In the last few weeks we have been bombarded with rumours of all sorts. Every business channel, Blackberry messenger, Yahoo or any modes of communication is full of rumours.
Even more interesting is the part of how creatively the rumours are designed on exciting words as described in the heading.
Some of them are as follows
Delisting Candidates ---- Timken India, Foseco, BASF , Novartis, Monsanto, Blue Star, Elantas, Timex and so on ..
Land Sale – Raymond , Premier Ltd
Takeover – First Leasing , FSL , 3i infotech, India Infoline , FSL, Bata
Stake Sale - Karnataka Bank , First Leasing
Delisting / BuyBack – Foseco, Monsanto , Timken, Basf , Amrutanjan Timex ,
Acquisition – Biocon, Vimta Labs, Lloyd Steel
Stock price movements post rumours – Timken 247 high to 224, Frsensius Kabi 145 to 129 , First Leasing 115 to 98 and so on the stocks did jump 5-10% but end up losing more then it.
Well the number of unconfirmed rumours ( as mentioned by TV channels ) has just increased immensely over the last few weeks.
Earlier when i got a buzz on Camlin, Andhra Paper and some which worked out i thought that information is being heard on the market very fast due to new modes of communication. My BBM gives me a rumour every few hours Wont be surprised to hear a rumour on rains, cricket matches also it seems
What is more surprising is where does this rumour come to Business Channels and if its coming why are they flashing on the screen without confirming ???
Well i smell something seriously wrong and somebody benefitting from it !!The reason is all the stocks do jump up sharply in the day on the buzz but end up losing 10% over the next few sessions and head back much lower also.
Is this a ploy to trap or fraud traders/investors and participants who jump on any rumours as well as an opportunity for certain people to dump some holdings or profit from the unusual liquidity created.
Earlier such a trend of rumours were done by sending bulk SMS,e-mails for dumping small caps but the current modus operandi is seriously concerning.
The market has not been doing much so it seems market makers are finding ways to create false liquidity and profit from it :). Also in such stuff the results are very very quick as the game is done in 2-5 sessions.
Also with the lull in viewership it seems Business channels are trying to use every ploy to out do each other in being the first one to flash the rumours. If this continues there wont be much difference between Business Channels and Cartoon Network.
So who can stop this – Well the regulators can but they seem to be outsourcing their work too – Check this article - http://moneylife.in/article/investor-interest-sebis-hands-off-approach/17199.html
BOTTOMLINE --------------------------- The rumours are all around and will get more creative and exciting !! Avoid trading on it unless you are looking to take a gamble with high risk