Tata Chemicals (TCL) has signed definitive agreements to acquire US-based soda ash maker General Chemical Industries Products Inc (GCIP) for $1.05 billion (about Rs 4,000 crore) to become the second largest producer of soda ash in the world.
The announcement was made exactly a year after Tata Steel, another Tata group company, acquired British steel major Corus.
TCL is now the third largest manufacturer of soda ash and sodium bicarbonate in the world with a production capacity of close to 3 million tonne per annum (MTPA). The acquisition will add another 2.5 MTPA to take its total capacity to 5.5 MTPA - next only to US-based FMC Chemicals.
The company had bought 63.5% stake in UK-based Brunner Mond Group for about Rs 508 crore in December 2005. It also holds a 33% stake in Indo Maroc Phosphore S.A. (IMACID), Morocco, which is engaged in the manufacture of phosphoric acid.
Soda ash contributed 40% of TCL's revenues of Rs 4,563 crore for the first nine months of 2007-08. The rest of the revenues are from its fertiliser and inorganic chemicals businesses.
"This is a historic occasion for Tata Chemicals. The acquisition will help us access markets in North America, Latin Americ and the Far East," said Homi Khusrokhan, managing director, TCL, at a press conference in Mumbai today.
GCIP's subsidiary General Chemical (Soda Ash) Partners (GCSAP) has mining and manufacturing facilities located at Green River basin in Wyoming, USA. The Green River basin is the largest and most economical natural soda ash mine (trona) in the world. GCSAP shares the Green River basin with three other producers of soda ash, OCI Chemical Corporation, FMC Corporation and Solvay Mineral.
TCL signed an agreement to acquire 100% equity of the privately held GCIP from Herbinger Capital Partners, a private equity player with majority shareholding. The acquisition, subject to US regulatiory clearances, will be done through debt and equity funding, said TCL executives.
A profit-making and debt-free company, GCIP is estimated to have a turnover of over $400 million, said TCL executives.
The Gujarat-based soap and personal care producer Nirma had acquired Searles Valley Minerals (SVM), one of the top five producers of natural soda ash in the US with a turnover of $ 300 million, in November 2007.
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.
No comments:
Post a Comment