Talks follow rejection of ChemChina's $3 billion bid
United Phosphorus (UPL), the country's largest crop protection company, is set to bid for Australia’s largest agriculture chemical company, Nufarm.
Sources close to the development said the Mumbai-based Shroff-family, promoters of UPL, has started discussions with the Australian firm's management.
The development follows Nufarm ending talks for a $3 billion bid with a consortium led by China National Chemical Corp (ChemChina), which includes private equity firm Blackstone.
UPL, which ranks among the top five crop protection companies in the world, has been keen on taking over a foreign giant after its abortive attempt to acquire Japan’s Arysta LifeScience Corporation.
A banker in the know of the development said the discussions are at the initial stages.
Global crop protection giants like Syngenta, Makhteshim Agan, and Monsanto might also spring surprise bids for Nufarm, the banker said. He also did not rule out the possibility of a revival of talks between Chemchina and Nufarm.
The Nufarm stock today rose by more than two per cent after ChemChina said it “was still considering possible acquisition of Nufarm.”
This announcement is contrary to Nufarm’s statement on Monday, according to which the ChemChina consortium had said it was unable to formalise its proposal by a deadline, which ended on Sunday.
Sources are of the opinion that UPL will rope in a private equity fund if it puts in a financial bid for Nufarm.
Apart from Blackstone, the ChemChina consortium includes private equity firm Fox Paine Management.
The consortium proposed to offer $17.25 cash per share and a pre-acquisition dividend of 30 cents per share.
Nufarm had said last week it had received approaches from parties interested in the company since the Chinese-led consortium proposed a takeover.
Source - Business Standard
Understanding Short Term Trading
Before I begin, this blog is not for intraday traders. My definition of short term implies duration of around 2 to 3 months.
Short Term stock picking is no rocket science, but rather a visual interpretation of technical charts. A basic moving average on a time frame chart will show the direction of the securities movement.
Moving averages is a mathematical results calculated by averaging a number of past data points. Moving averages (MA) in it's basic form is calculated by taking the arithmetic mean of a given set of values on a rolling window of timeframe. Once the value of MA has been calculated, they are plotted onto a chart and then connected to create a moving average line. Typical moving averages used for short term trading are 50 MA and 100 MA.
Types of Moving Averages
1) Simple Moving Average (SMA)
SMA is calculated by taking the arithmetic mean of a given set of values on a rolling window of timeframe. The usefulness of the SMA is limited because each point in the data series is weighted the same, regardless of where it occurs in the sequence. Critics argue that the most recent data is more significant than the older data and should have a greater influence on the final result.
2) Exponential Moving Average (EMA)
EMA overcomes the limits of SMA, where more weight is given to the recent prices in an attempt to make it more responsive to new information. When calculating the first point of the EMA, we may notice that there is no value available to use as the previous EMA. This small problem can be solved by starting the calculation with a simple moving average and continuing on with calculating the EMA.
The primary functions of a moving average is to identify trends and reversals, measure the strength of an asset's momentum and determine potential areas where an asset will find support or resistance. Moving averages are lagging indicator, which means they do not predict new trend, but confirm trends once they have been established.
A stock is deemed to be in an uptrend when the price is above a moving average and the average is sloping upward. Conversely, a trader will use a price below a downward sloping average to confirm a downtrend. Many traders will only consider holding a long position in an asset when the price is trading above a moving average.
In general, short-term momentum can be gauged by looking at moving averages that focus on time periods of 50 days or less. Looking at moving averages that are created with a period of 50 to 100 days is generally regarded as a good measure of medium-term momentum. Finally, any moving average that uses 100 days or more in the calculation can be used as a measure of long-term momentum.
Support, resistence and stoploss can be infered by referring the closet MA below or above the market price. The other factor that is used in short term momentum is the trading volume. The moving averages along with the trading volume can provide a better insight to short term movement.
Markets are moved by their largest participants - I believe this is the single most important principle in short-term trading. Accordingly, I track the presence of large traders by determining how much volume is in the market and how that compares to average. Because volume correlates very highly with volatility, the market's relative volume helps you determine the amount of movement likely at any given time frame--and it helps you handicap the odds of trending vs. remaining slow and range bound.
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