*members - do you think that there is still some steam left over?* ** *Oil cos' stocks rally *
** ** ** *PSUs likely to see 20-25% earnings upgrade: Analyst. * Our Bureau Mumbai, June 25 Oil and gas companies' stocks surged on Friday after the Government freed petrol prices and said it would deregulate diesel prices later. Public sector oil marketing companies (OMC) surged the most after petrol prices were increased by Rs 3.50 a litre and diesel price by Rs 2 a litre, as part of a plan to move towards a market-determined fuel price regime. The shares of the OMC companies were trading in the black since the market opened even though broader market was in the red. As soon as the price hike was announced, the shares of OMCs saw a sharp “up-tick”. The end of the day saw BPCL jumping 12.84 per cent to Rs 621.35; HPCL rising by 13.66 per cent at Rs 401.05, and IOC by 10.39 per cent at Rs 377.3. “OMC stocks will continue to be strong as months of speculation have finally ended in an action by the government. All three OMCs are likely to see earnings upgrades of 20-25 per cent and there is more steam left even after today's rally of 10-13 per cent. “In the short-term IOC might outperform the other two as historically in rallies driven by news flow and price hikes, IOC has always outperformed,” said Mr Alok Deshpande, Research Analyst (Oil and Gas) at Elara Capital. About upstream companies such as ONGC and Oil India, Mr Deshpande said: “Today's decisions have added roughly 10-15 per cent to their earnings based on our first cut analysis. However, if the Government continues with the current subsidy sharing system where the upstream companies are sharing only auto-fuels, then the upside for upstream can be 20-25 per cent as the petrol and diesel losses have been minimised substantially.” Oil India shares closed up 4.62 per cent at Rs 1,360.2 and ONGC by 6.35 per cent at Rs 1,264. Mr Deepak Parekh, Oil and Gas analyst at Angel Broking, said that private players can now re-enter the retail market after the de-regulation of fuel prices. Reliance Industries closed up 1.14 per cent at Rs 1,063.25, Essar Oil by 6.45 per cent at Rs 137.75 and Cairn India by 0.89 per cent at Rs 311.6. An Emkay Global Financial Services research report said there will be a total savings of Rs 22,500 crore for the upstream, OMCs and PSU companies. The BSE Oil and Gas index was the biggest gainer among the BSE sectoral indices on Friday. It gained 2.88 per cent, while the Sensex lost 0.88 per cent and closed at 17574. ** http://www.thehindubusinessline.com/2010/06/26/stories/2010062650601000.htm -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
