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Dear Friends,
With Intra week volatile gyrations in nifty the statement that week on week Nifty moved up 1% will be an understatement. Over the weekend two major corporate events have occurred, Reliance Industry India,s most valued private sector enterprise has placed a non binding cash bid to buy Dutch company Lyondell Basel. Reliance Industry record date for Bonus is 27th of November 2009. Almost at the same time the outcome of the Supreme Court judgement can be expected. Moreover the company has been a marked underperformer compared with the broader markets in last two quarters. It is significant as Reliance Industry has the largest free float market capitalization in the benchmark index. An interesting hedge for Reliance industry long for the month ahead could be Rnrl longs. It is also an opportunity for people who want to save short-term capital gains tax. This process can be completely hedged and can be used to save some taxes legally. E.g
Short term capital gain tax liability 1,50,000.
Number of reliance shares bought 150.
Price of Ril shares:-((assumed for easy calculations.): 2000.
Bonus Ration 1:1.
Cost of original
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