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Tuesday, 29 November 2016

29 November 2016 - Views & News

MARKET INSIGHT

Markets are likely to open weak. The short to medium-term trend remains bearish, as Nifty continues to form lower top, lower bottom. 8257 – 8337 retracement levels should be seen as a selling opportunity. On the downside, 8066 – 7974 will act as support in the near term.

Nifty Spot Levels

Support 8066 – 7974 - 7916
Resistance 8177 – 8257 - 8337

GLOBAL MARKET UPDATE:

US stocks declined on Monday for their worst performance in nearly a month, weighed down by a pullback in the financial and consumer discretionary sectors as some investors booked profits on the heels of a record-setting week.
The Dow Jones industrial average fell 54.24 points, or 0.28 percent, to 19,097.9, the S&P 500 lost 11.63 points, or 0.53 percent, to 2,201.72 and the Nasdaq Composite dropped 30.11 points, or 0.56 percent, to 5,368.81.
Asia markets were mixed on Tuesday, taking cues from the US where a post-election rally appeared to stumble.

Results Today: 

Kanoria Chemicals, National Fertilisers, TNPL, Tata Power

TOP NEWS

Tata Steel, Liberty House sign LoI for UK specialty steel biz:  Long awaited finally deal close, sentimentally positive
Tata Steel   has signed a letter of intent (LoI) with Liberty House to sell its UK speciality steel business, the company said in a statement on Monday. The deal, which also covers several South-Yorkshire based assets, is being pegged at an enterprise value of £100 million. The announcement is in line with Tata Steel’s overall restructuring strategy of its UK portfolio. The letter gives Liberty House the right to enter into exclusive negotiations for the potential sale of steel assets.

Sun Pharma launches its first branded ophthalmic product BromSite in USA; BromSite launch is a significant milestone for Sun Pharma in USA; BromSite is the first NSAID approved by the USFDA for prevention of ocular pain & treatment of inflammation following cataract surgery; product will be marketed by Sun Ophthalmics and a dedicated marketing & sales team is set up for optimal customer service – Positive for Sun Pharma.

Aurobindo gets USFDA approval for Nevirapine tablets; used to treat HIV infection – Positive for Aurobindo

Pfizer to discontinue manufacturing of current corex cough syrup formulation (which is 245 crore brand) – Short term negative for Pfizer; company however will launch additional products as line extensions under Corex brand name from Dec 2016……………….(details in other news)

Idea Cellular plans to sell 100% in tower arm for $1 bn, potentially positive
As per media sources, Idea Cellular plans to sell 100% stake in its tower arm. The company is looking to sell 11,000 telecom towers for close to $1 billion. Idea Cellular has reached out to America Tower Corp, Bharti Infratel and Brookfield for tower sale.

PVR promoters’ profit-sharing deal with PEs under Sebi lens, may face penalty

Banco Products, A meeting of the board of directors is scheduled on 8th December 2016 to consider Buy back of equity shares.

 OTHER NEWS

State Bank of India: S&P retains credit ratings, stable outlook – Sentimentally positive
Expecting SBI to perform better than its peers, global rating agency S&P has retained its long-term rating (BBB-) as well as short-term ratings (A-3) on the bank with a stable outlook. The affirmed rating on SBI indicates its strong market leadership, supported by a strong domestic franchise and high customer confidence. 

Pfizer to discontinue manufacturing of current corex cough syrup formulation (which is 245 crore brand) – Short term negative for Pfizer; company however will launch additional products as line extensions under Corex brand name from Dec 2016.
Pfizer has undertaken a comprehensive review of its respiratory offerings in order to better cover a broader range of indications through an expanded product portfolio. As a result of this review, the Company will launch additional products while it may also discontinue the manufacture of certain SKUs where needed. The Company will be launching a series of products as line extensions under the Corex brand name, starting with the first launch in December, 2016 and subsequent launches over the next year. The Company has also decided to discontinue the manufacturing of the current Corex Cough Syrup formulation (Codeine Phosphate 10mg + Chlorpheniramine Maleate 4mg). It may be noted that Corex Cough Syrup recorded a sale of Rs.244.48 Crores for the financial year ended March 31, 2016.

Shilpa Medicare to have a board meeting on Dec 1, 2016 to consider issue of Equity shares or convertible securities on preferential basis, to fund future capex. Details and pricing shall be announced on Dec1.2016.

Government implements strict overloading norms for CVs; resulting into shift towards heavy vehicles; positive for heavy truck makers such as Ashok Leyland and Tata Motors  
Government is strictly implementing the rules on rated load — the load a machine is designed to carry — and those failing to conform face heavy penalties. In a notification dated December 31, 2015, the government directed toll plaza operators to tow away overloaded vehicles and hold them in a parking spot until proof is furnished on payment of penalty at 10 times the normal fee. The vehicle operators will also have to remove the excess load, as well as pay heavy towing and parking fees. As a result, the transportation industry is shifting fast towards 37-tonne and 49-tonne haulers from 25-tonne trucks. Sales of 25-tonne trucks have nearly halved in the first seven months of this fiscal year (April 2016 to October 2016), while those of heavy duty tippers and tractor-trailers increased 32% and 6%, respectively. The move is positive for CV players having higher mix of heavy vehicles such as Ashok Leyland and Tata Motors.  

Truck and bus radial tyre imports surge 30% in H1FY2017; negative read thru for tyre companies (Apollo Tyres, MRF, JK Tyres)  
Truck and bus radial tyres (TBR) import surged nearly 30% in the H1FY2017. The tyre imports largely from China continue to gain market share from the domestic tyre players viz MRF, Apollo Tyres and JK Tyres particularly in the replacement market. Currently, more than 40% of the replacement demand in TBR is being met by imports. China dominates as the source country for import of TBR in India with a share of 94 per cent in 2016-17. Given the rising imports, ATMA (the tyre manufacturers body) has asked the government to impose anti-dumping duty on imports from China.

Bajaj Auto plans slew of new product launches to gain markets share
Bajaj Auto will launch the new 400cc motorcycle in mid-December priced between Rs 1-2 lakhs and will compete with Royal Enfield. In addition to the domestic markets the company plans to target other markets including Thailand, Malaysia, Indonesia and the Philippines in ASEAN as well as Mexico, Colombia and Argentina in South America. Along with the new 400 cc bike, the company has lined up other launches including new bike from the ‘V’ platform and a  new family of Pulsars for 2017, which will help the company augments its market share in the motorcycle space.

Peter England aims Rs 1,600 crore sales by FY 2020-21 – positive read thru for Aditya Birla Fashion & Retail
Aditya Birla Fashion and Retail's clothing brand Peter England aims a turnover of Rs 1,600 crore in the next four years on the back of expansion in sales network and growth in online sales. Besides, Peter England plans to foray into South Asian markets such as Indonesia, Malaysia and Singapore. As part of expansion plans, the brand has plans to add 250 exclusive outlets in the next three years, taking the total number of such outlets to around 1,000. In the next 3-5 years, the brand will continue to grow as the organised sector is very small in India and there is large scope for the branded garment.

Suzlon Energy wins 50.4MW wind power project in Andhra Pradesh. The project consists of 24 units of S95 90m tubular tower with rated capacity of 2.1 MW and is schedule for completion in March 2017; Positive  

Idea Cellular plans to sell 100% in tower arm for $1 bn, potentially  positive
As per media sources, Idea Cellular plans to sell 100% stake in its tower arm. The company is looking to sell 11,000 telecom towers for close to $1 billion. Idea Cellular has reached out to America Tower Corp, Bharti Infratel and Brookfield for tower sale. Telco companies are likely to sell-off tower assets and use the proceeds to pump up telecom operations, repay debt or fund expansion and network rollout.

PVR promoters’ profit-sharing deal with PEs under Sebi lens, may face penalty
The Securities and Exchange Board of India (Sebi) has asked PVR Ltd to explain a profit-sharing deal struck by its promoters with private equity investors that was not disclosed to its shareholders. The show cause notice pointed to violation of two norms: one related to a code of conduct for all board members and senior management, and the second, disclosure of events and information which are material. The consequence of such a move could mean that PVR may face a monetary penalty and would need to disclose the terms of the PE agreement to all stakeholders and take their nod.

Infosys looks to take payments bank solution global
Infosys has built a smaller version of its core banking solution Finacle that focuses on automation and analytics, which it is offering to small banks and payments banks in India, and plans to take the service to its global customers in the US and Europe.

The India Cements: COMPAT grants stay on CCI’s penalty of Rs187 crore (related to cartelization) – Positive read thru for the stock
The Competition Appellate Tribunal (COMPAT) granted stay against the order of Competition Commission of India (CCI) imposing a penalty of Rs187.48 crore on condition that the company shall deposit 10% of the penalty in the Registry of the Tribunal in the form of fixed deposit of six months duration within one month from the date of its order. The development is positive read thru for India Cements.

Reliance Jio crosses 50 million subscribers 
As per the media reports, Reliance JIO has added 50m subscribers as on 26th November-2016, which translates into 6lakh subscribers per day. We highlight here that currently RJIO is providing free voice and data services and thus retention of customers willing to pay for its 4G services would be a crucial for the profitability of RJIO.   
  
MORE NEWS

Get rural atms running on priority, orders RBI
Mistry meets top MFs, insurance company executives
Lawmaker suggests alliance of India, US, Russia,Japan
50% tax on unaccounted deposits; 85% if caught
Morgan Stanley lowers India’s growth forecast
Oil falls over doubts over planned crude output cut
I-T dept won't ask for bank deposits' source: Adhia
CRR hurdle for lending rate cut
Essel Group's growing appetite for acquisitions
RBI relaxes cash withdrawal rule
Economy grew 7.1% in first half: Sitharaman
India imports 17.2 lakh tonnes of wheat this year
Renew lapsed policy faster through self-inspection
Infosys looks to take payments bank solution global
Appellate Tribunal stays CCI order against India Cements
Oil India Q2 profit dips 18%; declares 1:3 bonus 
RBI hikes cash reserve ratio; maintains sanctity of its policy rate
Venture debt comes of age in India, at long last
Govt removes excise duty on POS machine manufacturing
Suzlon bags 50.4-MW project in AP
Dollar, US bond yields drop as oil tumbles on doubts over output cut
Tata Sons asks Nusli Wadia to withdraw legal notice
Govt unveils National Software Policy, eyes 3.5 million jobs by 2025
Supreme Court tells Sahara chief Subrata Roy to deposit Rs600 crore by 6 February
Tata Steel, Liberty set to begin talks for UK assets sale
Ajay Kanwal, Standard Chartered’s Asean CEO, resigns over disclosure lapse
EPFO to seed Aadhaar in 81 million PF accounts by 31 Dec
BSE Sensex back on track to finish at 26,316.34, NSE Nifty settles at 8,114.30
Edelweiss AMC buys fund biz of JP Morgan Asset
RJio files complaint with CCI against Airtel, Vodafone and Idea
Dollar retreats from peaks, euro boosted by Fillon win
Maruti Suzuki stops Ritz's production
Switch to e-payment at the earliest, Centre tells ULBs
Early Budget to help kick-start projects from Apr 1: Nirmala
Tata Sons' shareholders discord may hit group cos: S&P
Odisha land reserved for Posco might go to JSW
Demonetisation: PM Modi to hold meeting with senior ministers
Farm, commerce ministries want to dump rubber board

STOCK IN NEWS

1. JSW Steel joins bid to buy Italy's Ilva plant: Source
2. Flipkart's losses double to Rs 2,306 crore in FY16
3. Reliance Jio files complaint with CCI against telcos
4. HUL said that its near-term performance was under pressure due to the government’s decision to demonetise high-value currency notes. It, however, did not give any figures.
5. S&P rules out rating upgrade for SBI in 18-24 months
6. Fearing tighter US visa regime, Indian IT firms rush to hire, acquire
7. Tatas asks Nusli Wadia to withdraw legal notice
8. Tatas, Liberty House in talks for UK speciality steel unit sale
9. Reliance Jio crosses 50 million subscriber mark in 83 days
10. Infosys looks to take payments bank solution global
11. Appellate Tribunal stays CCI order against India Cements
12. Adani Group to ramp up Dhamra Port capacity to 300 million tonnes
13. IT industry to clock $350 bn revenue before 2025: Nasscom
14. Tata Elxsi plans to drive growth through acquisitions 

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