Rally in state-run oil firms overdone: Nomura
MUMBAI (Reuters) - Nomura said the rally in India's state-run oil companies on Friday, spurred by the government's announcement to allow higher diesel prices, was excessive and the action would not lead to any improvement in the bottom line of these companies.
"We reiterate that yesterday's actions are not a big reform, and there may not be much reduction in oil marketing companies' overall under-recoveries," Nomura wrote in a note on Friday.
"Also, even as under-recoveries reduce, these may not result in any improvements in the bottom line of companies, in our view," the analysts added.
Nomura maintained its 'reduce' rating on Oil and Natural Gas Corp (ONGC.NS) and Oil India Ltd (OILI.NS).
Shares of state-run companies surged for a second session on Friday after the government's diesel announcement.
(Reporting by Rafael Nam and Abhishek Vishnoi; Editing by Anand Basu)
- Tweet this
- Share this
- Digg this
- UPDATE 3-Turkish president rejects Facebook, YouTube ban over wiretaps
- UPDATE 1-"Everything is fine", Pistorius told guard after shooting girlfriend
- CEO in apparent suicide was bitcoin fan, had other issues, too
- Exclusive - Pimco's Gross declares El-Erian is 'trying to undermine me'
- UPDATE 3-Indian shares rally to record as foreign investors buy big
Sahara’s investment programmes include schemes that are similar to a typical Indian bank’s fixed or recurring deposits. But the arrest of the company's chief Subrata Roy last week and the court case over an outlawed bond scheme are raising fears among some investors who worry they will not get their money back. Full Article