Downward trend in GAIL (India) Ltd continues as Natural gas prices decline
The largest state owned natural gas processing and distributing company, GAIL (GAIL Authority of India Ltd) that is administered under the control of Ministry of Petroleum and Natural Gas. The company is primarily into the production of natural gas, liquefied petroleum gas transmission, petrochemical, city gas distribution and electricity generation. Moreover, the company has been conferred with the Maharatna status which has been provided to eight other Public Sector Enterprises. The company had posted a 12.93% year-on-year rise in its consolidated profit at Rs.2,029.51 crore for the quarter ended December 2019 which shows the strong financials of the company.
The Ichimoku cloud indicator shows the downward trend for the stock as the market sentiments are bearish for the stock as the share price of the company has been declining for consecutive 4th session. There was a bullish trend for the stock shown by the formation of the green cloud which lasted for a shorter period of time denoting the strong market sentiment for the stock. But the impact of the Coronavirus outbreak has caused a drop in the prices of oil and gas across the globe due to the demand and supply disruptions as companies have shut down their operations.
Along with OIL and other PSU’s, GAIL have been detached from the AGR case in which the company was asked to pay their dues of Rs.1.83 lakh crore and Rs.48,489 crore from OIL for generating revenue from leasing out the surplus bandwidth capacity to third parties. The Minister of State for Telecom, IT & HRD stated that the PSU’s such as GAIL, Oil India et., which were represented to the Department of Telecom that the AGR judgment is not applicable to them which waived off their dues. Also, the company is in talks about making a potential investment in ACME Solar by acquiring the stake of 49-74% in the company. The largest solar power developer in India is valued at more than $1.6 bn which would be a strategic fit to the parent company after the acquisition.
The SuperTrend chart shows the downward trend which started on 24th February 2020 as the demand in the global market were disrupted by the outbreak of the COVID-19. Also, it can be observed that the bullish trend for the stock lasts for a shorter period as the economic activity in the country has taken a hit as the government has ordered a 21-day lockdown of the country. The Stoch RSI also shows a downward trend for the stock as it started declining after the engulfing bullish candlesticks.
The government has approved the Northeast gas grid project by boosting the development of Natural gas in Northeast. The Cabinet Committee on Economic Affairs approved capital grant of 60% of the estimated cost of Rs.9,265 crore which is implemented by the joint venture of five companies (GAIL, OICL, ONGC, OIL and NRL) which covers eight states of the North-Eastern region. The development of the project would boost the market as it would cover the untapped region which would be benefited.
The Ichimoku cloud indicator shows the downward trend for the stock as the market sentiments are bearish for the stock as the share price of the company has been declining for consecutive 4th session. There was a bullish trend for the stock shown by the formation of the green cloud which lasted for a shorter period of time denoting the strong market sentiment for the stock. But the impact of the Coronavirus outbreak has caused a drop in the prices of oil and gas across the globe due to the demand and supply disruptions as companies have shut down their operations.
Along with OIL and other PSU’s, GAIL have been detached from the AGR case in which the company was asked to pay their dues of Rs.1.83 lakh crore and Rs.48,489 crore from OIL for generating revenue from leasing out the surplus bandwidth capacity to third parties. The Minister of State for Telecom, IT & HRD stated that the PSU’s such as GAIL, Oil India et., which were represented to the Department of Telecom that the AGR judgment is not applicable to them which waived off their dues. Also, the company is in talks about making a potential investment in ACME Solar by acquiring the stake of 49-74% in the company. The largest solar power developer in India is valued at more than $1.6 bn which would be a strategic fit to the parent company after the acquisition.
The SuperTrend chart shows the downward trend which started on 24th February 2020 as the demand in the global market were disrupted by the outbreak of the COVID-19. Also, it can be observed that the bullish trend for the stock lasts for a shorter period as the economic activity in the country has taken a hit as the government has ordered a 21-day lockdown of the country. The Stoch RSI also shows a downward trend for the stock as it started declining after the engulfing bullish candlesticks.
The government has approved the Northeast gas grid project by boosting the development of Natural gas in Northeast. The Cabinet Committee on Economic Affairs approved capital grant of 60% of the estimated cost of Rs.9,265 crore which is implemented by the joint venture of five companies (GAIL, OICL, ONGC, OIL and NRL) which covers eight states of the North-Eastern region. The development of the project would boost the market as it would cover the untapped region which would be benefited.
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