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Friday, 23 June 2017

23 June 2017 - Views & News

 MARKET INSIGHT

 Nifty is likely to open on a flattish note based on the global cues. Support for the day is placed at 9600 levels and if breaks then one can see further downside for the day.

Nifty Spot Levels

Support 9600 – 9560

Resistance  9709 - 9750

GLOBAL MARKET

Asian shares baulked at the starting gate on Friday but remained on track for a weekly gain, while crude oil prices pulled away from this week's 10-month lows.MSCI's broadest index of Asia-Pacific shares outside Japan was flat in early trade, and up 0.4 percent for the week.

US economic data on Thursday showed the number of Americans filing for unemployment benefits rose slightly last week, but remained at levels consistent with a tight labour market. Home prices also increased in April more than expected.

MARKET UPDATE

Sgx Nifty +6 pts Dow -12.74 pts ,Nsdq +2.73 pts , S&P -1.11 pts‎, Bovespa +510 pts , Ftse -8 pts , Dax +19 pts , Cac +7 pts , Nikkei +26 pts now , Crude @ $42.87 brl (+0.07), Brent @ $45.28 brl (+0.01) , Gold @ 1252.69 (+3.29), Silver @ $16.567 (+0.05), Euro @ $1.1149, JPY @ $111.2900, INR @ $64.601

Today's Corporate Action 23rd June  Ex Date

STEELCAS Dividend - Rs. - 0.6000

TOP NEWS

Fortis Healthcare – According to media reports Integrated Healthcare Holdings (IHH) of Malaysia has pulled out of its exclusive negotiations with the Singh brothers to acquire a controlling interest in Fortis Healthcare and Fortis Malar which will also house SRL Diagnostics following a group restructuring exercise; IHH was planning to acquire 26% stake in Fortis Healthcare for ~Rs3600crore – negative read through for the stock 

Banking sector: SBI has got mandate from the JLF to take three companies namely Essar steel (debt of Rs 44,000 crore), Bhushan steel (debt of Rs 47,000 crore) and Electro steel (debt of Rs 10,200 crore) to the National Company Law tribunal (NCLT) – Positive read thru for lenders as this decision indicates the urgency with which the banking system is working to resolve the NPL problem. Authorizing SBI removes the hurdle of infighting between the lenders ensuring faster and more meaningful negotiation process.

Maruti Suzuki new Dzire receives 51,400 bookings; commands waiting period between 6 to 8 weeks; strong response indicates sustained volumes; positive (details in other news)

Reliance Industries (RIL) and British Petroleum has withdrawn gas price related arbitration against government of India as per the media reports. We this as a positive development for RIL as it will enable RIL to claim premium pricing for its deep water blocks (in which the two companies are investing Rs40,000 crore).

Mindtree to consider buyback of shares , positive read-thru for the stock, also Café Coffee day  (CCD) being one of the largest shareholder also to be in focus
MindTree announced it would look at share buyback plan. The company has informed the exchanges the proposal for a buyback would be taken up at the Board meeting on June 28. Note that the IT companies have started opting for share buyback route to reward the shareholders.

Wockhardt settles commercial litigation for Trisenox in London HC by paying Rs 186cr (~23 million Pounds) with Cephalon Inc an affiliate of Teva Pharmaceuticals in UK – Negative for Wockhardt

Indian IT sector: Accenture _Q3FY17 result: Inline performance, digital growth continue to remain strong (long term positive for Indian IT, no major read-thru for near term)
For Q3 FY17, Accenture revenues were up by 5%YoY in reported terms and 7%YoY growth in CC term to $8.9 billion. This was mainly driven by helped by strong demand for its digital, cloud and security-related services (continued double digit growth), which make up more than 50% of revenue (vs 45% in Q2FY2017). Outsourcing grew by 6% yoy, 7% in  CC term, while consulting growth for the quarter was at 4% yoy, 6% on CC term. During the quarter, bookings were at $9.8 billion, representing consulting bookings of $5.2 billion (up 6% yoy) and outsourcing bookings of $4.6 billion (10% yoy). Accenture expects net revenues for the fourth quarter of fiscal 2017 to be in the range of $8.85 billion to $9.10 billion, 5% to 8% growth in CC terms. The management has adjusted its  FY17 revenue guidance from earlier 6-8% to 6-7% on CC basis on account of currency headwinds.


OTHER NEWS

Reliance Infrastructure , Reliance Defence:  To partner with Daher for aerospace components, stock to be in focus
Reliance Defence, a fully owned subsidiary of Reliance Infrastructure Limited, signed a Memorandum of Understanding (MOU) at the Paris Air Show with Daher Aerospace, France, a leading supplier of integrated systems for Aerospace and Advanced Technologies. Daher Aerospace is tier one manufacturer in Aerostructures segment comprising Fuselage Sections and Fairings made of composites as well as conventional metals for Dassault Aviation and other leading global aircraft manufacturers. In India, Dassault has 50% Offset obligation for 36 Rafale aircraft, a contract valued close to € 8 billion. Reliance Defence is a key partner with Dassault Aviation for the largest ever offset program in India. Signing this MOU on the sidelines of the Paris Air Show, Reliance Defence envisages a strategic partnership with Daher with aim to jointly explore opportunities in design and manufacture of composite parts; design and build welded ducts, metal conduits, swaged pipes and cable harness supports; aerostructure components, integrated logistics, airframes/ assemblies and related industrial activities. The new facility with Daher Aerospace fosters a comprehensive defence manufacturing eco system through backward integration under the Government ‘Make in India’ program for indigenous manufacturing of aerospace components.

Indian Oil Corporation Limited’ (IOCL) Paradip refinery operated at 105% utilization rate with a throughput of 1.3mmt in May-2017 as compared to 58.1% in April-2017 and 96.4% in March-2017 – positive read through for IOCL.

Quess Corp, subsidiary of Thomas Cook India, will be buying remaining 51% stake in Comtel Pro Rs0.5crore; Comtel pro is engaged in the business of providing service in the field of general staffing, training and skill development – positive read through for Quess Corp as the company is focusing in four business vertical of global technology solutions, general staffing, people & services and integrated facility management

Maruti Suzuki new Dzire receives 51,400 bookings; commands waiting period between 6 to 8 weeks; strong response indicates sustained volumes; positive
Maruti Suzuki recently launched new “Dzire” has received 51,400+ bookings and the waiting period on some variants ranges between 6 to 8 weeks. The new Dzire has received major updates in the interior and exterior and gets many new features, some of which are first-in-segment. The new Dzire is based on the HEARTECT platform (a reworked version of the Baleno hatchback) that makes it lighter in weight, than its predecessor. New Maruti Suzuki Dzire is available in a price range between Rs 5.45 lakh for the base variant to Rs 9.41 lakh to the top end trim, ex-showroom, Delhi. Positive read thru

Shriram EPC, bags orders worth Rs165 crore  for water management, first order worth Rs 83.37 crore from the City Corporation Davanagere to improve bulk water supply and is to be completed in 30 months and second order worth Rs 82.56 crore from Tamil Nadu Water Supply & Drainage Board for implementation of Water supply scheme in Hosur Municipal Corporation to be executed within 24 months, positive read-thru

ITC - ITC hopes to make Savlon a Rs 500 crore brand by consumer spends in next 4 years and handwash would be a major contributor of that. The company has also introduced Rs. 5 sachet pack to expand the brand’s presence in the handwash category. Currently, Savlon is a Rs 150 crore brand by consumer spends. Currently, Dettol (Reckitt Benckiser) and Lifebuoy are the leaders in the segment. Savlon has 6.1 per cent share in handwash market compared to over 50 per cent of Dettol and 25-30 per cent of Lifebuoy.

Websol Energy,Indosolar Ltd, Surana Solar, Swelect Energy  stock in focus- Finance Ministry rejects Rs 20,000 crore plan for local solar equipment firms with incentives and subsidies to help them withstand the flood of Chinese imports. The domestic industry is concerned about rising imports of solar equipment, which rose 38 per cent to Rs 21,400 crore in 2016-17, accounting for 90 per cent of the solar cells and modules used by Indian solar developers. The local manufacturer already gets incentivize solar manufacturing under the Modified Special Incentive Package Scheme (M-SIPS).  

Infosys, Imprezzio partner to boost customer service
Imprezzio Inc. says it’s formed a partnership with Infosys to help both companies improve service to their customers. Infosys will help its clients with top-line revenue growth and strategic initiatives by introducing Imprezzio.

Wipro Collaborates with Red Hat for Cloud Application Factory
Wipro announced collaboration with Red Hat, to set up a cloud application factory designed to offer developers a repeatable and rapid methodology for application modernization across public, private, and hybrid clouds. Wipro’s cloud application factory can help drive the strategy, design, and delivery of next generation applications globally, using Red Hat OpenShift Container Platform.

Tata Communications launches private cloud node in Malaysia
Tata Communications has launched three new nodes for its IZO Private Cloud service to support enterprises. The new private cloud nodes in Germany, United Arab Emirates (UAE) and Malaysia enable CIOs to gain unprecedented control over all their applications by creating a truly hybrid, high-performance IT infrastructure.

Tata Motors to save Rs 400 cr on workfoce reshuffle; positive read thru
Tata Motors is set to save Rs 300-400 crore in employee restructuring exercise. The recast of the white-collar workforce has resulted in 1,200-1,300 employees getting reassigned, shifted to other units or asked to leave. The company has also slashed 2,500 positions, by eliminating a plethora of designations, all of which will add to the bottom line. With a focus on speed and accountability, almost 8-10% of white-collar jobs have been cut, lowering numbers by an estimated 700-800 in the past few months. Next the company plans to trim its factory workforce by 10% or 3,000 people.

La Opala,  settles dispute with workers union at its Madhupur plant. Operations to return to normalcy by July 10, positive read-thru

NTPC targets 250 billion unit power generation in FY2018

Reliance Industries (RIL) and British Petroleum (BP) are likely to award contracts for the development of their R-series project within few weeks as per the media reports - positive read through for RIL.

MORE NEWS

SBI to take three steel companies to bankruptcy court
RIL, BP withdraw gas price arbitration against govt
Govt to ignore genuine mistakes in GST initially: Adhia
Provide adequate details in passbooks: RBI to banks
Resolve 55 NPA accounts in six months: RBI to banks
Sinha meets Mittal, Ambani; assures 'corrective steps'
Asset quality pain to continue, GNPAs to rise: ICRA
Banks to take a haircut for insolvency of NPAs
May cut Britain's rating again before Brexit terms: S&P
EPFO ties up with Hudco to enable Rs 2.67 lakh housing subsidy to members
Sebi proposes stricter separation on investment products
Mindtree to consider share buyback
Govt loosens norms for auditor rotation at unlisted companies
Rosneft closes $12.9-b deal with Essar Oil
SEBI puts 25% public float matter back in Govt’s court
Centre facilitates talks between Tata Power, Gujarat
Board to decide on JK House sale plan: Raymond CMD
SAIL disinvestment: SBI Cap engaged as transaction advisor
Glenmark Pharma’s overactive bladder drug gets USFDA nod
Tata Power offers to sell 51% stake in Mundra project for Re1
Indiabulls Real Estate promoter sells shares for Rs662 crore
Altice raises $1.9 billion in year’s second-biggest US IPO
USFDA plans to ease market entry of generic drugs
RBI adds 3 new members to oversight committee for bad loan resolution
Sebi relaxes open offer norms, moves to discourage P-notes
Arvind Panagariya sees action on privatising Air India in 6 months
Centre forced to cut Rs 40,000 cr expenditure, axe falls on food subsidy
US announces $7.5 mn to advance India’s power grid
AI debt unsustainable, should go to private hands: Panagariya
GST to lower overall tax burden over time, says RBI governor
Sensex makes a 136-pt rebound as bad loan fight paces up
Rupee dives to 3-week low of 64.59 against dollar

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