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Thursday, 23 February 2017

23 February 2017 - Views & News

MARKET INSIGHT

Markets are expected to open flat to positive. Today being scheduled expiry of the month, markets are expected to remain volatile. Overall index trend looks to on the course of testing all time high of 9119 in medium term. 8900 – 8860 will act as crucial support zone for any minor dip.

Nifty Spot Levels

Support 8900 – 8860 – 8783
Resistance 8968 – 9000 - 9080

GLOBAL MARKET

• The S&P 500 ended modestly weaker on Wednesday, holding losses after minutes from the Federal Reserve's last meeting kept alive a potential near-term interest rate hike, while DuPont shares helped the Dow close at an all-time high for a ninth straight session.
• The major US indexes are trading around record highs, driven up since President Donald Trump's Nov. 8 election by the promise of lower taxes, reduced regulations and higher infrastructure spending.
• The Dow Jones Industrial Average rose 32.6 points, or 0.16 percent, to 20,775.6.

Market Update:

SGX Nifty -6 pts (8914) from last trade 8920 , Nikkei - 107 pts ,  Hangseng - 80 pts ,  NOW @6.52am ,  
‎Dow +32.69 pts ,Nsdq -5.32 pts , S&P -2.56 pts , Bovespa -462 pts , Ftse +27 pts , Dax +31 pts  , Cac +7 pts , Crude @ $54.01 brl (+0.42), Brent @ $56.17 brl (+0.02) , Gold @ 1237.85 (+4.55), Silver @ $17.99 (+0.04), Euro @ $1.0551, JPY @ $113.3700, INR @ $66.9325

Today's Corporate Action 23rd Feb  Ex Date

CESC Interim Dividend - Rs. - 10.0000NATCOPHARM Interim Dividend - Rs. - 6.0000

Today's Key Result 23rd Feb

Emco Ltd,Mahindra Cie,Rain Inds

TOP NEWS

ALERT: Housing finance Companies: Markets regulator Sebi allowed debt mutual funds to invest an additional 10% of their corpus in debt papers issued by housing finance companies (HFCs), over and above the sectoral cap of 25% - Positive read through for HFCs as the move will help channelize funds into the housing finance space and lower cost of funds; positive for LIC Housing, DHFL, Repco Finance and GIC Housing among others

CRISIL expects the Voluntary Vehicle modernization program to result in a 65% incremental growth in CV sales volumes spread over FY18-FY20 period: Positive for CV manufacturers like Ashok Leyland, Tata Motors, M&M and Eicher Motors.…..(Details in Other News)

Hindustan Oil Exploration Company (HOEC) expects early monetization of Kherem field (awarded to HOEC in recently concluded bids for marginal fields) in Arunachal Pradesh. Kherem is a small field with initial oil in place of around 3 million barrels and 17 billion cubic feet of gas. HOEC holds 40% stake in onshore Kherem field - Positive for HOEC.
Aurobindo recalls 47,040 bottles of Venlafaxine Hydrochloride extended release capsules (indicated for the treatment of major depressive disorder) in the US – Sentimentally negative for  Aurobindo.

MBL Infra, NHAI cancels Udaipur Bypass road project awarded to MBL Infrastructures under HAM model , Negative read thru

Jyoti Structures- As per media news, Essel Infraprojects and Shriram EPC both are eyeing a stake in Jyoti structures, are expected to submit their bids soon, stock to be focus

HUL - Unilever to review business following Kraft Heinz bid; focuses on hitting higher profit targets and improving the shareholders value – positive read through for HUL

Jyothy Laboratories - Henkel Begins Due Diligence For A Stake In Jyothy Laboratories, Henkel has an option to enhance stake in Jyothy Lab till March 2017 – positive read thru for Jyothy Laboratories

 OTHER NEWS

HUL - Unilever to review business following Kraft Heinz bid; focuses on hitting higher profit targets and improving the shareholders value – positive read through for HUL
Unilever has promised to boost profits and conduct a root and branch review of its business. Unilever said it would boost operating profit margins to meet “the upper end of its 40-80 basis points guidance. Previously, it had said the margin improvement would be at the lower end of the range indicated. Unilever’s profit margins are half those of Kraft Heinz, suggesting that the business could be run more efficiently to improve shareholders value.
View – Unilever’s enhancing focus on improving business’ profitability and shareholder’s value is positive for HUL, as it is one of the key growth driver for the company in Asia region and hence more focus would be given in enhancing HUL’s profitability in near future.

Jyothy Laboratories - Henkel Begins Due Diligence For A Stake In Jyothy Laboratories, Henkel has an option to enhance stake in Jyothy Lab till March 2017 – positive read thru for Jyothy Laboratories
Jyothy Laboratories is in talks to sell a stake to Germany-based Henkel AG & Co. The two parties have to reach an agreement before the end of this fiscal as part of the 2011 deal when Jyothy Laboratories had acquired a majority stake in Henkel India’s consumer business. Jyothy Lab had offered Henkel AG the option to buy up to 26 percent stake in the company either through purchase of equity or through issue of shares. If Henkel AG does buy more than 26 percent stake in Jyothy Laboratories, it will trigger an open offer to comply with the takeover code of the the Securities and Exchange Board of India. The open offer gives the acquirer a chance to buy up to another 20 percent from public shareholders. The promoters own 66.92 percent stake in Jyothy Laboratories and the remaining 33.08 is held by public shareholders, including over 24 percent by institutions, according to the company’s disclosure to stock exchanges in December-end.
The talk of this deal has been in the market since quite some time. Any positive move from Henkel will give  Jyothy Laboratories an access to more products and brands which Henkel AG owns internationally. The German company has over 100 consumer brands in its portfolio, includes Persil, Schwarzkopf, Dynamo. This would be long term positive for Jyothy

FMCG – According to Euromonitor study edible oil surpass dairy as India’s largest packaged food item, as consumer prioritise health over expenses – positive read through for branded edible oil companies such as Marico and Agrotech Foods
Oils surpassed dairy as India’s largest packaged food item, underpinned by increasing awareness among consumers who now prioritise health and hygiene over expenses on the staple cooking medium.  The introduction of smaller and more affordable pack sizes is also bringing more packaged food categories within the reach of price-sensitive consumers in semi-urban and rural India. By contrast, companies are stressing health and we l l n e s s through innovative marketing in urban India, helping shift value to the premium end of the spectrum. 
View: This is positive branded edible oil players such as Marico, Agrotech Foods and Ruchi soya etc to gain share from non-branded players. Marico is already building up its edible oil portfolio towards healthier variants under the Saffola brand to improve the consumption in the coming years.

CRISIL expects the Voluntary Vehicle modernization program to result in a 65% growth in CV sales volumes between FY18-FY20: Positive for CV manufacturers like Ashok Leyland, Tata Motors, M&M and Eicher Motors.
CRISIL expects the voluntary-vehicle modernisation programme (V-VMP) announced by the Ministry of Road Transport & Highways, to boost commercial vehicle sales volumes by a cumulative 65% growth between FY2018-FY2020. The media report further suggests that the V-VMP scheme could lead to incremental sales of 4.4 lakh CVs (primarily MHCVs) as against CV industry size of 6.86 lakh units. As per the report, more than 85% of the incremental 4.4 lakh CV sales (about 3.74 lakh units) due to scrappage would be of medium and heavy trucks because of their lifespan of about 20 years, which is more than the MHCV industry size of 3.02 Lakh units in FY2016. Incremental LCV sales due to scrappage would be around 66,000 units as against LCV industry size of 3.83 Lakh unit. V-VMP scheme will be finalized (details of incentives to be provided by Government and OEM to be finalized) and is likely to be implemented in the next two to three months and we expect significant benefits for CV players particularly for the MHCV segment.

Maruti Suzuki to invest Rs 1,900 crore on Rohtak R&D centre in 2 years for faster product churn and compliance for the safety norms
Maruti Suzuki India is investing Rs 1,900 crore till March 2019 on enhancing the R&D centre at Rohtak for cutting time of new product development and to expand infrastructure for evaluating vehicles' safety. The centre will have facilities dedicated for transmissions, engines, emissions controls among others. The new safety norms come into effect from October 2017.

TVS Motor regains no 2 spot in the scooter segment; to unveil a new scooter in FY2018 to maintain growth momentum; positive
TVS Motor Company Ltd has regained the second position in the Indian scooter market that it lost to Hero MotoCorp about a year ago. Sustained demand for the products coupled helped TVS Motor in its comeback. Also, TVS Motors urban rural balanced mix enabled the company to outgrow HeroMotocorp which was relatively more impacted by demonetisation. TVS total scooter sales stood at 6,77,172 units for (April 2016 to January 2017) period, while Hero’s volumes were about 6,58,255 units. To maintain the growth momentum, TVS Motor has unveiled a BS IV-compliant variant of its executive scooter Wego in new colours, and plans to launch all-new scooter (Graphite) in FY2018.
Airtel buys strategic equity stake in fintech startup Seynse
Bharti Airtel through its subsidiary Bharti Airtel Services, bought a strategic equity stake in Seynse Technologies, a financial tech startup. Seynse has created the popular digital lending platform Loan Singh, which enables easy loans for credit-worthy yet underserved borrowers. Seynse has built a proprietary credit engine and advanced machine learning capacity to serve customers.

Idea Cellular: Softbank looks to pick up stake in the proposed Vodafone-Idea combine, stock to be in focus ( We reiterate our view that, we do not see material upside in the stock from current levels)
As per media news, Softbank, which is about to close its mega $100 billion Vision Fund, could emerge as a new investor in the proposed Idea-Vodafone combine, Softbank is learnt to be in talks with Vodafone Plc to buy a minority stake in its Indian unit which is likely to be merged with Idea Cellular. While discussions are still on and there is no guarantee about the outcome, people familiar with the situation say it is possible that the Japanese investor may end up with 15-20 % in the merged entity.

As per the media reports, BPCL is likely to take its shut down its Mumbai refinery for 6 weeks by end-Feb-2017 for a maintenance turnaround. No negative impact is expected on supplies as crude processing at other units would be increased by BPCL. We highlight here that the news is in the market since early February-2017.

CCEA approves 20,000-mw solar park scheme with government financial support of Rs8100 crore; positive for BHEL, KEC International & Ujaas Energy

Asian Oilfield gets $95 mn contract for  maintenance svcs for Nigerian oil field, positive read-thru

Ujaas Energy, Promoter Anurag Shyamsunder Mundra Sell  19.9 LK shares and  Mundra Shyam Sundar Sell 21.51 Lk Shares yesterday , overall sell 2% stake in the company, Stock to be focus

Hindustan Organic chemcials, seek nod to sell 442-acres land to BPCL for Rs619 crore (Current market cap Rs158 crore), stock to be focus

 MORE NEWS

Softbank looks to pick up stake in the Vodafone-Idea combine
Fed Reserve's minutes point to rate hike 'fairly soon'
Urjit Patel sees a better Q4 on faster remonetisation
RIL’s Rs 39K cr gain in m-cap was worth the big ‘Idea’
FinMin to finalise Rs 8,000-cr cap infusion in 15 days
Note ban's negative impact on India is reversing: S&P
Rationality returning to telecom sector: Fitch
GST adoption could raise India's GDP to over 8%: IMF
Freebies by Jio hit govt's licence fees, spectrum charges: Telecom Comm
Sebi issues consultation paper to review stock exchanges norms
RBI rate panel unanimously agree to focus on 4% inflation target
Taxman to scrutinise loan deposits under Operation Clean Money
Finmin questions Sebi on NSE co-location audit
India's $85-bn orders still not enough: SpiceJet
‘India comfortable with crude prices up to $65/barrel’
RJio’s tariff targets incumbent operators’ top-end users
Cabinet approves doubling of solar power capacity to 40,000 MW
NPPA warns stent makers, importers against shortage
TCS to remain net cash positive despite Rs16K cr buyback: S&P
Bharat Electronics’ offer-for-sale subscribed 2.34 times by institutional buyers
India needs to create a bad bank quickly: Arvind Subramanian
NSE, BSE seek clarification from Infosys on anonymous emails over Panaya deal
SBI says examining all currency notes at ATMs after fake Rs 2000 notes report
PM Narendra Modi calls for accountability, efficiency to improve telecom services
UK created maximum jobs in India via FDI: Report
Sensex ends 103 points higher on derivatives expiry, RIL rally
Realtors express concern on Supreme Court ruling on consumers vs builders disputes
I-T to go easy on up to Rs 5 lakh deposits by 70-plus people
HDFC Bank FPI trade:RBI,Sebi to tighten norms on trigger point
EU says open to accommodate more Indian skilled professionals
No plans to introduce Rs 1,000 notes: Das

STOCK IN NEWS

1. Poultry industry protests over chicken legs import from US
2. Infosys says audit committee to probe whisteblower letter on Panaya
3. Volkswagen said to renew India push with Tata Alliance talk
4. Abbott plans to launch device that can detect traumatic brain injury
5. Maruti Suzuki to invest another Rs 1,900 cr on Rohtak centre in 2 years
6. Kwid sales crosses 1.30 lakh units, says Renault
7. Toyota India eyes to gain by launching smaller hybrid cars
8. RIL shares surge to seven-and-a-half year high after Jio's new plan
9. Snapdeal to lay off 600 people over the next few days

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