the ex-dates of some of the companies in the coming days. (Ex-date refers to the date when a scrip begins trading without the entitlement to dividends).
August 19
Reliance Industries (100%)
August 20
Balakrishna Industries (200%), South Indian Bank (30%)
August 21
Engineers India (20%), Hindustan Aeronautics (260%)
August 22
IRFC (7%); Jindal Steel (200%)
August 23
ABB (533%); Federal Bank (60%); ONGC (50%); Natco Pharma (150%); LIC Housing (450%); IRCTC (200%); Power Finance Corporation (32.5%)
