In a bid to scale up the institutional and investment banking business globally, domestic brokerage firm Religare Capital Markets, a wholly- owned subsidiary of Religare Enterprises, today made an open offer to buy London's oldest brokerage firm Hichens Harrison & Co.
Hichens Harrison has been in business for over 200 years, and is a member of the London Stock Exchange.
The open offer is valued at Rs 226.05 per share (285 pence per share) cash and values Hichens at Rs 440 crore (£55.5 million) after assuming the exercise of all outstanding options representing a multiple of 13.1 times Hichens' basic earnings per share for the 12 months ended December 31, 2007, according to officials of Religare Enterprises.
The shares of Religare closed at Rs 370 - a marginal drop of 0.15%.
Following the approval of the Reserve Bank of India (RBI), Religare Capital Market intends to make the offer through a newly incorporated wholly-owned subsidiary based out of Mauritius. The boards of Religare Capital Markets and Hichens have agreed on the terms of the recommended cash offer for the whole of the issued and to be issued share capital of Hichens Harrison.
"The acquisition will provide Religare an opportunity, as an Indian financial services group, to service the needs of Indian companies through its large global network and provide small and medium Indian corporates with much needed access to capital," said Religare Group CEO Sunil Godhwani.
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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