A person tracking stock movement on the Bloomberg terminal in Mumbai. (Photographer: Anirudh Saligrama/BloombergQuint)

All You Need To Know Going Into Trade On September 12

Asian equities extended gains in early Tuesday trade, after the S&P 500 Index rose to a record high, with less damage than originally feared from Hurricane Irma supporting the case for a gradually improving U.S. economy.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.35 percent to 10,061 as of 7:09 a.m.

Here’s a quick look at all that could influence equities on Tuesday.

Global Cues

  • U.S. stocks rose to a record, the dollar strengthened and Treasuries tumbled as investors piled into riskier assets after Hurricane Irma wreaked less damage than forecast and North Korea failed to exacerbate tensions.
  • European and emerging-market equities also advanced, while gold, the yen and the Swiss franc retreated.

Asian Cues

  • Japan’s Topix index advanced 1.1 percent, while Australia’s S&P/ASX 200 Index added 0.4 percent. South Korea’s Kospi index advanced 0.3 percent.

Commodity Cues

  • Gold was steady at $1,326.29 an ounce after sinking 1.4 percent on Monday.
  • West Texas Intermediate crude was little changed at $48.06 following a 1.2 percent gain on Monday.
  • ICE Sugar ended higher for second day at 14.29 cents a pound; up 1.42 percent

Shanghai Exchange

  • Steel snaps five day losing streak; up 1 percent
  • Aluminium trades higher; up 3.32 percent
  • Zinc reverse the trend after trading lower for five days; up 1.83 percent
  • Copper breaks four day losing streak; up 0.88 percent
  • Rubber trades higher; up 0.75 percent

The key events this week:

  • U.S. retail sales and inflation data are due this week.
  • Brexit Secretary David Davis warned U.K. lawmakers that blocking the Repeal Bill could lead to a “chaotic” departure from the EU. The measure goes to a vote Monday.
  • The Frankfurt Motor Show is underway.
  • Apple Inc. will reveal its newest products on Tuesday, which will probably include new iPhones and a fresh version of the Apple watch.
  • The Bank of England will almost certainly leave policy unchanged Thursday, even though the U.K. inflation reading two days earlier may show a pickup.
  • Also due this week, India’s trade surplus and China’s August industrial production, retail sales and fixed-asset investment.
  • Australia releases jobs data on Thursday.
  • 5:30pm: July industrial production YoY; estimate 1.7 percent (prior -0.1 percent)
  • 5:30pm: India August YoY consumer price inflation; estimate 3.27 percent (prior 2.36 percent)

Source: Bloomberg

Indian ADRs

All You Need To Know Going Into Trade On September 12

Earnings To Watch

  • ABM Knowledge
  • Asahi Songwon Colours
  • Future Ligfestyle Fashions
  • Jet Air
  • Kesar Terminals
  • Orient Refractories
  • Shemaroo
  • Windsor Machines

Earnings Reaction To Watch

All You Need To Know Going Into Trade On September 12

Mawana Sugars (Q1FY18 YoY)

  • PAT up 12 times at Rs 36 crore versus Rs 3 crore
  • Aided by an extraordinary income of Rs 19 crore
  • Revenue up 29.5 percent at Rs 436.5 crore versus Rs 337 crore
  • EBITDA up 63 percent at Rs 37.5 crore versus Rs 23 crore
  • Margin at 8.6 percent versus 6.9 percent

Cochin Shipyard (Q1FY18 YoY)

  • PAT up 12.3 percent at Rs 91 crore versus Rs 81 crore
  • Revenue up 34.6 percent at Rs 556 crore versus Rs 413 crore
  • EBITDA up 12.9 percent at Rs 114 crore versus Rs 101 crore
  • Margin at 20.5 percent versus 24.5 percent

Multibase (Q1FY18 YoY)

  • PAT up 33 percent at Rs 4 crore versus Rs 3 crore
  • Revenue up 33 percent at Rs 28 crore versus Rs 21 crore
  • EBITDA up 25 percent at Rs 5 crore versus Rs 4 crore
  • Margin at 20 percent versus 21.1 percent

Neuland Labs (Q1FY18 YoY)

  • PAT down 75.8 percent at Rs 2.3 crore versus Rs 9.5 crore
  • Revenue down 22.4 percent at Rs 117.5 crore versus Rs 151.5 crore
  • EBITDA down 55.3 percent at Rs 10.5 crore versus Rs 23.5 crore
  • Margins at 9.1 percent versus 15.7 percent

Indian Toners (Q1FY18 YoY)

  • PAT down 21.7 percent at Rs 3.6 crore versus Rs 4.6 crore
  • Revenue down 21.4 percent at Rs 22 crore versus Rs 28 crore
  • EBITDA down 33 percent at Rs 4 crore versus Rs 6 crore
  • Margin at 18.2 percent versus 21.4 percent

Andrew Yule (Q1FY18 YoY)

  • Net loss of Rs 6 crore versus Net loss of Rs 2 crore
  • Revenue down 8.6 percent at Rs 64 crore versus Rs 70 crore
  • EBITDA loss at Rs 5 crore versus EBITDA loss 2.5 crore
  • Margin at -7.8 percent versus -3.6 percent

Stocks to Watch

  • InterGlobe Aviation to sell 3.35 crore equity shares. Fresh issue of 2.23 crore shares and offer-for-sale by promoters of 1.12 crore shares
  • Sun Pharma gets U.S. FDA nod for Fenofibrate Oral Tablet
  • Tata Steel says U.K. regulator has approved Regulated Apportionment Arrangement (RAA). As part of RAA, Tata Steel U.K. will pay £550 million to British steel pension scheme
  • Thyssenkrupp, Tata steel close to merger deal. Deal may come up in September (Manager Magazin)
  • Bharti Airtel launches 4G VoLTE services in Mumbai, pan India rollout by March
  • Electrosteel says CBI conducts raids at company’s offices
  • Tanla Solution to allot 14.83 lakh equity shares to promoter Tanuja Reddy pursuant to conversion of warrants into equity
  • NTPC Commissions 40 mega-watt (MW) of Rojmal Wind Energy project
  • Zee to launch premium HD English movie channel
  • Andhra Bank to cut rate on up to five-million saving accounts 50 basis points from Friday
  • Diamond Power, Kamat Hotel, Store One Retail, Adhunik Metaliks: Circuit filter revised to 10 percent
  • SORIL Holdings & Ventures: Circuit filter revised to 5 percent

IPO Watch

  • Matrimony.com IPO subscribed 67 percent on Day 1
  • Godrej Agrovet and SBI Life get SEBI approval for IPO

Bulk Deals

Liberty Shoes

  • Equity Intelligence bought 3.21 lakh shares or 1.9 percent equity stake at Rs 235.48 each
  • EQ India Fund bought 1.13 lakh shares or 0.7 percent equity stake at Rs 210.7 each
  • Elsamma Joseph bought 1.25 lakh shares 0.7 percent equity stake at Rs 23.06 each

Tata Coffee

  • Equity Intelligence buys 10 lakh shares or 0.5 percent equity stake at Rs 150 each.
  • F Born AG sold 15 lakh shares or 0.8 percent equity stake at Rs 150.01 each

Minda Corp

  • Kotak India Growth Fund II sold 21.56 lakh shares or 1 percent equity stake at Rs 117.92 each

Repro India

  • Tanya Vohra sold 55,000 shares 0.5 percent equity stake at Rs 675 each
  • Kunal Vohra sold 55,000 shares or 0.5 percent equity stake at Rs 675 each
  • Trisha Vohra sold 55,000 shares or 0.5 percent equity stake at Rs 675 each
  • Sanjeev Vohra sold 2.04 lakh shares or 1.9 percent equity stake at Rs 675.17 each
  • Param Value Investments bought 2.75 lakh shares or 2.5 percent equity stake at Rs 675 each

Omkar Specialty chemicals

  • Promoter Omkar Pravin Herlekar sold 2.45 lakh shares or 1.2 percent equity stake at Rs 87.97 each

Vardhman Textiles

  • Mahavir Shares Trust sold 7 lakh shares or 1.2 percent equity stake at Rs 1,200 each

63 Moons Technologies

  • Blackstone GPV Capital Partners (Mauritius) sold 11.24 lakh shares or 2.4 percent equity stake at Rs 70.3 each

Who’s Meeting Whom?

  • TVS Motor to meet several investors in Sept 12
  • Kalpataru Power to meet Alchemy and Phillip Capital on Sept 12 - 13
  • Cipla to meet MSD Capital, Credit Suisse and JPMorgan on Sept 12, 20 and 22
  • PI Industries to meet several investors between Sept 12-13
  • HOEC to meet L&T MF, SBI MF, Motilal Oswal AMC and IDFC MF on Sept 13
  • Syngene to meet investors in Bengaluru (Sept 8,13,21), London (Sept 25) and U.S. (Oct 30 - Nov 2)

Rupee Check

  • The rupee retreated from its one-month high to end lower by 15 paise to 63.93 a dollar on Monday.

Movers & Shakers This Month (NSE 500)

All You Need To Know Going Into Trade On September 12

Index Trends

All You Need To Know Going Into Trade On September 12

F&O Cues

  • Nifty September Futures closed with a premium of 20 points versus 15 points
  • September Nifty Futures OI up 2 percent, Bank Nifty OI up 24 percent
  • India VIX closed lower by 4.6 percent at 12.26
  • September series highest Call base at 10,000 (OI at 38.8 lakh, down 18 percent)
  • September series highest Put base shifts to 9,900 (OI 56 lakh, OI up 8 percent)
  • Call strikes 9,900, 9,950, 10,000 see OI unwinding, 10,150 & 10,200 see OI addition
  • Put strikes 9,900, 10,000 see OI addition

F&O Ban

  • In Ban: Dewan Housing Finance Corp., Indiabulls Real Estate, JP Associates, JSW Energy, Just Dial
  • New In Ban: JP Associates
  • Out of Ban: Nil

Alert: Only intraday positions can be taken in stocks which are in F&O ban. There will be a penalty in case of a rollover.

Put-Call Ratio

  • Nifty PCR at 1.43 versus 1.37
  • Nifty Bank PCR at 1.09 versus 1.15

Stocks Seeing High OI Change

  • Bata India sees OI addition of 23 percent on long side
  • Cadila Healthcare sees OI addition of 19 percent on short side
  • Berger Paints sees OI addition of 17 percent on long side
  • Torrent Pharma sees OI addition of 16 percent on short side
  • IndusInd Bank sees OI addition of 15 percent on long side
  • Petronet LNG sees OI addition of 15 percent on long side
  • Siemens sees OI addition of 12 percent on long side
  • GAIL sees OI addition of 11 percent on long side
  • Chennai Petroleum sees OI addition of 11 percent on long side
  • Jubilant Food sees OI addition of 9 percent on long side

Fund Flows

All You Need To Know Going Into Trade On September 12

Brokerage Radar

Morgan Stanley on Coal India

  • Maintain ‘Underweight’ with a target price of Rs 221
  • Coal inventory at power plants declined to 9 days versus 15-20 days
  • Expect 580 MT of production in FY18
  • Low base and improvement in power demand to aid coal demand
  • Pricing and employee wage hikes will be key to track

Morgan Stanley on Tata Steel

  • Maintain ‘Overweight’ with a target price of Rs 741
  • De-risking on pension issue; Focus will now shift to potential JV
  • Key:- deal valuations, potential synergies and modalities
  • JV to be medium term positive given overall cost reductions and improved pricing in Europe

HSBC on Tata Steel

  • Maintain ‘Buy’ with a target price of Rs 750
  • Pension settlement paving way for merger with Thyssenkrupp
  • Financial impact of settlement to reflect in Q2-FY18
  • Merger would realise annual synergies of EUR 400-600 million

UBS on IndusInd Bank

  • Maintain ‘Neutral’ with a target price of Rs 1,800
  • Merger could be EPS accretive by FY19-20
  • Assume swap ratio of 0.67 and funds savings of 125 basis points in FY19/20, then IndusInd’s EPS post-merger to increase by 1 percent and 5 percent in FY19 and FY20 respectively
  • Microfinance to generate high return on equity
  • Net interest margins to be higher by 40-45 basis points in FY19-20 estimates to 4.4-4.5 percent

Macquarie on IndusInd Bank

  • Maintain ‘Outperform’ with a target price of Rs 1,625
  • Merger to increase IndusInd’s return on assets by 9 basis points
  • MFI exposure to increase to 10 percent of loans, exposing it to more event risks
  • Synergies:- lower cost of funds, lower operating costs, better capital efficiency & higher leverage
  • Do not expect a boost to CASA ratio from the merger

CLSA on IndusInd-Bharat Financial

  • Bharat Financial benefits: lower regulatory risk and funding costs
  • IndusInd benefits: ability to leverage Tier I CAR of 30 percent and PSLC fees
  • IndusInd risk profile to rise a bit as share of micro-finance institutional loans rises
  • Normalisation of business for Bharat Financial is key

JPMorgan on IndusInd Bank

  • Maintain ‘Overweight’; Hiked target price to Rs 1,975 from Rs 1,675
  • Acquisition accretive with some near-term integration risks
  • IndusInd would get firm footing in MFI segment
  • IndusInd to enhance Bharat Financial’s profitability