Equity Trading For Dummies : Thumbrules (Part 2)

First of all, thanks a lot to the readers for such an enthralling response to the last blog : Equity Trading For Dummies. It showed almost a 200% increase in readership for the first 48 hours!
This is an extension to the previous blog in which I have tried to list some more Factors/Indicators/Circumstances which affect the share prices of a company. Those who are active in markets very well know that these are not hard and fast rules but something that is most likely to happen in the given situation. So, when you read this, take them with a pinch of salt ;)
As always, looking forward to your constructive comments and suggestions.

Factor	Scenario	Impact
Credit Ratings	Decrease	Big investors take them seriously, especially if it comes from big houses like CRISIL, CARE, India Ratings(FITCH) etc. When India Ratings cut the ratings for Srei Infrastructure Finance from A+ to AA-, the stock tumbled 31% in a couple of sessions. A bad rating makes the availability of capital tough for the company apart from portending bad days.
Coal Supply	Decrease	Affects all coal-based steel & Power companies like JSW Steel, GVK Power, Reliance Power etc. Some of the companies like Tata Steel have their own coal mines called as Captive coal mines which helps to mitigate this decrease in supply to some extent. The amount of coal supply available with a company severely affects its Plant Load Factor (PLF) and thus its operations. JSW Steel fell drastically when the news of it having only 4 days of coal supply left hit the markets last year.
Rights Issue	At a price below the current market price	To increase the equity base, companies can take the route of a 'Rights Issue' which gives the existing shareholders the right to buy more of the company's shares. Generally, the companies price these issues at a steep discount to the current market price. This brings in more cash for the company but affects the present shareholders who are not tendering to the rights issue negatively. Alok Industries recently came up with its rights issue where the shareholders where given fresh equity at the rate of Rs 10 per share while the stock price at that time was around Rs 16. The stock fell by 18% the very day and drifted lower thereafter.
Promoter Stake	Increase	Affects the stocks positively as it shows that the promoters of the company have faith on the future of the company. Vakrangee Software hit its 52-week high on the day its promoters increased their stake by 4.57%. Similarly, Adani Power has dipped by 5% on reports that the promoters plan to sell part of their holdings in the coming days.
Festivals	As it closes in	All Hotels and Hospitality sector companies like Hotel Leela, Indian Hotels, EIH Ltd, Royal Orchid Hotels etc all rise. Sugar companies normally get high demand and if there is no negative ruling from government,  companies like Renuka Sugar, Balrampur Chini, Bajaj Hindustan should see uptick in their prices. Auto and Jewellery companies are also positively affected as people plan to buy new vehicles or jewellery during  the festivals. Companies like Jubilant Foodworks, which runs the Dominos Pizza, show increased revenue during these periods.
Movie Release	Bumper Opening	Very obvious, the companies associated with the movie will do well. Dabangg drove the prices of Shree Ashtavinayaka from around Rs 16 to Rs 52 in a couple of weeks. 'The Dirty Picture' did similar for Balaji Telefilms. PVR operates the largest chain of multiplexes and hence sees an uptick as and when any movie gets into the coveted club of Rs 100 Crores! Similarly, Cricket Worldcup affects these stocks negatively for obvious reasons.
Liquidity	Decrease	High Interest Rate Regime, Global Slowdown, Tax payments are some of the instances when the companies face liquidity crunch as big cash goes out of the market to safe havens or to government treasury. Very few factors impact share prices the way liquidity in the market does. A very recent example is the bond buying programs initiated by ECB and FED. Read about it here. Markets are already at their 52 Week high. RBI too pays heed to this parameter. Some of the SLR & CRR cut have been strategically announced just before the advance-tax payments by the companies. It's mostly on the increased liquidity in the system that now we are expecting the markets to scale 20K before the year ends.
Patents	Expiring	Bad for the actual innovator, good for the First-to-File pharmaceutical company as it enjoys a 180-day exclusivity for the sale of drug. We all know what Lipitor's FTF did to the share prices of Ranbaxy. More on this, read here.
Non-Performing Assets (NPAs)	Rising	One of the major parameters constituting any loan portfolio of banks and financial institutions. SBI slipped over 3.5% when it reported to have a gross NPA of 4.99% in its June'12 results. With strict regulations and BASEL III norms kicking in, this could be a big sore point for banks with high NPAs. Private banks like ICICI, HDFC, Yes Bank, IndusInd Bank generally have lower NPAs while PSUs like Central Bank, PNB etc normally have higher NPAs.
Markets	Booming	This is a very generic condition which is good for almost all stocks. But I would like to draw attention to the broking firms as investors suddenly start to flock in which leads to increased account activities and brokerage fees. Something like what is happening at present. Aditya Birla Money has appreciated by 80% in the past 8 days. Other firms like Edelweiss, India Infoline, Motilal Oswal, Geojit BNP also show similar trends.

Happy Investing :)