}

Tuesday, 28 March 2017

28 March 2017 - Views & News

MARKET INSIGHT

Markets are likely to open positive. The range of 8980-9000, which had earlier acted as a resistance zone, is now providing support to the Index.

Nifty Spot Levels

Support 9000 – 8975 – 8903
Resistance 9133 – 9167 - 9218

GLOBAL MARKET

• The S&P 500 cut earlier losses on Monday to end slightly lower, while the Dow declined for an eighth straight session, as investors assessed how the defeat of President Donald Trump's first major legislative action would impact the rest of his agenda.
• With stocks soaring to record highs after Trump's election, investors are concerned about the fate of his economic plan, including tax reform and infrastructure spending. 
• The Dow Jones Industrial Average fell 45.74 points, or 0.22 percent, to 20,550.98.

 Market Update:

Dow -46.74 pts ,Nsdq +11.64 pts , S&P -2.39 pts , Bovespa +454 pts , Ftse -43 pts , Dax -68 pts  , Cac -3 pts , Crude @ $47.84 brl (+0.11), Brent @ $51.04 brl (+0.06) , Gold @ 1252.95 (-2.75), Silver @ $18.082 (+0.11), Euro @ $1.0861, JPY @ $110.7600, INR @ $65.055

TOP NEWS

Kotak Mahindra Bank is looking for shareholder approval for raising fresh equity capital, but has not disclosed price, amount and the purpose for the same  – Sentimentally positive, speculation over the end use of the funds raised, especially for inorganic activities may pique investor interest in the stock since the bank has sufficient 15.5% CET 1 as on December 2016

Skymet Weather forecasts below normal Monsoon at 95% for India in 2017 – Sentimentally negative for Consumer goods, retail, textile, Agri-inputs and rural focused auto companies – Hero Motocorp and M&M; if  forecast holds true, it will continue to put stress on the consumer demand environment (especially in the rural market), which are dependent on good monsoon for their pick up in revenue
According to Skymet Weather, Monsoon 2017 in India is likely to remain below normal at 95% (with an error margin of +/-5%) of the long period average (LPA) of 887 mm for the four-month period from June to September. This is because of El Niño, whose effect will be visible July onwards. Most of the weather models are indicating towards 60% chance of El Niño coming into existence during the second half of the Monsoon. There is 25% chance of below normal rains and 15% chance of drought.

Aurobindo clarifies that the suspension of drugs by European Medicines Agency (EMA) will have an impact of less than USD 5 mn (~ Rs 30 crores) per annum as some of the products are awaiting for approval in some countries and currently only 5 products are affected – Positive for Aurobindo.

Government bats for sales of BS-III vehicles after April 1, SC decision awaited. Positive for most auto companies if Supreme Court agrees (especially CV manufacturers like Ashok Leyland, Hero Motocorp) ….(details in Other News)

Dilip Buildcon: The company has been declared as the lowest bidder for two projects aggregating Rs580.5 crores on EPC mode in Maharashtra by Ministry of Road Transport & Highways. The development is positive for Dilip Buildcon.

Tyre’s companies  to be focus today as the commerce ministry will be meeting these companies to discuss anti-dumping duty, already seeing strong run up from last week

IDFC Bank Has sold nine stressed loan portfolios to Edelweiss Asset Reconstruction Company for about Rs5,000 crore – Sentimentally positive as legacy issues in asset quality gets cleaned up but the details related to haircut taken by IDFC Bank is not clear

KPIT Tech’s promoters have raised their stake in the company to 18.94% from 16.72% earlier – Positive read thru

Gayatri Projects: Sembcorp to invest USD 600 million in power unit; Sembcorp denies fresh capital infusion – Neutral read thru for Gayatri Projects
Sembcorp Industries is set to provide about USD600 million to its Sembcorp Gayatri Power unit (1320MW power plant in A.P.) as per media reports. The funds will be used by Sembcorp Gayatri to pay down its domestic debt from about USD 1.05 billion to about USD 450 million. However Sembcorp has clarified that there is no fresh capital infusion being planned. 

 OTHER NEWS

Government bats for sales of BS-III vehicles after April 1, SC decision awaited. Positive for most auto companies if Supreme Court agrees (especially CV manufacturers like Ashok Leyland, Hero Motocorp)
The central government came out in support of automotive industry arguing before the Supreme Court that the March 31,2017 deadline is for manufacturing and not sales or registration. Quoting previous similar changes in emission norms (from BS-II to BS-III for instance) the government stated that in each case the deadline was meant for manufacturing while sales and registration of previous generation vehicles were allowed even after April 1.The SC will continue to hear the case today and we await the final judgement. Automobile has unsold inventory of 824,000 BS3 vehicles worth over Rs 12,000 crore, and the inventory runs the risk of being turned into junk if the apex court rules that such vehicles cannot be allowed to be registered post April 1, 2017.

L&T- The Building & Factories business segment of the construction arm of L&T has won orders worth Rs2,490 crores; positive

Berger Paints starts the commercial production at its expanded capacity at Jejuri plant at Pune; the company invested about Rs100crore for the expansion of the capacity – positive read through for the stock as company aims to double the revenues over the next five years through enhanced capacity

Maruti Suzuki's compact SUV Vitara Brezza has crossed 1.1 lakh units sales mark in the first year of launch. It currently has pending bookings of over 50,000 units with waiting period of around 20 weeks depending on variant. Positive.

IL&FS Transportation (ITNL), IL&FS Engineering and Construction: A joint venture promoted by the ITNL and IL&FS Engineering and Construction in the ratio of 51:49 is declared lowest bidder for package no P-2 by the Madhya Pradesh Road Development Corporation. The contract amount is Rs175.5 crore to be completed within 20 months. The development is positive read thru for both the stocks.

Technofab Engineering received total orders worth Rs335 crore rupees from Powergrid Corp and the Ministry of Agriculture Resources, Rwanda -- Positive

Motherson Sumi Systems is likely to foray into railway segment with the recent acquisition of Finnish based wiring harness maker OKC Group Plc. Positive read thru

Lux Industries to be KKR’s merchandise sponsors for two seasons - the company is looking at cashing on the sports frenzied consumers with this sponsorship – positive read through
Lux industries flagship brand Lux Cozi will be one of the official sponsors and the only merchandised partner for Kolkata Knight Riders for the upcoming Indian Premier League (IPL) season and also next year. The jerseys would include round necks, polos, fan jerseys and many more designs priced between Rs 250 and Rs 450. The merchandise will be available at in-stadium kiosks, online portals, kiosks in city malls and also at Lux Cozi’s 500 odd multi brand outlets across the city.

Jindal to enter paints business in mid-2018, with JSW Paints, and would invest Rs 1,000 crore – the group has its cement (JSW Cement) and steel (JSW Steel) distribution in place. Venturing into the paint business will make the group a one stop solution where it can offer cement, steel and paint to consumer
The Sajjan Jindal family is investing Rs 1,000 crore to build two factories to foray into the paints segment, with JSW Paints, and is targeting an April 2018 launch.  There will be one factory coming up in Vijaynagar in Karnataka (a decorative unit) and another coming up in Vasind in Maharashtra (for industrial segment). Initially the focus will be on the southern and the western markets and the company is also looking at installing capacity in West Bengal in the next few years

Heidelberg Cement: credit rating upgraded – Positive read thru for the stock
India Ratings and Research (credit rating agency) vide its communication dated 27th March 2017 has upgraded the Long-Term Issuer Rating of Heidelberg Cement India Limited to "Ind AA+" (with stable outlook) from "Ind AA". The credit rating with respect to 370 numbers of Non-Convertible Debentures of INR 10 million each aggregating to INR 3700 million allotted on 16th December 2013, has also been upgraded to 'Ind AA+" (with stable outlook) from "Ind AA". Positive read thru for the Heidelberg Cement.

The Great Eastern Shipping company: G E Shipping took delivery of a secondhand Suezmax crude carrier “Jag Lakshya” (2011 built) of about 157,000 dwt. The company had contracted to buy the vessel in December 2016. The development is positive read thru for G E shipping.

Reliance Industries: As per media reports, Reliance JIO is considering to extend the deadline for subscription to JIO Prime membership by one month to April 30, 2017. We believe that the extension is aimed to maximize retention rate from the 100 million subscribers added by Reliance JIO.

Shriram EPC, received order worth $107.8 million from United Republic of Tanzania, Tanzania in JV with Larsen & Toubro.

Balaji Telefilms: OTT platform to launch on 16 Apr, ties up with Micromax, MobiKwik, stock to be focus
Balaji Telefilms’ subscription-based digital entertainment platform ALT Balaji is set for its commercial launch on 16 April. Balaji Telefilms, which is banking on its OTT platform for future growth, also announced a strategic partnership with the mobile brand Micromax and mobile wallet Mobikwik. ALT Balaji’s mobile platform will come pre-loaded with Micromax mobile handsets. The app will debut with six new shows and will be followed by a new show every 15 days.

IFB Inds board approves acquisition of  Global Automotive, Singapore for Rs20 crore

JSW planning foray into paints biz by  April 2018, to spend around Rs1000 crore as

Tata Communications partners with Continuant to enhance digital cloud communication platforms
Continuant announced an extension of its strategic partnership with Tata Communications to provide dedicated hosted Cisco collaboration solutions to enterprise customers worldwide. The partnership combines the strengths of Tata Communications’ global connectivity and platform capabilities with Continuant’s industry-leading experience maintaining existing legacy systems and transitioning companies to the cloud. According to a research study by Global Market Insights, the unified communications market is forecast to hit $96 billion by 2023.

STOCK IN NEWS

1. Sun Pharma looks to shine with tiny deals
2. Zydus Healthcare buys Mumbai office property for Rs 172 cr
3. Hyundai India projects extra Rs 13,000-cr investment by 2022
4. Maruti Vitara Brezza sales cross 1.1 lakh units in India
5. Lupin expects muted growth in the US despite new launches
6. Reliance Jio offers additional data up to 120 GB to Prime users
7. Divi's weighs share buyback following sharp fall in share price
8. Nissan launches new version of SUV Terrano for Rs 13.6 lakh
9. After PKC buy, Motherson Sumi may bid to acquire a Bosch arm
10. BHEL commissions 250 mw eco-friendly power plant in Gujarat
11. Dr Reddy's to market Integra's products in India.

No comments: