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Friday, 30 June 2017

30 June 2017 - Views & News

MARKET INSIGHT

Nifty is likely to open on a negative note based on the global cues. Support for the day is placed at 9470 levels and if breaks then further downside expected. 

Nifty Spot Levels 

Support  9473 – 9341 
Resistance  9560 - 9600

GLOBAL MARKET

· Wall Street fell sharply on Thursday with the S&P 500 and Dow industrials on track for their worst daily drops in six weeks as investors continued a recent move out of technology shares.

· The CBOE Volatility index , the widely followed barometer of expected near-term stock market volatility, rose as high as 15.16, its highest level in six weeks.

· The Dow Jones Industrial Average fell 167.7 points, or 0.78 percent, to 21,286.91.

MARKET UPDATE

Sgx Nifty  -46 pts Dow -167.58 pts ,Nsdq -90.06 pts , S&P -20.99 pts‎, Bovespa +220 pts , Ftse -37 pts , Dax -231 pts , Cac -98 pts , Nikkei -239 pts now , Crude @ $44.95 brl (+0.02), Brent @ $47.51 brl (-0.02) , Gold @ 1246.80 (+1.00), Silver @ $16.614 (+0.02), Euro @ $1.1441, JPY @ $112.0000, INR @ $64.795

Today's Corporate Action 30th June  Ex Date

HEROMOTOCO Final Dividend - Rs. - 30.0000
JSWENERGY Dividend - Rs. - 0.5000
TATACOFFEE Dividend - Rs. - 1.5000
TATACOFFEE Special Dividend - Rs. - 0.2500

TOP NEWS

ALERT - Grasim Industries, Aditya Birla Nuvo: Private equity firm values financial services arm of AB Nuvo at Rs35000 crore (significantly higher than our valuation of Rs20000 crore) – positive for Grasim Industries
PremjiInvest (Indian private equity firm) has invested an estimated Rs700 crore to buy a 2.2% stake in Aditya Birla Capital (formerly Aditya Birla Financial Services, holding company of the financial services business of AB Nuvo, a subsidiary of Grasim) as per media reports. The proposed transaction values ABCL at Rs32000 crore. In our SOTP based valuation for Grasim, we had valued financial services business at Rs20000 crore which is much below the valuation given by the private equity firm. The development is positive for Grasim Industries.

Banking Sector; JP Associate, Ultratech:  The sale of cement assets of Jaiprakash Associates (JAL) and Jaypee Cement Corporation (JCCL) to UltraTech Cement for Rs 16,189 crore has been concluded. With this a part of debt of JAL and JCCL would be transferred from stressed account to AAA rated company – Positive read thru for banks (like ICICI, AXIS, Yes Bank etc), JP Associates and Ultratech.

 Auto: Transport buses (buses for transport of 10 or more persons) to attract tax of 43% under GST (15% cess over GST rate of 28%) as compared to current tax rate of about 27.8%; negative read thru for Ashok Leyland, Eicher Motors and Tata Motors

Oil and Natural Gas Corp (ONGC) and Hindustan Petroleum Corporation (HPCL) merger is likely to get cabinet approval by August-2017 as per the media reports - positive read through for ONGC

 Interglobe Aviation (Indigo) has submitted a letter of interest to the government to acquire the international airline operations of Air India and Air India Express – Sentimentally positive for Interglobe Aviation (Indigo)

 Thomas Cook India acquires Kuoni's destination management network for Rs 125 crore; the acquisition is funded through internal accruals and is valued at 5x its PBT – positive read through for Thomas Cook India as acquisition make TCIL a global outbound tourism player…(detail in other news)


OTHER NEWS

ITC’s packaged food business posts 13 per cent revenue growth in FY17 – positive read through for ITC
ITC’s stated leadership ambition in India’s packaged foods business inched a step closer to reality last year, with a 13 per cent increase in sales closing the revenue gap between cookies giant Britannia and Nestle. In ITC’s latest annual report its packaged food business revenue in 2016-17 increased to Rs 8,036.4 crore from Rs 7,097.5 crore the year before, compared with Britannia’s revenue of Rs 8,684.39 crore (Rs 7,947.9 crore the year before). Nestle India had clocked sales of Rs 9,223.8 crore last fiscal (it follows Jan-Dec fiscal). ITC, therefore, appears to be on course to realise its leadership goal by overtaking both Britannia and Nestle in the foods business over the next 2-3 years. The revenue growth would be brought about by the accelerated introduction of new products, and entry into 7-8 newer categories. The company plans to introduce about 40 new food products in the next one year — a record for ITC — and has recently started selling premium chocolates and coffee. It is the market leader in packaged flour and premium cream biscuits, and the second-largest player in snacks and instant noodles.

Thomas Cook India acquires Kuoni's destination management network for Rs 125 crore; the acquisition is funded through internal accruals and is valued at 5x its PBT – positive read through for Thomas Cook India as acquisition make TCIL a global outbound tourism player
Thomas Cook India (TCIL) has finalised the acquisition of a significant part of Switzerland-based Kuoni's global destination management specialists. The acquisition is seen as a part of its growth strategy with growth in Indians outbound travel plans. The price of the deal is Rs 125 crore and the valuation is about 5 times profit before tax and has been funded entirely from Thomas Cook’s internal accruals.
With this acquisition TCIL is become global player in outbound tourism with a business in Hong Kong to a leading Asian travel business with footprint across 22 countries -- from Australia, South east Asia, China, south and Eastern Africa, middle east and north American continent
. 
 BHEL has signed technology collaboration agreement with Kawasaki Heavy Industries Ltd, Japan,  for the manufacture of stainless steel coaches and bogies for Metro Rail; Positive read thru  

Reliance Industries (RIL) has applied for license from Petroleum and Explosives Safety Organisation for home delivery of motor fuel as per the media reports - positive read through for RIL

Real Estate Sector: The government has notified GST rate for construction of real estate at 18% as against 12% announced earlier. However, the rate of 18% would now be charged on two-thirds of under-construction property value which is expected to be same as 12% on the entire value of property announced earlier. The development is neutral read thru for real estate sector.

KEC International, Ujaas Energy, Indosolar, Websol and Gujarat Borosil to be in focus- Tamil Nadu government to set up Rs 2,350 crore ultra mega solar photovoltaic power park and will establish the 500 MW power park on EPC basis.

Interglobe aviation: IndiGo has expressed an interest to buy the international business of Air India and has told the government it is open to buy the entire operation of the Air India if demerging international business is not possible. The development is positive read thru for Interglobe aviation.

ITC’s non-cigarette FMCG sales cross $2-billion mark in FY17 – positive read through for ITC
As per ITC’s Annual Report for FY2017, the cumulative sales of ITC’s non-cigarette FMCG brands has crossed the $2-billion mark in the fiscal ending March 2017, at Rs 14,000 crore growing by 16 per cent over the previous year. This includes ITC's 25 FMCG brands spanning packaged food, personal care, education and stationary products, apparel, agarbatti and safety matches. While ITC's packaged food business is already profitable, the other FMCG businesses are yet to become profitable. The foods business is expected to be the majority contributor to its goal of achieving a turnover of Rs 1 lakh crore from its non-cigarette FMCG businesses by 2030.

Infosys takes $1 million settlement amid visa allegations
In a statement, New York Attorney General Eric T. Schneiderman announced that Infosys would be paying a million dollars after an investigation into the firm’s abusive practices. According to the allegations by New York State, Infosys illegally obtained foreign workers through the B-1 visa and got them to take jobs that Americans had previously done.

Wipro and Hewlett Packard Enterprise (HPE) to deliver consumption based IT for customers
HPE and Wipro announced a new global go-to-market agreement to provide joint customers with on-premises IT infrastructure at flexible consumption-based pricing. This collaboration will leverage HPE’s Flexible Capacity and Wipro’s infrastructure-as-a-service offerings to address the increasing customer demand for consumption based IT.

MORE NEWS

Banks consortium concludes largest asset resolution
MRP of products sold online mandatory from 2018
DIPP revamping mfg, industrial policy: Sitharaman
Axis has exposure to 8/12 RBI named accounts
UltraTech acquires Jaiprakash group cement business
RBI to remain open on July 1 to facilitate transactions
Govt to strengthen NCLT for speedy resolution of stressed assets
Centre plans to integrate GST with PAN
Sebi chief cautions MFs on NPA spillover
Fund raising via QIP hits eight-year high; banks lead
IndiGo wants Air India's overseas business
Rs 10,000-cr bad debt: SBI moves NCLT against Electrosteel
Crisil buys 8.9% CARE stake held by Canara Bank
RBI directive on withdrawals, transfers by payment banks
IndiGo wants Air India's overseas business
ICICI Bank-led consortium complete Rs. 16,189-cr Jaypee-UltraTech deal
1.6 lakh new businesses register on GSTN in 4 days
Bankruptcy proceedings: NCLT to rule on Jyoti Structures on Monday
IRDA identifies 6 insurers to take over Sahara India Life Insurance
Indian money in Swiss banks at Rs4,600 crore, a record low
Tata Steel subsidiary Tinplate seeks to undertake business on its own
Reliance Jio unveils new Asia-Africa-Europe submarine cable system
GST implementation will remain a challenge for government: Asian Development Bank
P-note investments hit seven-month high of Rs 1.81 lakh crore in May
Moody's gives China-backed AIIB a triple-A credit rating
Sebi cautions MFs on debt fund play
Sebi slaps Rs 26 lakh on individual in unauthorised investment advisory case
Spice to re-enter phone race, forms JV with China's Transsion
Rupee crumbles to 1-mth low on capital outflow fears
ED attaches Radisson Blue hotel in NSEL case

STOCK IN NEWS

  • Samsung invests $1.9 bn in US ahead of Moon visit 
  • Jaypee acquisition led by desire to straddle entire country: KM Birla 
  • IndiGo wants Air India's overseas business 
  • Kesoram Industries, has bought back its heavy chemicals and spun pipes businesses that it sold in 2015-16. The businesses have been bought back for around Rs 400 crore from Camden Industries. 
  • JSW Steel proposes Rs 2,100-cr iron ore, coal slurry pipeline in Karnataka 
  • Vedanta makes $3-bn bet to re-energise biggest oilfield 
  • Premji Invest picks 2.2% stake in Aditya Birla Capital 
  • DHL invests Rs 100 cr in expansion of Delhi gateway; aims to double exports 
  • 3Apollo LogiSolutions raises Rs 485 cr from Piramal; expects GST to aid biz 
  • ICICI Bank-led consortium completes Rs 16,189-crore asset resolution 
  • Fourth generation Honda City cars cross sales milestone of 2.5 lakh units 
  • Rs 10,000-cr bad debt: SBI moves NCLT against Electrosteel

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