}

Friday, 30 December 2016

30 December 2016 - Views & News

MARKET INSIGHT

Markets are likely to open positive. Nifty is currently facing resistance at 8111, which is also its 20 DMA. But, if it sustains above 8111, then we may see the pull-back extended to 8150-8190. Support on the way down is at 8050-8030 levels.

Nifty Spot Levels

Support 8050 – 7992 – 7940
Resistance 8130 – 8155 - 8190

GLOBAL MARKET & INTERNATIONAL DATA UPDATE 

• Wall Street ended slightly lower on Thursday, held down by bank shares in quiet holiday trading as traders looked to position for the new year.
• U.S. Treasury yields fell across the curve as investors bought safe-haven government debt after a strong seven-year note auction.
• The Dow Jones Industrial Average fell 13.9 points, or 0.07 percent, to 19,819.78.

TOP NEWS

Sun Pharma: Company’s management has clarified that a fire broke out at Sun Pharma’s Ahmednagar factory during excavation work, causing burn injuries to four workmen at the excavation site. Two of the injured workmen succumbed to burn injuries and other two are being treated at the Hospital – sentimentally negative; there is no loss of production at Ahmednagar factory on account of this incident.

Aurobindo Pharma gets USFDA approval for Ziprasidone Hydrochloride (used to treat schizophrenia and depression) & Indomethacin Capsules (used to treat pain) – Positive for Aurobindo

Natco Pharma: As per media reports, Natco pharma’s formulation facility at Kothur is likely to be inspected by USFDA between 16-24 Jan 2017, Kothur plant was inspected last in March 2016 (and EIR was received in Aug 2016); Stock to remain in focus

Sugar - The Union finance ministry is considering a proposal to restructure sugar mills’ debt, which is under severe stress due to lack of capacity utilization – positive for highly leveraged small sugar mills and sugar companies such as Bajaj Hindustan, while Balrampur Chini Mills and  Dhampur sugar has relatively lesser stressed balance sheet with reducing debt position (sentimentally positive for both the companies) 

Petronet and Petrobangla have signed an initial agreement to set up an LNG re-gasification terminal on Kutubdia Island and a pipeline at an estimated cost of $950million and terminal capacity of 7.5mtpa. The project is expected to get completed in four years time. Positive for the stock 

 OTHER NEWS

Maruti Suzuki to replace Dzire Tour with a stripped down version for the fleet segment
Maruti Suzuki is planning to discontinue the Dzire Tour production as per media sources. The company is expected to stop the production of Dzire Tour by March 2017. Dzire Tour is a stripped down variant of the previous Dzire and is used for the fleet segment exclusively. To replace the Dzire Tour the manufacturer will introduce a stripped down version of the present Dzire for its fleet segment. Swift Dzire might receive an SHVS ( Smart Hybrid Vehicle by Suzuki) technology too.

GE Power bags Rs271 cr order from BHEL for components, postive read-thru
GE Power India has been awarded a contract worth approximately INR 2711 million (i.e. approximately US $ 40 million) by Bharat Heavy Electricals Limited (BHEL) to supply components and services for the supercritical steam generator island packages for 2x800 MW coal-based Uppur Thermal Power Project (contract value approximately INR 1626 million) and 1x800MW coal-based North Chennai Supercritical Thermal Power Project Stage-III (contract value approximately INR 1085 million). Both the thermal power projects are located in the southern state of Tamil Nadu. This is in line with the government's focus on upgrading the power infrastructure in the country.

Jagran Prakashan board meet on Jan 5  to consider buy back

RS Software has announced that the company has made further investment of Rs 5,90,00,000 in Paypermint Private Limited, its wholly owned subsidiary for allotment of 59,00,000 equity shares of 10 each.

Shree Cement to construct 5mtpa cement plant in West Bengal at capex of Rs600crore – positive read through for the stock
As per the media reports, Shree Cement is planning to build a 5mtpa cement plant and a 20MW captive power plant at Parbatpur and Digha (West Bengal) at an estimates capex of Rs 600crore. The project is waiting for environmental clearance and Pollution Control Board approval and is expected to get completed in 20-24 months.

Ultratech to expand Chittorgarh limestone mine to 13.2mtpa from 10mtpa - positive read through for the stock 
As per the media reports, Ultratech Cement, is planning to expand its Aditya limestone mining project at Chittorgarh in Rajasthan from 10mtpa to 13.2mtpa. The company has proposed expansion of clinker production capacity from 8.4mtpa to 8.9mtpa at Chittorgarh.

 MORE NEWS

Govt's indirect tax kitty swells over 23% in Nov
Giants bring in investments worth Rs 3.30Lcr in telecom
Telecom vendors bet on India amid global downturn
Money supply not enough: Banks to government
Private equity players may flock to real estate mkt
Reliance Jio justifies free call, data offer to Trai
Bank credit growth continued to decline in H1
Note ban can transform economy: RBI
Corporate India's financial position remains weak
ONGC cleared GSPC deal without enough independent directors
Fin Ministry considering debt restructuring for sugar sector
Fairfax gets RBI nod to acquire 51% in Catholic Syrian Bank
Banks face significant stress, but stable overall: RBI
Tatas to Mistry: return all ‘confidential’ papers
Ambuja Cement, ICICI Bank enter into partnership to boost cashless trade
RIL commissions paraxylene plant at Jamnagar complex
Change in fiscal year cycle unlikely before 2018
SEBI launches prosecution in 568 CIS cases, 1,100 others
Cash withdrawal limits to be rolled back in phases
Move over 4G, IoT and 5G will be the flavour of 2017: Trai chairman
Myntra’s app-only move slowed down FY16 sales growth
Prem Watsa’s Fairfax takeover bid for CSB gets RBI approval
Aditya Birla Idea Payments Bank to launch in first half of 2017
RBI moots an ombudsman for NBFCs
M Venkaiah Naidu dismisses reports India lobbied for better ratings
Markets settle with decent gains on expiry day; Sensex soars 155.47 pts
Solar power, green corridor blip on energy radar for 2017
Govt proposes setting up Financial Data Management Centre
Pay to rise for millions as 19 states increase minimum wage
RBI says no to RTI query on note ban
Chana the bad apple in bunch of cheap pulses
Algo glitch may mar NSE IPO
Market likely to overcome DeMo impact in 2017
Jaitley sings paeans to economy as note ban ends
NSE extends concessional transaction fee in equity derivative

STOCK IN NEWS

1. Giants bring in investments worth Rs 3.30Lcr in telecom
2. Reliance Jio justifies free call, data offer to Trai
3. Bank credit growth continued to decline in H1
4. ONGC cleared GSPC deal without enough independent directors
5. Fin Ministry considering debt restructuring for sugar sector
6. Fairfax gets RBI nod to acquire 51% in Catholic Syrian Bank
7. Tatas to Mistry: return all ‘confidential’ papers
8. Ambuja Cement, ICICI Bank enter into partnership to boost cashless trade
9. RIL commissions paraxylene plant at Jamnagar complex
10. SEBI launches prosecution in 568 CIS cases, 1,100 others
11. Move over 4G, IoT and 5G will be the flavour of 2017: Trai chairman
12. Aditya Birla Idea Payments Bank to launch in first half of 2017
13. RBI says no to RTI query on note ban
14. NSE extends concessional transaction fee in equity derivatives

Thursday, 29 December 2016

29 December 2016 - Views & News

MARKET INSIGHT

Markets are likely to open on weak note and can remain volatile due to scheduled expiry in derivatives. Intraday resistance will be 8040-8100 and the support levels on the way down are 8020-7970. However, as long as the Index trades below 8275, the current pull-back will turn out to be just a counter-trend rally. The bears will be back in action if the Nifty breaks down below the low of 7893.

Nifty Spot Levels

Support 7992 – 7940 - 7893
Resistance 8084 – 8130 - 8155

GLOBAL MARKET & INTERNATIONAL DATA UPDATE 

• US stocks fell in low volume on Wednesday in a broad decline triggered in part by a sharp drop in home resales. 
• Contracts to buy previously-owned US homes fell in November to their lowest level in nearly a year, a sign that rising interest rates could be weighing on the housing market.
• The Dow Jones Industrial Average fell 111.36 points, or 0.56 percent, to 19,833.68

TOP NEWS

Banking Sector – RBI extends loan repayment window by another 30 days for loans up to Rs 1 crore – Positive read thru
In addition to 60 day grace period provided by RBI (on 21st November 2016) for repayments of loans up to Rs 1 crore, it has further been decided by RBI to give additional 30 days for repayment of such loans taking the total grace period to 90 days.

NSE files IPO draft papers with  Sebi, existing shareholders may offer 20-25% shares to public for estimated Rs 10,000 crore. Postive read-thru for IFCI (Hold 4.4% stake in NSE along with associate company)

Cadila acquire’s six brands (Deca-Durabolin, Durabolin, Sustanon, Multiload, Sicastat and Axeten) from Indian unit of  Merck Sharpe and Dohme (MSD) for an undisclosed amount – Positive for Cadila; acquisition will strengthen Cadila’s portfolio in key segments like wound management and cardiovascular therapies.

JMC Projects, secures new orders worth over Rs 1,457 crore, positive read-thru (also positive for Kalpataru Power Transmission)

Reliance communication: Minority shareholders demands company to buyback their stake, some PE and Hedgefunds unhappy with Brookfield deal, stock to remain in focus 
OTHER NEWS

Hindustan Unilever launching a bouquet of Ayurvedic products to counter Patanjali and try to grab a space for himself in emerging Ayurvedic product segment – positive for HUL
Hindustan Unilever (HUL), is launching around 20 products — toothpaste and skin cream to soaps and shampoos — under its existing Ayurveda brand Ayush. Ayush was launched in 2001 as a premium brand but had lost momentum by 2007. Now, the positioning will be mass market — price points between Rs 30 and Rs 130. HUL's personal care business accounts for nearly half its sales and 60% profits, mainly due to a large portfolio of premium products. Herbal products account for 6-7% of HUL's personal products segment. But growth in this sub-segment is twice as fast as the segment average.

TVS Motors gets patent for auto hybrid transmission system; positive read thru

TVS Motor Co has been granted an Indian patent for automatic hybrid transmission (AHT) system for two-wheelers. The invention is related to a system involving a combination of a fixed speed transmission mechanism (FSTM) and a continuously variable transmission mechanism (CVTM). Due to design constraints, the transmission system of current two-wheelers provide only with the CVTM which cannot be transformed into a hybrid transmission system. A hybrid system would ensure high transmission efficiency at all operating speeds. Positive.

Ashok Leyland has launched the Oyster brand of bus (with a seating capacity of 33 people) in the Saudi Arabia markets. This is the 3rd product launch by the company in the Saudi markets.  Positive

Tata Motors to launch a new compact sedan – Kite 5 based on the successful Tiago platform. Positive read thru
Tata Motors plans to launch the new compact sedan – Kite 5 based on the Tiago’s platform by February / March 2017. The car is likely to be priced between Rs 4.5 to Rs 5.5 lakhs (ex showroom Delhi) and would be offered in both 1.2 litre petrol and a 1.05 litre diesel engine. Kite5 is likely to garner encouraging response given the strong sales of Tiagio (Tiago monthly sales stand at about 6000 units)

IRB Infrastructure: The company receives Letter of Award for Kishangarh to Gulabpura project (had already announced preferred bidder for project on 9 Dec) – Neutral for the stock
The company has received Letter of Award from NHAI for 6 laning of 90kms Kishangarh to Gulabpura section of NH 79A and NH79 in Rajasthan on Toll basis. The estimated project cost is Rs1530 crores while the company has offered premium of Rs186.3 crore. The concession period of the project is 20 years including construction period of 910 days. The company had already announced that it has emerged as the preferred bidder for the said project on 9th December. The development is neutral read thru for the stock.

Dilip Buildcon – upgradation of rating of bank loan (long term and short term) – positive read thru for the stock
India Rating & Research has upgraded the Company's long term Issuer rating and the Long Term rating on its Bank Facilities to ‘IND A' from IND A-'. The Outlook is Stable. The agency has also upgraded the short term rating on DBL's bank facilities to ‘IND A1 from 'INDA2+'.

RIL commissions new PX plant with capacity of 2.2mtpa
Reliance Industries commissioned first phase of its paraxylene (PX) plant at Jamnagar in the state of Gujarat. With the commissioning of plant, RIL’s PX capacity would double to 4.2mtpa (vs 2mtpa currently) and the company would become world’s second largest PX producer (9% share in global PX capacity and 11% share in global PX production).    

Sasken Communication:  Company has fixed January 06, 2017 as the record date for the purpose of buy-back of equity shares
The company has proposed to buy back 29,27,879 equity shares having face value of Rs 10 each at a price of Rs 410 per share (CMP of Rs400) in cash for a total consideration not exceeding Rs 120 crore

JMC Projects, secures new orders worth over Rs 1,457 crore, positive read-thru (also positive for Kalpataru Power Transmission)
JMC Projects has bagged new construction projects worth over Rs 1,457 crore.The company has bagged Rs 454 crore shipyard modernisation project in Goa, Rs 446 crore flyover project in Maharashtra, Rs 282 crore commercial project in Hyderabad, Rs 224 crore residential project in Bangalore, JMC Projects (India) Ltd said in a filing to BSE.The company also bagged educational building project worth Rs 51 crore in Amravati, Andhra Pradesh.

Goa Carbon,  Bilaspur Plant in Chhattisgarh commenced operations from December 27

Pratibha Industries, board to meet on January 04, 2017 to approve the issue and allotment of shares on preferential basis to the lenders of the company under strategic debt restructuring (SDR) scheme.

Reliance communication: Minority shareholders demands company to buyback their stake, some PE and Hedgefunds unhappy with Brookfield deal
As per media reports, a group of private equity (PE) and hedge funds representing minority shareholders of Reliance Infratel Ltd, the telecom tower arm Reliance Communications Ltd (RCom), have demanded that RCom buy their stakes back before going ahead with its majority stake sale to Brookfield Infrastructure Group.The PE funds have invoked a shareholder agreement under which RCom is obliged to buy their stakes back and also seek their approval before a majority stake sale in Reliance Infratel.

IDFC Bank to merge lending divisions, long term postive 
IDFC Bank is planning to merge various lending divisions and  reduce headcount. The bank plans to merge corporate lending and middle market corporate lending into a single division while SME (small, medium enterprises) lending and business banking will also be merged into another division.

STOCK IN NEWS

1. IRB Infrastructure gets LoA from NHAI for project worth Rs 1530 crore 
2. Vindhya Telelink board meeting on January to consider issue of NCDs up to Rs 150 crore
3. JK Tyre approved fund raising up to Rs 1000 crore 
4. Pratibha Industries board meeting on January 4, 2017 to consider issue of shares to lenders under SDR 
5. JMC Projects bags orders in excess of Rs 1457 crore 
6. Sasta Sundar Ventures board meeting on January 5, 2017 to consider merger of certain subsidiaries 
7. Phoenix Mills acquired additional 8.72 percent stake in Island Star Developers 
8. Suyog Telematics gets letter of acceptance from MSRDC for installing BTS equipment on poles along Bandra Worli sea link 
9. Sterlite Technologies aims to more than double order book in 2017 
10. Tata Steel seeks foreign investment for Odisha SEZ Project 
11. Highway Developers cabinet to finalise ways to compensate highway operators for loss of toll
12. FICV order Uncertainty continues; govt undecided over number of development authorities 
13. TVS Motor gets patent for hybrid transmission system

Wednesday, 28 December 2016

28 December 2016 - Views & News

MARKET INSIGHT

 Indian markets are likely to open on flattish note. The Nifty has seen a sharp pull-back yesterday. It has currently retraced 38.2% of the recent fall. The pull-back can extend up to 8084-8130 (50% and 61.8% retracement levels, respectively), if it manages to sustain above 8050.     
      
Nifty Spot Levels

Support 7992 – 7940 – 7893
Resistance 8040 – 8130 - 8155

 Market Update:

Sgx Nifty +14 pts ‎Dow +11.23 pts ,Nsdq +24.75 pts , S&P +5.09 pts , Bovespa +76 pts , Ftse Clsd , Dax +22 pts  , Cac +8 pts , Nikkei  -26 pts now , Crude @ $53.85 brl (-0.05 ), Brent @ $56.09 brl (+0.93) , Gold @ $1139.90 (+1.10), Silver @ $16.00 (+0.01), Euro @ $1.0458, JPY @ $117.4900, INR @ $68.0575


GLOBAL MARKET & INTERNATIONAL DATA UPDATE 

 • US stocks rose slightly on Tuesday, supported by upbeat consumer and housing data, with gains in technology shares lifting the Nasdaq Composite to a record close.
• Tuesday data showed American consumers' confidence shot to its highest in more than 15 years in December as they saw more strength ahead in business conditions, stock prices and the job market, while house prices continued their steady recovery in October.
• The Dow Jones Industrial Average rose 11.23 points, or 0.06 percent, to 19,945.04.

TOP NEWS

Cadila: As per media reports, Cadila’s  discovery arm (Zydus Discovery DMCC) has received warning letter from the USFDA over promotional video misbranding Saroglitazar (Lipaglyn – used to treat diabetes  and cholesterol) – Negative for Cadila; we await management clarification on the issue.

Listing of PSU subsidiaries in FY18 divestment plan, Both ONGC and Coal India have profitable subsidiaries, stock to remain in focus
As per media reports, Strategic sales and listing of subsidiaries of state-run enterprises will be the focus areas of the government’s disinvestment plan for the next fiscal, shifting away from the sale of shares in listed companies. There is also an indication that the government may not push ahead with disinvestment in the current situation as revenue collection seems comfortable with black money disclosures schemes likely to provide some cushion. 

SBI: Demonetization set to delay SBI-associate bank merger , beyond March 2017 deadline, sentimentally negative …………….(8:52 am)
As per media news, demonetization set to delay SBI-Associate bank merger further, merger may start Fy18 Vs Feb-Mar 2017 earlier


 FUND RASING

JSW Energy board approves raising up to Rs 750 crore.

JK Tyre & Industries Ltd is considering raising upto Rs 1,000 cr by issue of convertible/non-convertible securities


OTHER NEWS

Vardhman Textiles to Buyback 62.6 lakh shares at Rs. 1,150/share – sentimentally positive for the stock
Vardhman Textiles offers to Buyback 62.6 lakh equity shares at Rs. 1,150/share from 4th Jan 2017-17th Jan 2017. The Buyback price is at a premium of 7% from today’s close of Rs. 1,078, which is positive for Vardhman Textiles.  

TCS: VersaCold Logistics Services Selects TCS TAP™ for Procure to Pay Transformation
Tata Consultancy Services announced that VersaCold Logistics Services, Canada’s largest end-to-end supply chain solutions company for temperature-sensitive products, has selected TAP™, TCS’ procure to pay cloud solution, to manage their operating costs with greater efficiency. The solution includes Catalogs, Requisitions, Purchase Orders, and Invoices, plus Supplier Management and Self-Service.As part of its ongoing transformation as a leading global and Canadian provider of temperature sensitive solutions, VersaCold is investing in providing greater value to its customers, while also focusing on operating efficiency. 

Tata Motors receives order for 5,000 buses under the Governement’s BRTS rollout scheme; positive

Tata Motors has bagged an order for supplying 5,000 buses under the Bus Rapid Transit System (BRTS) scheme. Increased focus by central and state governments on improving the road network and transportation under the BRTS has provided a boost to bus purchases, helping the segment buck the broader demand trend.

Akzo Nobel India opens specialty coatings facility in Noida with an investment of Rs3crore (largely funded through internal accruals); the new site will manufacture 600 kilo litre of coatings annually, thus catering to the localisation drive undertaken by many large companies – positive read through for the stock

Dhanuka Agritech - Buyback committee meeting on Jan 03, 2017
Dhanuka Agritech has informed BSE that a Meeting of Buyback Committee of Board of Directors of the Company will be held on January 03, 2017, inter-alia, to approve the final terms and conditions of Buyback of equity shares of the Company, subject to Shareholders’ approval.

Electrosteel Steels, according to media reports, Piramal Enterprises and the Renaissance Group are considering to jointly purchase a 51 per cent stake in Electrosteel Steels, postive read-thru
Jagran Prakashan, scheme of arrangement of Suvi Info-Management (Indore) with the company has been approved by Allahabad high court and Bombay high court

Sunil Hitech,  awarded road EPC project worth Rs434 crore in Arunachal Pradesh, management has stated that it will bid for projects worth Rs 6,000 crore in remaining fiscal year. Road segment orderbook now at Rs 1,352 crore. Postive read-thru

 MORE NEWS

Govt plans ordinance to shed liability of old notes
Economists suggest lower taxes, uniform import duty
Unorganised sector to be worst-hit by note ban: Report
Adhere to monthly/quarterly expenditure plans: FinMin
Reliance Jio seeks time till Dec 29 to respond to Trai
Tata Sons' notice to Mistry for confidentiality breach 
Last date extended for conversion of PIO cards
Number of companies with 'default' debt rating doubles
Venture capital investments down 29% in 2016
Income tax notices to car dealers; seeks details of customers post Nov 8
Despite price hikes, uncertainty remains high around ITC
Paradip Port to have 51% stake in Rs 5,849 cr rail corridor
Oil prices edge further above $55 ahead of supply cut deal
JSW Energy board approves raising up to Rs 750 crore
Experts discuss about job creation, farm woes at NITI Aayog
83 IPOs hit Indian market, raised $3.8 bn in 2016: EY
Coca-Cola India unveils low-calorie beverage Aquarius
India likely to host key RCEP meeting in July 
Glenmark gets USFDA nod for leukemia treatment drug
MCX zinc moves towards key support zone
Reliance Jio is ready to pounce on rivals Airtel, Vodafone, Idea Cellular
Pfizer, Micromax related acquisitions approved by CCI
Drug firms eye over-the-counter market in bid to buttress growth
AU Financiers gets final licence from RBI to start small finance bank
Nandan Nilekani invests $5 million more in 10i Commerce
Sonalika Tractors in talks to set up a plant in China
Demonetisation has hit business: Tata Steel
Early budget to make funds available at start of fiscal: PM Narendra Modi
Direct benefit transfers saved 36,000 crore in 2 years, says official
Microsoft can reach $1 trillion market value, faster than Apple, Google and Amazon, says Analyst
Smooth drive for farm machinery under GST
M-wallet retail spends may see 4-fold jump in near term: Study
Hopeful about GST regime roll out from April: Anant Kumar
Centre may dust off ONGC stake sale plan
CPSE ETF II on anvil; initial corpus Rs 6,000 cr

STOCK IN NEWS

• Govt plans ordinance to shed liability of old notes
• Economists suggest lower taxes, uniform import duty
• Early budget to make funds available at start of fiscal: PM Narendra Modi
• Unorganised sector to be worst-hit by note ban: Report
• Reliance Jio seeks time till Dec 29 to respond to Trai
• Tata Sons' notice to Mistry for confidentiality breach 
• Number of companies with 'default' debt rating doubles
• Despite price hikes, uncertainty remains high around ITC
• Paradip Port to have 51% stake in Rs 5,849 cr rail corridor
• Oil prices edge further above $55 ahead of supply cut deal
• JSW Energy board approves raising up to Rs 750 crore
• Pfizer, Micromax related acquisitions approved by CCI
• Demonetisation has hit business: Tata Steel

Tuesday, 27 December 2016

27 December 2016 - Views & News

MARKET INSIGHT

Nifty is likely to open on a flattish note based on the global cues as most major markets were closed on Monday for Christmas holidays. Support for the day is placed at 7890 levels.

Nifty Spot Levels

Support 7890 – 7810
Resistance 7952 - 8022

Market Update:

Sgx Nifty +17 pts ‎US Mkt Clsd , Bovespa +683 pts , Ftse Clsd , Dax Clsd  , Cac Clsd , Nikkei  +1 pts now , Crude @ $53.24 brl (+0.22 ), Brent @ $55.16 brl (+0.11) , Gold @ $1135.30 (+1.70), Silver @ $15.85 (+0.08), Euro @ $1.0452, JPY @ $117.2000, INR @ $67.7363


GLOBAL MARKET & INTERNATIONAL DATA UPDATE 

• US markets were closed on Monday on occasion of Christmas.
• Asian stocks were little changed on Tuesday, in thin trade and with little to guide them as most major markets were closed on Monday for Christmas holidays, while the dollar reclaimed some of its losses from Monday.

Today's Corporate Action 27th Dec  Ex Date

GULPOLY  Stock  Split From Rs.5/- to Rs.1/-
TOP NEWS

Reliance Industries: The telecommunications regulator has asked subsidiary Reliance Jio Infocomm to explain why extension of free voice and data plan should not seen as violation of the rule that promotional offers be limited to 90 days – Sentimentally negative

Alert: Orbit Exports’ board of directors has approved a proposal to issue one bonus share for every share held in the company and also approved reappointment of Pankaj Seth as Managing Director and Chief Executive Officer and Anisha Seth as whole-time director – Sentimentally positive for the stock

Lupin gets USFDA approval for Olmesartan medoxomil tablets, used to treat hypertension – Positive for Lupin

Glenmark gets USFDA approval for tretinoin oral capsules; used to treat leukemia – Positive for Glenmark

Two wheeler sales to decline 15% in December 2016 on weak demand due to demonetization; Major players plan extended plant shut for maintenance, negative for HeroMotocorp, TVS Motor and Bajaj Auto
Given the weak demand due to demonetisation, 2W industry expects sales to drop 15% yoy in month of December.  The situation is worse than November which saw volumes dip by 6%. Major players have planned extended maintainence shutdowns (ranging from 2 to 10 days) to align production with demand.  Hero MotoCorp and TVS  Motors will observe the week-long scheduled production holiday. Honda Motorcycles and Scooters India will observe the longest shutdown period stretching for 10 days. Bajaj Auto will close production operations for two days this week. 

Banking sector: RBI Provides 60-Day Grace Period For Farmers’ Interest Subvention Scheme - positive read through
Reserve Bank of India has allowed that farmers will get a 60-day grace period on loan repayments to be eligible for the government’s interest rate subvention scheme on short-term crop loans taking in account the issues faced due to non availability Of cash. Under the scheme, farmers who repay their loans promptly are eligible for an additional interest subvention of 3% over and above a 2 % subvention available to all farmers.

Shilpa Medicare allots 30.25 lakh shares (~4% stake) to US based private equity fund TA Associates for Rs 570 per share (21.5% discount to closing price on 26 Dec 2016) i.e. ~ Rs 175 crores for the stake. Shilpa Medicare manufactures active pharmaceutical ingredients for drugs used in cancer treatment – Positive for Shilpa Medicare

FUND RAISING:

Jubilant life science shareholder give approval for proposed NCD issue.

OTHER NEWS

L&T wins order worth Rs3039 crore across segments; positive
·         Water treatment- Rs1422 crore EPC order
·         Power T&D- Rs1036 crore electrification order
·         Civil Infra- Rs359 crore EPC order from Inland waterways  
·         Material Handling- supply, erection and commissioning of equipment package at Paradip port worth Rs 222 crore

Noida Toll Bridge, IL&FS Transportation: Allahabad high court prohibits NTBCL from levying toll – negative for both the stocks
Noida Toll Bridge (NTBCL), a special purpose vehicle of IL&FS Transportation has been prohibited by the Allahabad High court from levying toll on its Delhi-Noida facility. However it has not set aside the concession agreement or terminate it. The order says the CAG has been requested to verify the petitioner’s claim on the project cost (As per company the although the project cost was Rs431 crore but with debt, service, interest and principal, it was well in excess of Rs800 crore, the amount which was received by the company). The development is negative for NTBCL and ITNL.

NTPC has signed Power Purchase Agreement(PPA) with Nepal Electricity Authority (NEA) for supply of up to 160 MW power for the period January 2017 to May 2017 through Muzaffarpur-Dhalkebar transmission line; positive read thru

Kaya’s subsidiary in Middle East (Kaya Middle East DMCC) completes acquisition of 75 percent beneficial interest in Minal Medical Care (located in Dubai) and Minal Specialized Dermatology (based in Sharjah) – positive read through for the stock from long term perspective  

Blue Star Ltd has appointed KPMG India to value its Malaysia, Oman and Qatar subsidiaries as part of a plan to reorganize its overseas business, expand operations and optimize tax. We believe company aims to consolidate, increase its overseas market share and also plans to raise funds in the overseas subsidiary post restructuring. Positive read thru

As per the media reports, Indraprastha Gas Limited (IGL) is considering to waive  off the deposit amount of Rs5,000 on every PNG (piped natural gas) connection and replacing it with a rental of Rs25-50 per month. This move is aimed to increase PNG penetration in NCR region and has to be approved by Petroleum and Natural Gas Regulatory Board (PNGRB).

 MORE NEWS

FPIs may face up to 40% tax on Indian investments
Govt wants a share in your property windfall
China to levy environment tax to fight pollution
Foreign borrowings in Nov stood at $488.49 mn
Nabard sanctions Rs 35k cr loan under Irrigation Fund
Repayment incentive: RBI gives relief to farmers
Service tax mop from Mumbai zone jumps 25.5%
Short-term capital gains tax rate may rise in Budget
Ordinance planned to impose penalty for holding junked notes
Private labels to become a $5-bn business for e-tailers in 2017
NTPC signs 160 MW PPA with Nepal Electricity Authority
Private equity exits cross $10 billion in 2016: Bain & Co
Essar Oil posts record 2,162 crore net profit in FY2015-16
BSE to introduce 6-yr govt bond interest rate futures from Dec 30
PM to take stock of economy at NITI Aayog on Tuesday
India needs globally compatible tax rates: Jaitley 
SEBI forwards complaints against QNet to Karnataka govt
Srei Infra arm plans to raise Rs. 500 cr via NCDs
L&T Construction wins orders worth Rs. 3,039 cr
NTPC total installed capacity rises to 48,028 MW
RIL-ONGC dispute: Justice Singhvi appointed arbitrator
ICICI Bank registers the first case under the bankruptcy code
GMR Enterprises raises Rs220 crore from VTB Capital
Snapchat buys Israeli augmented reality start-up Cimagine
Abertis buys two Macquarie toll road assets for Rs1,000 cr
NBFCs seek more time to classify defaults as NPAs
Not in talks with PayPal on stake sale: FreeCharge
Paytm launches 100-member merchant helpdesk
Behind Ratan Tata-Cyrus Mistry clash, a distinct set of governance rules
OMCs eye over 50% of retail sales in cashless mode by March
Modi eyes real estate assets in drive against graft
Sebi puts in place disclosure norms for REITs
Demonetisation to help allot more funds to welfare scheme: Govt
Nifty slumps to 7-mth low, Sensex tanks 234 pts

STOCK IN NEWS

1. M&M has brought its South Korean subsidiary, SsangYong, on the road to financial turnaround.
2. Hero MotoCorp, Honda Motorcycle and Scooter India (HMSI), Bajaj Auto and TVS Motor — which together control 90%of the two-wheeler market — will keep their plants shut for up to 10 days for annual maintenance
3. Coal price boom evades Coal India
4. Air fares up 65% on holiday season demand
5. Jet Airways to up capacity by 50% on certain domestic, international routes
6. PVR introduces UPI for transactions at its multiplexes
7. Indian IT will acquire more small firms as they look to bridge digital gaps
8. Despite price hike, Coal India's average price realisation declines in 2016
9. NTPC signs 160 MW PPA with Nepal Electricity Authority
10. L&T Construction wins orders worth Rs. 3,039 cr

Monday, 26 December 2016

26 December 2016 - Views & News

MARKET INSIGHT

Indian markets are likely to open on negative note based on global market. The support for Nifty is now at 7900 level. Overall bias for the market is negative.

Nifty Spot Levels

Support 7916 – 7870 – 7823

Market Update:

 SGX Nifty -27 pts (7973) from last trade 8000 , Nikkei -30 pts , Hangseng clsd , NOW @6.53am , ‎Dow +14.93 pts ,Nsdq +15.27 pts , S&P +2.83 pts , Bovespa +687 pts , Ftse +4 pts , Dax -6 pts  , Cac +5 pts , Crude @ $53.03 brl (+0.07 ), Brent @ $55.16 brl (+0.11) , Gold @ $1133.60 (+2.90), Silver @ $15.79 (+0.02), Euro @ $1.0451, JPY @ $117.3400, INR @ $67.8250

GLOBAL MARKET & INTERNATIONAL DATA UPDATE 

 • Wall Street ended the week on a positive note on Friday as investors doubled down on a rally fuelled by optimism that President-elect Donald Trump's policies will boost economic growth.
• Economic data showed new single-family home sales rose to their highest level in four months in November, increasing 5.2 percent to 592,000 last month.
• After spending much of the day with a marginal loss, the Dow ended Friday 0.07 percent higher on the day, at 19,933.81 points.

Today's Corporate Action 26th Dec  Ex Date


BALMLAWRIE Bonus issue 3:1

Camlin Fine Sciences acquires 51% stake in Chinese food additives company to expand its international base (recently acquired majority stake in Mexican company) – positive read through for the stock ……….(8:53 am)
Camlin Fine Sciences is acquiring 51% stake in China-based Ningbo Wanglong Flavors and Fragrances Company. The acquisition is subject to RBI approval and expected to be completed on or before June 30 next year and cost of proposed acquisition will be disclosed after the completion. NWFFCL is a medium-sized company engaged in research, development and production of flavours and fragrances (food additives), as well as an agency of import and export of goods and technologies. The acquisition is positive for Camlin Fine Sciences from long term perspective.

Balrampur Chini gets green nod for Rs. 72-cr expansion project; the capacity enhancement was to cater the increasing demand for ethanol – positive read through for the stock…….(8:53 am)
Balrampur Chini Mills has got environment clearance for expansion of its Babhnan unit of distillery and co—generation power in Uttar Pradesh, entailing Rs. 72—crore investment. The company has proposed to increase the production capacity of its molasses—based distillery plant from 60 kilo litres per day to 100 kilo litres per day (KLD) along with co—generation power from 1 MW to 6.76 MW in Gonda district. The company is expanding the distillery capacity as the demand for ethanol has been continually increasing on account of the growth of user industries and use of ethanol as a fuel in the country.
  
TOP NEWS

ALERT: Prime Minister in his speech talked about financial market professionals not contributing enough for nation building and paying low taxes has created speculations that there could be changes in short term and/or long term capital gains tax regime in equity markets. Though the finance minister clarified there is no proposal to levy long term capital gains tax, there is a growing perception that the holding period to avail benefit of long term capital gains tax could be increased from 1 year to 2 years (in line with non listed equity) or to 3 years in line with other asset classes like debt/real estate – Sentimentally negative; we also believe it is likely to that some changes in holding period could be proposed in Union Budget however it might not be disruptive for the markets and would encouraging long term investment culture

ALERT: Max Life Insurance's merger with HDFC Life has hit a regulatory roadblock with the Insurance Regulatory and Development Authority of India expressing Reservations – Negative implications for Max Financial Services (as unlocking of value in life insurance business has been a re-rating trigger

ALERT: Gujarat Narmada Valley Fertilisers & Chemicals (GNFC) has restarted its Toluene Diisocyanate unit at Dahej, which was shut after a hazardous gas leak, after implementing all corrective actions and modifications. Also the company has digitized the sale of fertilizers and witnessing strong volume offtake in fertilizer segment – Positive read thru

Sun Pharma: Taro sells US rights Keveyis to Strongbridge Biopharma – Neutral for sun; Keveyis does not contribute to sales as it was being distributed at free of cost.

Yes Bank: Raises AT-1 bonds of Rs 3000 crores, taking Tier-1 to 12% - Positive Read through
Yes Bank has raised Basel 3 compliant Additional Tier-1 (AT-1) bonds worth Rs 3000 crores, via private placement. The bonds will carry coupon of 9.50% p.a. With the capital raise, Yes Bank Tier-1 rises to 12% (up from 10.1% in Sep 2016).

M&M to hike vehicle prices by 0.5-1.1% from January 2017; positive
Mahindra & Mahindra plans to increase prices of its vehicles by up to Rs 26,500 (0.5-1.1%) from January to offset rising input costs. The prices of its small commercial vehicles (up to 3.5 tonnes) would also increase in the range of Rs 1,500 to Rs 6,000 from January.

Maruti Suzuki to introduce mild-hybrid technology in its upcoming cars in 2017; positive
Maruti Suzuki is planning to adopt the SHVS (Smart Hybrid Vehicle by Suzuki) mild-hybrid technology for its new cars in 2017. SHVS system not only offers better fuel efficiency but also lowers emissions. Maruti Suzuki is planning to introduce SHVS in upcoming Ignis, new Swift and Swift Dzire. SHVS has enabled Maruti to boost the sales of Ciaz and Ertiga as customers get the benefit of technology and also reduced costs (hybrid vehicles are subject to lower excise duty which brings down costs). 

ITC to increase prices of two of its cigarette brands by up to 15%; pre-budget price hike in anticipation of increase in excise hike in the upcoming budget – neutral for the stock (usual course of action before and after the announcement of budget)
ITC Ltd has initiated an over 14-15 per cent price hike in its ‘Navy Cut’ and ‘Gold Flake’ brand of cigarettes. Both ‘Navy Cut’ and ‘Gold Flake’ (regular) are considered to be mid-market brands and were priced at Rs78 for a packet of 10 sticks. The revised price for Navy Cut stands at Rs89 for pack of 10 sticks and revised price for Gold flak regular stands at Rs90 (for pack of 10 cigarettes).
View: ITC normally hike prices of two to three brands prior to union budget in anticipation of increase in excise duty on cigarettes. The hike in this two brand was taken after a long gap and hence impact is expected to be limited.
  
FUND RAISING

Engineers India board has approved increase in share capital from Rs300 crore to Rs 400 crore and bonus issue
  
OTHER NEWS

Bharat Electronics: DAC clears Rs 7,200-Cr procurement proposals, positive read-thru
The Defence Acquisition Council (DAC), gave its nod to procurement proposals worth over Rs 7,200 crore including six maritime reconnaissance aircraft for Coast Guard, Nuclear Biological and Chemical(NBC) protection systems for infantry and low level radars for Army and IAF. The deal for those aircraft was nearly four billion dollars.  Giving details of the approvals by the DAC, defence ministry officials said the biggest deal worth over Rs 5,500 crores is for six multi-mission maritime reconnaissance aircraft for the Coast Guard.  The second project worth over Rs 1,265 crores is for indigenous design and developed modernized Nuclear, Biological and Chemical(NBC) protection systems against radiation.  These systems to be manufactured by public sector Bharat Electronics Limited(BEL)are to be fitted on infantry combat vehicles.Another proposal of the Army and the IAF for the procurement of 55 low-level light weight radars was also cleared by the DAC for Rs 419 crore.  These radars will transmit three-dimension signals as against two-dimension signals in the present radars used by the two Services. At least six Air Defence regiments of the Army will be equipped with the latest radars designed by DRDO and manufactured by BEL.

Sun Pharma: Taro sells US rights Keveyis to Strongbridge Biopharma – Neutral for sun; Keveyis does not contribute to sales as it was being distributed at free of cost.
Keveyis was approved by the U.S. FDA in August 2015 to treat primary hyperkalemic and hypokalemic periodic paralysis, a group of rare hereditary disorders that cause episodes of muscle weakness or paralysis. Keveyis has orphan designation status through August 2022. Under the terms of the purchase agreement, Strongbridge will provide Taro with upfront and deferred payments of $8.5 million in two installments; Taro is also eligible to receive additional future payments upon the achievement of certain sales unit milestones. Strongbridge expects to commercially launch Keveyis in the U.S. in April 2017. Taro has agreed to continue to manufacture Keveyis for Strongbridge, under an exclusive supply agreement at least for the period of Keveyis orphan exclusivity, subject to certain commercial terms and conditions, including minimum supply purchases.

Maruti Suzuki Gujarat plant to commence operations in February 2017; to introduce a new entry car in next three years
Maruti Suzuki India expects Gujarat plant to commence operations in February and is aiming to produce 10,000 units of premium hatchback Baleno this fiscal. Suzuki has envisaged a total investment of around USD 1,400 million on the plant which will house two vehicle assembly lines of 2.5 lakh units per annum each and an engine plant. Also Maruti will roll out a new small car in the entry segment. The new small car which is code named as Y1K could be launched by the festive season of 2019. Further Maruti has also stated it would invest Rs 2,100 cr in the Rohtak R&D centre by 2019 to beef up operations.

Tata Motors: Army to replace Maruti Gypsy with Tata Safari Storme; positive
Tata Safari Storme GS800 4x4 will soon replace the decades-old fleet of Maruti Gypsys that the Army uses now. The deal is expected to be signed in the next couple of months. The Army will put an initial order of about 3,200 vehicles, which could increase to 35,000 units in the coming years.

Shirpur Gold approved acquisition of 70% stake in Metalli Exploration & Mining; positive

ONGC to acquire entire 80% stake of GSPC in KG-OSN-2001/3 block – deal value for Deen Dayal West field works out to USD3.1/boe, which is in-line with recent deals in oil & gas space
ONGC’s board has approved acquisition of entire 80% stake of GSPC’s stake in KG-OSN-2001/3 block. ONGC would pay $995.3m for Deen Dayal West field and implied valuation works out to USD3.1/boe (based certified reserves of 1.8tcf by DGH), which is in-line with recent deals in the oil & gas space. ONGC would also make part payment of $200m towards future consideration for six more discoveries (apart from Deen Dayal West field) in the block and the same would be adjusted based in the valuation of six discoveries subsequent to approval of field development plan by DGH/Management Committee. Deen Dayal West field has already started production on trail basis and ONGC plans to put the field on commercial production post the completion of the deal with GSPC.

Allahabad Bank to merge its wholly owned subsidiary ALLBank Finance Ltd with itself – Netural read thru

NHPC’s 5 Power Purchase Agreements extended for 35 years; positive for NHPC

   MORE NEWS

Govt has no plan to hike captial gains tax: FM
Shortage of taxmen may derail black money hunt
Aadhaar-linked cashless merchant solution by IDFC
Restrictions on withdrawals likely to continue
ONGC to pay over $1.2 billion for GSPC stake buy
SBI, other banks may cut lending rates in new year
Govt working on new power tariff structure
Budget to assume crude oil price of $55-60/bbl for FY18
RBI refuses to disclose minutes of demonetisation meeting
Money has lost its 'anonymity' after demonetisation: Jaitley
Tata Housing, Macquarie form Rs 2,000 cr fund
Apparel exports to cross $30 bn mark in next 3 years: AEPC
M&M to hike vehicle prices by up to Rs 26,500 from January
Public auditors' body demand for more power to PAC, audit of FIs
Prime Minister Modi hints at more reforms
Camlin Fine to acquire 51% stake in Chinese firm
Maruti to get 10,000 Balenos from Suzuki's Gujarat plant this fiscal
PFRDA mulls various withdrawal options to optimise pension 
Balrampur Chini gets green nod for Rs. 72-cr expansion project
China fines GM unit $29 million for ‘price-fixing’
RTOs set to go cashless from January 2017
How Deutsche Bank’s big bet on Wall Street turned toxic
Tata Steel to acquire Brahmani River Pellets for Rs900 crore
Welspun Enterprises to divest 15.49% in Welspun Energy
Wipro agrees to pay $5 million to SEC to settle six-year-old case
About 75% of targeted 60,000 officers trained for Goods and Services Tax
India may clock GVA growth of 6.6 per cent in 2016-17: Icra
PFRDA mulls various withdrawal options to optimise pension
Tilaiya UMPP: Panel seeks fresh comments from Ministry of Power, others
Special session on GST likely if vexed issues are resolved
Sebi goes green; debt security papers via electronic mode
Cosolidated SME, corp data with banks to improve lending: CII
FPIs pull out $ 3.5b from capital markets in December
Equity MFs add 25 lakh investor accounts in Apr-Nov FY17

STOCK IN NEWS

1. Hindalco's copper biz to double value-added products contribution by 2018
2. Indian IT will hire more small firms as they look to bridge digital gaps
3. ICICI Venture to raise Rs 500-cr realty fund
4. ONGC's stake buy in GSPC: Some call it a rescue act, others a sweet deal
5. Sebi begins action in NDTV ownership case
6. Ranbaxy portfolio makes up for 37% of Sun's India sales
7. M&M to hike vehicle prices by up to Rs 26,500 from January
8. Tata Housing, Macquarie form Rs 2,000 cr fund
9. Whirlpool of India is eyeing $1 billion revenue by 2020 on the back of new product innovations and growing Indian economy.
10. MSI to get 10K Balenos from Suzuki's Gujarat plant this fiscal
11. Balrampur Chini gets green nod for Rs 72-cr expansion project
12. Private sector YES Bank on Saturday said it has raised Rs 3,000 crore from bonds to fund business expansion.
13. Raymond, Aditya Birla, Reliance Retail plan khadi foray after Arvind