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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

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