When you go to the website of either of the principal stock exchanges viz. The NSE and the BSE; you will find detailed corporate announcements section. Whether you are an intraday trader, short term trader or even a long term investor, these corporate announcements have a lot of relevance. This is how a typical corporate announcement section of the BSE looks like on the website.
Some of the major news items that can be price sensitive for the stocks are as under:
These include rights issues, bonus issues and stock splits. While rights issued at a discount can be value accretive to shareholders, bonus and stock splits are generally value neutral. However, when high priced stocks come out with bonus and stock split announcements, it improves the liquidity and brings the stock under a more acceptable and popular trading range. To that extent corporate actions are meaningful to stock prices.
Most companies follow a stable dividend policy. What markets are really interested in is the dividend yield of the stock which is the rupee dividends / stock price. Normally, a dividend yield of above 5% tends to act as a support for the price and that is why it is important.
This is, perhaps, one of the most important pieces of announcement coming out from Indian companies. All listed companies are statutorily required to disclose their sales and profit figure to the exchange on a quarterly basis. Apart from the actual numbers, markets also look at the guidance provided.
Open Offer details
This is the list of the open offers that are currently being made and at what price. Under the SEBI regulations companies are required to make an open offer to shareholders under certain stipulated circumstances.
IPOs and OFS
The announcements section also includes the recent IPOs and OFS concluded; the open issues and the forthcoming issues. IPO investing is a critical part of your investing universe and hence it is useful input to investors. While IPOs reflect fresh raising of capital, the OFS is an offer-for-sale wherein the exiting shareholder exits a part of the stake in the company.
Change in management
Companies are required to disclose key management changes to the exchange. Any appointment of independent directors, resignation of directors, changes in the senior operating management, appointment of auditors / legal advisors, change in registrars etc have to be communicated to the exchange as all these are price sensitive information.
Schedule of Analyst Meet / Investor meet
This is something companies have started to disclose in the last few years. Generally, companies need to tell the story about their growth and their future prospects to a set of knowledgeable people like analysts, traders, fund managers, institutional investors etc. Most companies provide advance information of such analyst meets and investor meets on the exchange website.
Major orders received
One of the key factors in the valuation metrics of Indian companies is the size and quality of the order book. When a company gets a fresh order from a client or even if they get an order renewal, this is disclosed to the exchanges and it is covered under the announcements section. Order book shifts tend to be fairly price sensitive, especially in sectors that are extremely competitive.
Reaction to newspaper clippings
Newspapers tend to be more into rumours and expectations rather than into pure news. That is where the excitement is. Quite often, you see news clippings in the press or the electronic media about a major order, or a likely acquisition or possible merger. Such news items are generally from unconfirmed sources. However, to avoid unnecessary speculation in the stock, the exchange asks the company in question to clarify on the news item. More often than not, there is never a smoke without a fire.
Disclosure under SAST Regulations
This is a very common announcement that companies make regularly. Under the Substantial Acquisition of Shares and Takeovers (SAST), the companies are required to disclose any major change in shareholding pattern. This includes any buying or selling of shares by the directors of the company, the promoters of the company or the promoter group, senior management and other insiders etc. Additionally, any major institutional shift in holding is also reported.
The corporate announcements by BSE are wealthy and useful source of information. More often than not, they are also quite price sensitive.