The Hindu Business Line : Tech Tools

I bought 30 shares of BHEL at Rs 2,500 after it announced a bonus in the ratio of 1:1 in January. But the stock has been going down ever since. Why it is so? As per my perception the price should have moved upward. Does this mean that the market was already aware of the bonus and the scrip has peaked prior to the announcement or will it start rising again after the record date is announced? Should I hold this stock or sell it? Ravinder

BHEL (Rs 2,099.6): We are not operating in an efficient market. The news and information pertaining to stocks is not transmitted evenly or at the same time to all the market participants.

Great precaution should be taken while buying stocks after the announcement of a bonus, rights, dividend, merger, acquisition, stock split etc. There is a high degree of probability that the news has been circulating among the market participants for some time already.

Those who bought the stock earlier would rush to book profit once the news is out in the media.

That is the genesis of the famous stock market adage, "buy on rumour, sell on news". Some would extend this a little further and say that one should sell on a rumour because there would be a string of people who have heard the rumour before you. Such persons would be ready to sell even as you go in to buy.

BHEL had already had a 19 per cent rally from the low of Rs 2,105 made in January 2007 prior to the bonus announcement. But the long-term outlook for this stock continues to be positive. A fall below Rs 1,960 is required to negate this view. Hold the stock with a stop at Rs 1,950. A reversal above Rs 1,950 can take the stock towards its previous high once more.

I have recently purchased Eicher at Rs 189 and the last traded price is Rs 255. I am not able to sell (online) as the screen gives the message, "This stock is not traded in this Exchange" (for both BSE/NSE).

Please advise what should I do and how to sell this stock. Sebi has issued a ban on selling Atlanta stock. I am not able to sell this stock as well purchased at Rs 1,040. Iqbal

The Eicher stock has been delisted from BSE/NSE. The company discovered an exit price of Rs 265 under the reverse book building process. You can contact the company to get further details.

In any case, it is easy to get flustered when such messages flash on the computer screen. At times, the explanation could be something quite simple.

You should get in touch with your online broker when you encounter such difficulties. He would be able to sort out these problems easily.

Sebi has not issued a blanket ban on selling the shares of Atlanta. Only the promoters of Atlanta and a few other entities have been banned from buying, selling or dealing in the shares of Atlanta.

Other investors are free to buy or sell this stock. The reason why you are unable to sell the shares could be because the stock has been hitting the lower filter continuously with almost zero volumes.

Lokeshwarri S. K.

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