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Thursday, 25 August 2016

25 August 2016 - Views & News

MARKET VIEW

Indian markets are expected to open flat to positive. Today being expiry in NSE, markets may remain volatile during the day. Overall we maintain our bullish stance on the Nifty for a short-term target of 8850 as long as it is trading above 8518.

Nifty Spot Levels

Support 8590 – 8540 – 8518
Resistance 8696 – 8728 - 8750

MARKET UPDATE

Sgx Nifty +1 pts ‎Dow -65.82 pts ,Nsdq -42.38 pts , S&P -11.46 pts ‎, Bovespa -302 pts , Ftse -32 pts , Dax +30 pts  , Cac +14 pts , Nikkei  -61 pts  now, Crude @ $46.76 brl (-0.01), Brent @ $49.05 brl (-0.91) , Gold @ $1328.80 (-0.90), Silver @ $18.54 (-0.02), Euro @ $1.1263, JPY @ $100.5400, INR @ $67.1013

GLOBAL MARKET UPDATE

 • Asian stocks slipped, taking their cue from an overnight drop on Wall Street, while the dollar marked time ahead of Friday's speech by Federal Reserve Chair Janet Yellen at the global central bankers' meeting
• Wall Street retreated, pulled lower by weakness in the materials and healthcare sectors, with the Dow losing 0.4 percent and S&P 500 falling 0.5 percent. Recent hawkish comments from some Fed officials, including Vice Chairman Stanley Fischer, have raised expectations that Yellen might signal a hike in September.
• Crude dropped to a one-week low after a government report showed that US crude inventories unexpectedly rose last week. Meanwhile Iran’s oil ministry said the country hasn't yet decided whether to join informal OPEC talks next month in Algiers.
• Gold prices slipped to a 4-week low as investors seemed to move from the sidelines ahead of a speech by Federal Reserve Chair Janet Yellen this weekend

Today's Corporate Action 25th Aug  Ex Date

BPTEX Reduction of Capital
CREATIVE Final Dividend - Rs. - 3.0000
GNFC Dividend - Rs. - 2.0000GPTINFRA Interim Dividend - Rs. - 1.0000INDIANCARD Interim Dividend - Rs. - 10.0000
ITHL Dividend - Rs. - 4.2500
JAYBARMARU Final Dividend - Rs. - 2.0000
JBMA Dividend - Rs. - 1.7500JINDALSAW Spin Off
JKTYRE Dividend - Rs. - 2.5000MAYURUNIQ Buy Back of Shares
MAYURUNIQ Interim Dividend - Rs. - 0.2500
NUTRICIRCLE Reduction of Capital
SHRIDINE Dividend - Rs. - 1.5000STRTECH Final Dividend - Rs. - 1.0000USHDI Dividend - Rs. - 1.0000VIMTALABS Dividend - Rs. - 1.0000
Today's Key Result 25th Aug 

Gammon Infra, Jyoti Structure,  Srcs-Cogencis Est Net 

TOP NEWS

Monsanto India: Pulls out new GM cotton seed from India. Negative for Monsanto near term, also negative for Kaveri Seeds in long run , if the issue persists
Monsanto has withdrawn an application seeking approval for its next generation of genetically modified cotton seeds in India. The report further suggests that the withdrawal comes on the back of a government proposal that would force Monsanto to share its technology with local seed companies, which would take the competitive advantage away from Monsanto. The decision to pull out  could set back Monsanto's efforts to introduce its new seed - Bollgard II -Roundup Ready Flex technology, for years ahead and lead to further losses.

Natco, Biocon & Dr Reddy: Teva’s second patent on Copaxone is invalidated by US agency – Sentimentally positive for Natco, Biocon and Dr Reddy as these companies have ANDA’s filed with USFDA; Copaxone has market size of $ 3.5 bn in US and is big opportunity for generic players which now await USFDA approval so that the product could be launched.

Automobiles: The proposed vehicle scrappage policy mooted by the road ministry on Wednesday received in-principle support from the finance ministry. The policy aims at checking pollution by scrapping 15-year-old vehicles from road. As per the media sources, finance ministry had suggested putting the proposed policy before a committee of secretaries. A committee of secretaries will discuss the policy. Instead of asking for tax exemption, Government would provide incentive in the Budget. Scrappage policy once finalised would lead increased demand for new vehicles and is positive for the Automobile sector. Positive in the  first phase:  for CV players like Ashok Leyland, Tata Motors  and CV ancillaries players like Jamna auto, Sundram Fasteners among others
  
FUND RAISING

SBI to raise up to Rs 11,100 Cr Additional Tier-I capital  through Basel-III compliant perpetual debt instruments.

STRONG RESULT

PNC Infratech - PNC Infratech more than doubled its consolidated net profit for the quarter ended June 30, to Rs 54.20 crore as against Rs22.13 crore in the year ago period. Consolidated total income remained almost stagnant at Rs 684.44 crore during the quarter under review as against Rs686.68 crore last year period. Consolidated EBITDA for the quarter was at Rs 165.8 crores, which was 25.4% higher than Rs. 132.2 crores in the corresponding quarter of previous year. The EBITDA margin improved from 19.5% to 26.1%. The Company’s order book in terms of outstanding contracts pending execution is valued at over Rs. 5,100 crores as on 30th June 2016. 

OTHER NEWS

Godrej Consumer products (GCPL) expanded the household insecticides category with the launch of Good Knight Fabric Roll on and patches (apply on clothes and not skin) and Good Knight Cool Gel (apply on skin) to provide personal and out of home protection from mosquitoes; focus is on maintaining the leadership position in the household insecticide segment in India and get back into strong double digit growth trajectory – positive read through for GCPL

Strides Shasun gets USFDA nod for Ranitidine tablets  - Positive for Strides
Tata Global Beverages (TGBL) is likely to restructure its China operations, there are challenges in operations of the Chinese joint venture, Zhejiang Tata Tea Extraction Company. A call on the business will be taken in the coming years - no major impact on earnings as the JV is small and contribution to consolidated entity is lower

M&M: Plans to launch 20 new products in the Commercial Vehciles space over the next 2-3 years; to double market share
M&M’s Ltd's truck and bus division is looking to become a full-range commercial vehicle player over the next two to three years with 20 new products in the pipeline with a focus on ICV (Intermediate Comercial Vehicle space) space. With the GST coming up, the  company expects the hub n spoke model to pick up, which would result in the demand picking up in the ICV space. To support the new product launches, the company has lined up a Rs 700 crore capex plan spread over the next 2-3 years. With the introduction of new models and entering new geographies, the company plans to double its market share in the Commercial Vehicles space from the current level of 4%.

Grasim Industries, Aditya Birla Nuvo – Kumar Mangalam Birla met with the senior management of the LIC to explain the merger of AB Nuvo and Grasim as per media reports. LIC will decide on whether to support the deal in 10-15 days.

State Bank of India: To partner LIC to form credit enhancement fund: sentimentally positive
State Bank of India, the country's largest bank, may partner with Life Insurance Corporation of India (LIC) and India Infrastructure Finance Company Ltd (IIFCL) to set up a credit enhancement fund that will guarantee lower-rated bonds issued by infrastructure companies and bolster their ratings. The fund's initial size could be Rs 500 crore and the guarantee provided by this fund will improve the credit ratings of these bonds, which will help firms to raise money at lower interest rates and also tap insurance and pension funds. The proposed fund will initially provide guarantees to bonds issued by infrastructure companies. At present, insurers are not allowed to invest in bonds of companies that are rated below AA, the second-highest level of safety. This will also give room to promoters to service their existing debt with bonds having much higher tenor and benefit from substantial reduction in interest burde.

Two wheelers: Two wheeler majors Hero Motocorp and Honda have offered exclusive discounts to government employees, to drive their sales.  The move comes on the back of a pay out of the 7th pay commission recommendations. Hero MotoCorp is offering cash discounts of Rs 1,500 on every product (motorcycles and scooters), irrespective of ticket size. For government employees residing in Delhi, insurance worth Rs 1,600 is also being offered as a freebie. The companies are targeting around 4.8 million central government employees and 5.5 million pensioners, who will benefit from the increase.

Novartis India buy back  window opens from 25th August 2016 till 8 September 2016 for shares worth Rs 290 crore - the buyback price is at a premium of 7% to its closing price of Rs 711.20 on Wednesday.
Novartis would acquire close to 38 lakh shares at a price of Rs 760 a share. Currently, the promoter of the pharmaceutical company- Novartis AG holds 75% of outstanding equity in the Indian subsidiary. Hence as per SEBI’s listing guidelines; it require a minimum free float of 25%; this would imply that the promoters, namely Novartis AG would need to tender shares in the buyback should it want the Indian subsidiary to stay listed.

Infrastructure – The Cabinet Committee approved Rs24,373 crore of rail projects. The investment which will be in 9 projects seeks to construct 1937.38km of tracks across nine states. The CCEA also revised the cost estimate of the National Highways Interconnectivity Improvement project to Rs6461 crore from Rs5193 crore. The development is positive read thru for infrastructure sector.

TCS: Has paid $26 mln to the US district Orange County to settle a case for not meeting the terms of a $6.4-mln contract for building a property tax system for the latter in California

AstraZeneca Pharma India – To terminate distribution agreement for Meronem (meropenem) in India. This is as a result of a global agreement by AstraZeneca PLC to sell the development and commercialisation rights to Pfizer Inc, of its late-stage small molecule antibiotics business. Meronem is a anti-bacterial used for the treatment of serious infections in hospitalised patients – Negative for Astrazeneca India; Could be positive for Pfizer India if Pfizer Inc decides to launch the product in India through Pfizer India.

Tata Global Beverages has indicated that the GST will have inflationary impact on the tea prices which might lead to higher branded tea prices – sentimentally negative for Tata Global Beverages and HUL’s beverage segment 

MORE NEWS

Union Cabinet clears new India-Cyprus DTAA
SBI may partner LIC, IIFCL for credit enhancement fund
CCI clears way for setting up of $17-billion entity
Bad loans of state-run banks double in 15 months
KFA brands to be auctioned again on Thursday
Mukesh Ambani's hunts for 100 million Jio subscribers
Private sector bankers salary misaligned: RBI
Nirmala Sitharaman plumps for 200 bps rate cut by RBI
Tata Global Beverages to explore restructuring or selling China operations
Record German budget surplus fuels investment debate
Vodafone-Idea merger not easy, unlikely anytime soon: analysts
Lupin arm gets USFDA nod to market generic Zyvox tablets
Sebi reviews warehousing norms for agricultural products
GST rate should be lower for essential food items: CII 
NBCC plans to build on business with Hindustan Steelworks acquisition
GST to have inflationary impact: Cyrus Mistry
Strides Shasun gets USFDA nod for Ranitidine tablets
‘Energy Efficiency will unlock hidden savings in manufacturing sector’ 
LIC won’t hike investment in stocks in 2016-17
Essar said to face asset sale challenge from IDFC private equity
Tata Global Beverages looks to enter dairy business
Infosys may get about $60 million for GST project
SBI plans to raise Rs11,100 crore through AT-1 bonds
Kingfisher Airlines brands to be auctioned again at lower price             
India Inc enduring deepest earnings decline in 20 years: Morgan Stanley
Assets with portfolio managers up at Rs 11.2L cr in July-end
India to receive normal rains, not surplus, as La Nina chances fade
Zydus Cadila recalls over 2lakh bottles of anti-depressant drug in US
'Realty law to cut litigation, ensure timely delivery'
Power tariffs to rise, as freight rate hiked
TCS settles Orange County lawsuit for $26 million
Walmart reviews cotton certification records of Welspun
Chinese firms’ bid to buy $1.5b Pakistan utility stake
Samsung, Tencent to become Asia’s most valuable firm

 STOCK IN NEWS 

1. TCS said it had settled an ongoing lawsuit with Orange County in California, USA. For doing so, it has agreed to pay $26 million (Rs 175 crore).
2. Hero MotoCorp and Honda have started offering exclusive discounts and offers to government employees and pensioners to expand sales.
3. Tata Steel starts ferroshots exports to Thailand
4. IKEA to continue doing business with Welspun India
5. RCom expands enterprise product portfolio with Cloud X WAN
6. Lupin arm gets USFDA nod to market generic Zyvox tablets
7. SBI to raise up to Rs 11,000 crore via debt securities
8. Tata Power announced that its generation capacity increased by close to 9 per cent in the first quarter of the current fiscal against the previous corresponding period.
9. Tata Global brews strategy for struggling China biz, plans to acquire dairy products

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