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Friday, 26 August 2016

26 August 2016 - Views & News

MARKET VIEW

Indian markets are likely to open on a flattish note based on the global cues. Nifty as long as holding 8480 levels, bias remains positive for short term.

Nifty Spot Levels

Support 8540 – 8518
Resistance 8620 - 8683

MARKET UPDATE

Sgx Nifty -4 pts ‎Dow -33.07 pts ,Nsdq -5.47 pts , S&P -2.97 pts ‎, Bovespa +4 pts , Ftse -18 pts , Dax -93 pts  , Cac -28 pts , Nikkei  -163 pts  now, Crude @ $47.34 brl (+0.01), Brent @ $49.67 brl (+0.62) , Gold @ $1324.00 (-0.60), Silver @ $18.48 (-0.00), Euro @ $1.1287, JPY @ $100.5600, INR @ $67.0550

GLOBAL MARKET UPDATE

• US stocks were modestly lower on Thursday, weighed down by a drop in healthcare and consumer names, while financials advanced slightly after two more Federal Reserve officials pushed the case for a rate hike.
• The Dow Jones industrial average fell 33.07 points, or 0.18 percent, to 18,448.41. 

Today's Corporate Action 26th Aug  Ex Date

FINCABLES Final Dividend - Rs. - 2.0000FINCABLES Special Dividend - Rs. - 0.5000
PFC Bonus issue 1:1
TCI Spin Off‎

Today's Key Result 26th Aug 

Tata Motors ( Cons 2501 Cr -10% Yoy) P& G( 100 Cr - 6% Yoy) Finolex Inds,Guj Inds,Jb Chem, Jbf Inds,Pratibha Inds,Shilpa Medi,Triveni Eng  Srcs-Cogencis Est Net 

TOP NEWS

Lupin Pharma gets USFDA tentative approval for gPaxil oral tablets (Extended release) used as an anti-depressant – Positive for Lupin.

Cipla’s subsidiary InvaGen Pharma gets USFDA approval for trospium chloride used to treat overactive bladder – Positive for Cipla.

Biocon & Mylan Inc have reported that European Medicines Agency (EMA) has accepted for review Mylan’s Marketing Authorization Application (MAA) for a proposed biosimilar Trastuzumab, which is used to treat certain breast and gastric cancers. Mylan and Biocon, which have co-developed this proposed biosimilar, anticipate that this may be the first MAA for a Trastuzumab biosimilar accepted by the EMA for review – Positive for Biocon

Banking sector: RBI measures to increase debt market liquidity and participation  - positive read through
The Reserve Bank of India (RBI) announced several debt market reforms in line with the HR Khan Committee report. Which will help increase participations, liquidity in the Corporate Debt market. It has allowed banks to sell Masala Bonds, increasing credit enhancement limit from 20% to in 50%. Also, To improve market liquidity, the RBI allowed market making in Government Securities (G-Secs), accepted corporate bonds as eligible collateral under its Liquidity Adjustment Facility (LAF), removed the 7-day restriction for lending by listed companies in G-Sec market repo, introduced the electronic platform for corporate bond repos, allowed Foreign Portfolio Investors (FPIs) direct access to the corporate bond market sans brokers

SBI, ICICI Bank: RBI identifies SBI and ICICI Bank as D-SIBs in 2016 – neutral read through
The Reserve Bank of India has identified State Bank of India (SBI) and ICICI Bank as Domestic Systemically Important Banks (D-SIBs) in 2016 and has retained their bucketing structure as it was last year. The additional Common Equity Tier 1 (CET1) requirement for these banks has already been phased-in from April 1, 2016 and would become fully effective from April 1, 2019. The additional CET1 requirement will be in addition to the capital conservation buffer. Consequently, SBI & ICICI Bank will have to maintain 0.6% and 0.2% respectively as Additional Common Equity Tier 1 requirement as a percentage of Risk Weighted Assets (RWAs).
  
MACRO WRAP

Macro news: RBI widens S4A scheme ambit, gives more flexibility to banks: Sentimentally positive
As per media reports, the Reserve Bank of India (RBI) has issued a clarification with respect to norms of its Scheme for Sustainable Structuring of Stressed Assets (S4A) which allows bankers to restructure debt of corporate NPA accounts. As per the clarification, banks will now be allowed to waive accrued penal interest, the interest may not need be necessarily included in aggregate bank exposure. Also, the scheme ambit has been widened to include loans to projects that are still under implementation.  Also, RBI has allowed S4A norms to be applicable on all entities (earlier only those which had minimum Rs 500 crore debt) which includes accounts promoted by Asset restructuring companies (ARCs) which were not allowed earlier. Also, banks are now allowed to accept upfront infusion from promoters to reduce debt. The development will be positive for banks as well as for indebted corporate borrowers.

FUND RAISING

IDBI Bank to raise Rs 1,500 crore via additional tier-I bonds, this will help the bank to raise overall Tier-I capital.

Oil India board meeting on 24 Sep to consider issue of NCDs up to Rs6000cr

Indian Hotels has received the approval of its shareholders to raise upto Rs700 crore through issuance of non-convertible debentures on a private placement basis for its future growth prospects 
OTHER NEWS

Century Plyboards is divesting from Singapore subsidiary due to unviable business condition (imposition of anti dumping duty by India); is likely to get back whatever invested (about 2,00,000 Singapore dollars) – the company will continue to focus on domestic business and expect GST to improve domestic business fundamentals
Century Plyboards India is divesting its 51 per cent stake in Singapore subsidiary Innovation Pacific. The deal is expected to be completed in three months. The company indicated that hefty anti-dumping duty imposed by India on medium-density fibreboards (MDFs) made the proposed venture in Vietnam unviable. For any unspecified party, the duty was almost $64 per cubic metre, which is equivalent to 25 per cent of the CIF (cost, insurance and freight) price. The company expects to get back what it has invested about 2 lakh Singapore dollars (~Rs. 1crore). The company will be focusing on the domestic business.

J Kumar Infraprojects – The company on behalf of the “J Kumar-CRTG” JV signed an agreement with the Mumbai Metro Rail Corporation on 24th August 2016 for Rs5012 crore phase-3 of the city metro. MMRC had issued the LOA to the JV for the 3rd phase of the metro project and project was assigned last month on 5th July 2016. The work is expected to begin by October 2016.

Nalco’s Rs 2,835 crore offer to buyback will open on August 30. The offer size represents 22.15% of the aggregate of share capital and free reserves of Nalco. The buyback is to happen at a price of Rs 44/share.

Blue Star & Voltas: Air conditioner manufacturers are embracing the new energy efficiency standards sooner than expected as the new norms are slated to become mandatory from January 2018. We believe players like Blue Star, Voltas could be benefitted as they have already tweaked their manufacturing processes. These companies are hopeful that stringent energy efficient standards will benefit the industry, further helping grow the market for ACs in India. – positive read thru for AC players like Blue Star and Voltas

TCS analytics software helps retailers tap IoTs to serve up personalized customer experiences
TCS announced new software that enables brick-and-mortar retailers to leverage insightful data from in-store sensors and other Internet of Things (IoT) devices to deepen relationships with customers through more personalized marketing strategies.

Inox Leisure plans to invest Rs 200 crore
Inox Leisure plans to invest Rs 200 crore to add up to 60 cinema screens across the country this fiscal. The total capital expenditure that the company intends to incur on this pipeline for 2016-17 is ~Rs 200 crore, which would be funded by 60:40 debt equity.

EROS International media has signed a pact with Reliance Jio Infocomm, where Eros will provide entertainment content service ErosNow on Jio's platform

Banking sector: RBI draft measures to limit exposure of banks – neutral read thorough
In addition to its push to wean companies off bank finance and towards bond markets, the Reserve Bank of India (RBI) issued stringent draft norms on large exposures of banks to standalone and group entities. As per the draft, (sought feedback by Sep 15), RBI has set the large exposure limit for a counter-party at 20% and For a group, 25% of the bank's eligible capital base. In an exceptional case, the boards of banks may allow a bank to take an additional 5% exposure to a single entity, but such a leeway is not allowed for group exposures. These limits are sharply lower than the 15% cap on a single borrower exposure and the limit of 40% of capital funds of banks for a corporate exposure that are applicable now. As per the draft norms, all aspects of the large exposure framework must be implemented by Mar 31, 2019, and the whole framework will be reviewed after one year of full implementation. 
MORE NEWS

SBI and ICICI Bank "too big to fail" for second year in a row
RBI asks banks to strictly comply with crop insurance scheme
Russia becomes top wheat exporter to the world
Govt to transfer PMAY funds directly to beneficiaries
Liquidity shifting from EU to EM: Ridham Desai 
Jio extends free trial offer to Gionee, Karbonn owners
BoB's total business takes Rs 90,000-cr hit in FY16
RBI allows banks to raise Masala bonds, opens up currency market
Decks cleared to shut down 7 PSUs
Ajay Piramal, Venu Srinivasan join Tata Sons' board
SBI, ICICI continue to be systemically important: RBI
IDBI Bank opts for AT-1 bonds to raise Rs 1,500 cr
Insurers to file compliance to investment norms from Mar2017
Bloomberg acquires Barclays Risk Analytics
HDFC to issue NCDs worth Rs. 500 cr on Friday
IOC to consider bonus shares issue
Natco Pharma gets EIR from USFDA for Chennai facility 
ITC sues Britannia for allegedly copying biscuit packaging style
Welspun to appoint external auditor to look into alleged supply lapses
Gems, jewellery exports up 12% in April-July 
RBI says large firms have to pay more for bank loans, starting FY18
Kingfisher Airlines brands fail to find buyers for the second time
Brokerages lower growth outlook for IT sector
Asia-Pacific beats North America in fintech investment: report
Uber is said to lose at least $1.2 billion in first half of 2016
Power, port assets to be included in Essar-Rosneft deal            
Sensex slips 224 points on F&O expiry, Nifty settles below 8,600;
Vodafone India to delay IPO filing until towards end-2016 - IFR
EMA accepts Mylan, Biocon Trastuzumab biosimilar for review
IndiGo seeks shareholder nod to up borrowing cap to Rs 20k cr
Patanjali becomes 3rd largest FMCG seller at Future Retail
Back to licence raj, stock limit on sugar mills likely
MFs asset base from B15 cities up 19% to Rs 2L cr
IOC to invest Rs 650 cr in Tripura, send tankers via Bangladesh
India attracts $339 million fintech investments
Fed eyes public spending to plug $1t investment gap
Pfizer to buy antibiotics business from AstraZeneca

 STOCK IN NEWS 

1. Patanjali becomes 3rd largest FMCG seller at Future Retail
2. Monsanto dips as parent co drops plan to launch GM cotton seed
3. Panel on coal requirement by Sasan Power to meet next week
4. Cairn tax dispute: India has to respond by November, says CEO
5. IDBI Bank opts for AT-1 bonds to raise Rs 1,500 cr
6. Natco Pharma gets EIR from USFDA for Chennai facility
7. TCS settles US lawsuit for $26 mn
8. Hero Group's renewable energy arm to raise $125 million from IFC
9. Pfizer to buy antibiotics business from AstraZeneca
10. IOC to invest Rs 650 cr in Tripura, send tankers via Bangladesh
11. IndiGo seeks shareholder nod to up borrowing cap to Rs 20k cr

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