Fresh Troubles See Adani Stocks Cap Worst Month Since February

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Belgique Nouvelles Nouvelles

Belgique Dernières Nouvelles,Belgique Actualités

New allegations over governance issues at India’s Adani Group put the brakes on a recovery in the conglomerate’s market value from carnage in the wake of US-based short-seller Hindenburg Research’s report earlier this year.

Adani-related stocks plunged Thursday after an investigation raised questions about the group’s ownership structure and trades by certain entities associated with its founders. The ports-to-power conglomerate denied the allegations, saying they are based on decade-old cases for which investigations have already been completed.

The latest drop capped a $4.4 billion loss in total market capitalization for 10 Adani stocks in August. That’s the largest monthly decline since the more than $150 billion wipeout over the first two months of the year after similar allegations from Hindenburg.The group’s valuation has mounted a tentative comeback since then, with Adani’s founders repaying some debts and raising billions of dollars selling stock to major overseas investors.

“Fundamentally, I am not concerned about Adani companies as they have reported good cashflows and are easing their leverage positions,” said Alok Churiwala, managing director of Mumbai-based Churiwala Securties Pvt. Still, “my advice to investors will be don’t jump the gun,” as clarity is needed on the ongoing probe.

Technical factors also indicate it’s better to remain cautious on Adani stocks. Investors betting on derivative contracts in Adani Enterprises Ltd. have been increasing downside protection, with a notable shift in demand for puts relative to calls over the last two sessions.

 

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Belgique Dernières Nouvelles, Belgique Actualités

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