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Tuesday, 27 September 2016

27 September 2016 - Views & News

MARKET VIEW

Markets are likely to open flat. Nifty has broken down below the crucial support of 8750 and has also closed below it. Nifty may find support in the zone of 8690 – 8700. If it breaks down below the support zone, then it is likely to drift lower toward 8642 – 8570.

Nifty Spot Levels

Support 8696 – 8642 – 8570
Resistance 8750 – 8800 - 8838

GLOBAL MARKET UPDATE

 Wall Street fell on Monday as Deutsche Bank weighed on financials and investors hunkered down for the first debate between US presidential candidates Hillary Clinton and Donald Trump.
• The Dow Jones industrial average dropped 0.91 percent to end at 18,094.83 points and the S&P 500 lost 0.86 percent to 2,146.1.
• Uncertainty gripped Asian markets on Tuesday as investors braced for a potentially pivotal US presidential debate by shunning stocks while favouring safe haven bonds and the yen.

TOP NEWS

ALERT: L&T Finance Holdings: As part of restructuring of its business, L&T Fin Holdings is looking at selling its portfolio of private equity investments that would free up capital of close to Rs1000 crore and boost its core lending business – Positive

KEC International could buy stake into Jyoti Structures post fallout of its talk with Middle East based Amin Group – Positive for Jyoti Structure
Jyoti Structure has been looking for strategic and/or financial investor post default on its loans worth Rs2,000 crore. It was in talks with Amin Group that seems to have not worked out; thereby leaving scope for KEC International to strengthen its position in transmission tower segment by buying into Jyoti Structures. The move could trigger open offer in Jyoti Structures at higher than market price. Sentiments on KEC International counter would depend upon the valuations of acquisition (though it is strategically quite positive for KEC International).

ONGC divestment on the cards - hangover on the stock in near term.
The government is re-evaluating the sale of a 5% stake in ONGC now. As per media report, the sale could take place in Q3FY2017 as this issue has the approval of the Cabinet. At current prices, the stake sale could fetch the government in excess of R11,000 crore but this would be a hangover on the stock in near term.
  
Suven Life Sciences gets 2 product patents for CNS molecules – positive read through for the stock
Suven Life Sciences has been granted two product patents, one each in India and Japan, for the molecules to be developed for the treatment of neuro-degenerative diseases. With these new patents, Suven has 19 granted patents from India and 19 from Japan. Products out of these inventions may be out-licensed at various phases of clinical development like in phase-I or phase-II.
  
FUND RAISING

Mahindra & Mahindra will raise Rs 475 crore through issuance of non-convertible debentures (NCD) on private placement basis.


OTHER NEWS

Vardhman Textiles to use stake-sale cash to reward investors through Buyback, robust expansion plan of Rs1,400rore – positive read through for the stock (debt:equity ratio has to be keenly monitored)
Vardhman Textiles is in focus to improve its growth prospects and achieve better returns in long run after its recent announcement of a proposal to buy back 9.63 per cent of share capital amounting to about Rs720 crore. The promoters will fully participate in the buyback as they don’t want their shareholding to fall below 60 per cent. The company has a capex plan of Rs1,200-1,400 crore, in addition to the Rs1,000 crore already underway. The company recently sold 40% of one of its stake in Vardhaman Yarn & Threads (VYTL) (a JV) to A&E global that had brought in Rs430crore to the company. The net debt-equity in the company as on March 31 was about 0.35. After this buyback the net debt-equity to be 0.6-0.7X by the end of FY17.

Finolex Cables Ltd would launch new electric water heaters from 1st October 2016; we believe it will go very well in the existing distribution channel and could add meaningful revenue for the company; positive

State Bank of India: State Bank of Travancore, State Bank of Mysore and State Bank of Bikaner approve merger with SBI – Neutral

Hero MotoCorp launches next generation Achiever 150 motorcycle to boost sales in the premium segment; positive read thru
Hero MotoCorp launched next generation Achiever 150 motorcycle priced at Rs 62,800 for the Disc variant and Rs 61,800 for the Drum variant (all ex-showroom, Delhi). Acheiver’s engine produces a maximum power output of 13.6 PS (10kW) @8000 rpm and maximum torque of 12.8'm @5000rpm. Hero Motocorp being the dominant market leader in both 100CC and 125CC segments in the domestic market, is now looking at expanding presence in the premium segments as well and the new Achiever 150 is a move in that direction.

Bank of India (BoI) sells 18% stake in insurance JV to partner Dai-ichi Life post which BoI’s shareholding in the JV stands at 30% - Neutral as deal had been finalized few months back while the transaction was completed yesterday.

Indoco Remedies had USFDA inspection at the Company's Goa Plant II from August 31, 2016 to September 04, 2016. The injectable ANDA filings triggered this inspection. At the end of the inspection, six 483s were issued. All the observations(483s) are correctable and the Company expects to complete the corrective and preventive actions within a period of 30 days. None of the 483s are related to Data Integrity issue – Sentimentally negative for Indoco.

STOCK IN NEWS

2. Zee Group likely to acquire TV9
3. Flipkart pushes logistics arm in festive season
4. Bandhan Bank now has fourth largest debit card base in pvt sector
5. Taj doesn't have automatic right of renewal: NDMC
6. Indian Oil, US trade agency to jointly explore cleaner fuels
7. Vodafone expands 3G network service in MP, Chhattisgarh
8. BOI sells 18% stake in insurance JV to partner Dai-ichi Life
9. Pfizer concludes Rs 110 crore deal with Piramal Enterprises
10. NTPC to raise $500-700 mln in new Masala bonds
11. Hero launches new Achiever 150 priced up to Rs 62,800
12. Mahindra & Mahindra to mobilise Rs 475 crore via NCDs
13. Indiabulls Housing Finance to raise up to Rs 7,000 crore via NCDs

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