MMTC shares hit 10% lower circuit amid reports of likely shutdown
MMTC hit a lower circuit of 10% at Rs 78 in Wednesday's trade on BSE amid reports that the government might shut down the company.
The Centre may decide the fate of three government-owned firms on Monday, October 23 in a high-level meeting to be chaired by Union Commerce and Industry Minister Piyush Goyal, according to CNBC-TV18 sources. Goyal is likely to take a call on the closure of the Metals and Minerals Trading Corporation of India (MMTC), the State Trading Corporation (STC) and the Project & Equipment Corporation of India Ltd (PEC).
The closure of these three government-owned companies is pending as the Commerce Ministry had denotified them as canalising agencies for trade last year.
Earlier, the government had examined the utility of the three companies and held that there was no need for any canalising agency in the Department of Commerce.
MMTC used to be a canalising agency for exporting and importing high-grade iron ore, manganese ore, chrome ore, copra, and several other precious metals.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, «The canalising agencies like MMTC, STCI and PRC served a purpose during the era of shortages, high tariffs and import restrictions.
They have outlived their utility and need to be shut down.»
On a year-to-date basis, MMTC rallied over 100%, delivering 160% returns in the past six months. Meanwhile, it also surged 380% in the last three years.
Technically, the stock's day RSI (14) is at 83.6.
The RSI below 30 is considered oversold, and above 70 is overbought, Trendlyne data showed. The day MACD (12, 26, 9) is at 6.4, which is above its center and signal Line, this is a bullish indicator.
MMTC's shares are currently trading above their
