Stock market data is reflected on the glasses of a trader. (Photographer: Dimas Ardian/Bloomberg)

All You Need To Know Going To Trade On Dec. 12

Asian equities opened little changed as traders await U.S. and European central bank meetings this week for further clues on the 2018 policy outlook.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.13 percent at 10,359.50 as of 6:30 a.m.

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Day Break

Global Cues

  • U.S. stocks finished higher and the S&P 500 Index rose to a record, as investors put off big bets before a series of key central bank meetings this week.

Europe Check

  • In Europe, stocks struggled for direction. Bonds rose and the euro climbed. The pound slipped, as some of the promises made to clinch a breakthrough Brexit deal last week started to fray.
  • The Stoxx Europe 600 Index fell less than 0.1 percent.

Asian Cues

  • The Topix index and the Nikkei 225 Stock Average were little changed.
  • Australia’s S&P/ASX 200 Index rose 0.2 percent and the Kospi index fell 0.5 percent.
  • Futures on Hong Kong’s Hang Seng Index added 0.1 percent.
  • The MSCI Asia Pacific Index was little changed.

Here are some key events scheduled for the remainder of the week:

  • Fed policy makers on Wednesday are projected to raise the target range for their benchmark interest rate against a backdrop of continuing robust U.S. economic conditions, a vibrant labor market and forecasts for inflation to pick up.
  • The European Central Bank, the Bank of England and the Swiss National Bank set monetary policy at their respective meetings on Thursday.
  • Among top U.S. economic reports are consumer inflation on Wednesday and retail sales on Thursday.
  • European lawmakers continue to debate Brexit and weigh moves on the next step, while North America Free Trade Agreement negotiators meet again.

Commodity Cues

  • West Texas Intermediate crude was little changed at $57.93 a barrel after gaining 1.1 percent.
  • Gold traded at $1,243.99 an ounce.
  • Sugar ends near seven-week low at 13.95 cents per pound

Shanghai Exchange

  • Steel trades higher for second day; up 0.5 percent.
  • Aluminium trades higher for second day; up 0.6 percent.
  • Zinc trades higher; up 1.5 percent.
  • Copper trades higher for third day; up 1.2 percent.
  • Rubber trades higher for second straight day; up 0.3 percent.

India Data To Watch

  • 5:30pm: Oct. industrial production YoY; est. 2.9 percent (prior 3.8 percent)
  • 5:30pm: India Nov. YoY consumer price inflation; Est. 4.28 percent (prior 3.58 percent)
  • 12/12-12/29: Q3 BoP current account balance, est. -$8.30 billion, (Prior -$14.30 billion)

Indian ADRs

Earnings To Watch

  • Axiscades Engineering Tech.
  • Chartered Logistics.
  • Deccan Gold Mines.
  • Goldstone Infra.
  • Gujarat Apollo.
  • Lincoln Pharma.
  • Nitesh Estates.
  • Poddar Housing.
  • Simbhaoli Sugars.
  • Speciality Restaurants.
  • Talwalkars Better Value Fitness.

Earnings Reaction To Watch

Repro India (Q2, YoY)

  • Revenue down 7 percent at Rs 69.55 crore.
  • Net profit down 86 percent at Rs 2.5 crore.
  • Ebitda loss at Rs 2.1 crore.
  • Margin at -3 percent versus 10.9 percent.

Arss Infra Projects (Q2, YoY)

  • Revenue down 59 percent at Rs 51 crore.
  • Net loss of Rs 28 crore versus loss of Rs 56 crore.
  • Ebitda loss at Rs 16 crore versus Ebitda loss of Rs 37 crore.
  • Margin at -31.4 percent versus -29.6 percent.

Lasa Supergenerics (Q2, QoQ)

  • Revenue up 9 percent at Rs 64.5 crore.
  • Net profit up 24 percent at Rs 8.7 crore.
  • Ebitda down 14 percent at Rs 12.5 crore.
  • Margin at 19.4 percent versus 24.6 percent.

Mawana Sugar (Q2, YoY)

  • Revenue down 9.6 percent at Rs 175 crore.
  • Net loss of Rs 11 crore versus loss of Rs 9.5 crore.
  • Ebitda loss at Rs 10 crore.
  • Margin at -5.7 percent versus 0.5 percent.

Andrew Yule (Q2, YoY)

  • Revenue down 28.6 percent at Rs 95 crore.
  • Net profit up 31 percent at Rs 21.7 crore.
  • Ebitda down 28 percent at Rs 13.1 crore.
  • Margin at 13.8 percent versus 13.7 percent.

Nandan Denim (Q2, YoY)

  • Revenue up 37 percent at Rs 415 crore.
  • Net profit down 0.6 percent at Rs 16.1 crore.
  • Ebitda up 27 percent at Rs 63 crore.
  • Margin at 15.2 percent versus 16.3 percent.

V2 Retail (Q2, YoY)

  • Revenue up 33.5 percent at Rs 137.5 crore.
  • Net profit up 285 percent at Rs 5 crore.
  • Ebitda up 46.3 percent at Rs 9.8 crore.
  • Margin at 7.1 percent versus 6.5 percent.

Associated Alcohol and Breweries (Q2, YoY)

  • Revenue up 4.9 percent at Rs 64 crore.
  • Net profit at Rs 3.6 crore.
  • Ebitda up 14.3 percent at Rs 8 crore.
  • Margin at 12.5 percent versus 11.5 percent.

Stocks To Watch

  • Dr. Reddy’s Bachupally formulations plant 3 gets U.S.FDA EIR.
  • GNA Axles started commercial production from its two newly installed Automated Machining Lines at its unit in Punjab.
  • Asian Paints acquired remaining 49 percent stake in Sleek from Ahuja Family for Rs 50 crore.
  • Xpro India sold land located in Kolkata for Rs 21 crore.
  • Tata Teleservices total number of subscribers in November, down 4.1 percent at 70.74 lakh versus. 73.78 lakh in October.
  • L&T Infotech completes acquisition of 100 percent stake in banking solution provider Syncordis SA.
  • Natco Pharma QIP opens at a floor price fixed at Rs 937.63 per share.
  • Canara Bank floats request for proposal to select bankers to raise equity through a QIP.
  • SC to hear matter of ban on pet coke and furnace oil on Dec. 13.

Bulk Deals

  • JK Paper: Societe de Promotion et de Participation Pour la Cooperation sold 21.58 lakh shares or 1.2 percent equity stake at Rs 136 each.
  • Radico Khaitan: Societe Generale sold 14.88 lakh shares or 1.1 percent equity stake at Rs 270.05 each.

NBCC

  • Morgan Stanley France SAS sold 73.31 lakh shares or 0.8 percent equity stake at Rs 260.4 each.
  • Societe Generale bought 73.31 lakh shares or 0.8 percent equity stake at Rs 260.4 each.

SREI Infra

  • Morgan Stanley France SAS sold 28.24 lakh shares or 0.6 percent equity stake at Rs 100.65 each.
  • Societe Generale bought 28.24 lakh shares or 0.6 percent equity stake at Rs 100.65 each.

Trading Tweaks

  • Wipro buyback date revised from Nov. 29 - Dec. 13.
  • Chaman Lal Setia circuit filter revised to 10 percent.
  • SRS circuit filter revised to 5 percent.
  • Future Retail last trading day under T group.

Who’s Meeting Whom?

  • MGL to meet Ask Investment Managers and BOB Capital on Dec. 12.
  • Jyothy Labs to meet over 15 fund houses including IDFC MF, IIFL AMC, Tata MF, Taurus MF and others on Dec. 12.
  • Emmbi Industries to meet over 15 investors including Motilal AMC, Max Life, ICICI Prudential Life and others on Dec. 12.
  • TCI Express to meet over 20 fund houses like Tata MF, UTI MF, Edelweiss AMC, Mirea AMC and many others on Dec. 12.
  • Tata Motors to meet DSP Merrill Lynch on Dec. 12 and Credit Suisse Securities on Dec. 13.
  • UFO Moviez to do a roadshow in Hong Kong and Singapore from Dec. 13-15.
  • Eclerx to meet Edelweiss Securities on Dec. 13 and JP Morgan Asset Management on Dec. 15.
  • TVS Motors to meet Tree Line Asia Master Fund on Dec. 14.
  • Trent to meet Axis Mutual Fund on Dec. 21.

Insider Trades

  • Bajaj Finance director Sanjivnayan Bajaj bought 88,000 shares on Dec. 8.
  • Lupin promoter buys 45,000 shares on Dec. 8.
  • JP Associates promoter sells 30,000 shares on Dec. 8.
  • Digjam promoter sells 1 lakh shares on Dec. 7 - 8.

Rupee

  • Rupee closed at 64.37/$ on Monday from 64.46/$ on Friday.

Top Gainers And Losers

Index Trends

F&O Cues

  • Nifty December Futures trading at 10,346, premium of 24.4 points versus 26 points.
  • December Futures: Nifty open interest up 1 percent; Bank Nifty open interest up 2 percent.
  • India VIX at 14.1, up 3.5 percent.
  • Max open interest for Dec. series at 10,500 Call (open interest at 53.2 lakh, down 5 percent).
  • Max open interest for Dec. series at 10,000 Put (open interest at 85.4 lakh, down 2 percent).

F&O Ban

  • In ban: Fortis, HDIL, IRB Infra, Jet Airways, Jain Irrigation, JP Associates and JSW Energy.
  • New in ban: Fortis.

Only intraday positions can be taken in stocks which are in F&O ban. In case of a rollover of these intraday positions, there is a penalty.

Stocks Seeing High Open Interest Change

Fund Flows

Brokerage Radar

Credit Suisse on Zee Entertainment

  • Maintained ‘Outperform’ with price target of Rs 610.
  • Expect strong report in the second half; positive growth outlook on advertising and subscription.
  • Cut in GST rates to support advertising in the next financial year.
  • Phase 3 digitisation benefits should start benefiting Zee in the next financial year.
  • OTT launch another near-term trigger.
  • Like both the near and medium-term story at Zee.

Goldman Sachs on Motherson Sumi

  • Upgraded to ‘Buy’ from ‘Neutral’; Raised price target to Rs 430 from Rs 318.
  • Best positioned among our India autos coverage.
  • Wiring Harness - Largely insulated from electric vehicles; positively exposed to AVs.
  • Polymer Parts - Integral to premiumization, light-weighting and safety; EV/AV positive.
  • Rear View Mirrors - Digital mirrors are closer than they appear and more profitable
  • Raise revenue estimates for the next three financial years by 5 percent, 9 percent and 8 percent respectively.
  • Raise operating income estimates for for the next three financial years by 5 percent, 17 percent and 21 percent respectively.
  • Positives: global structural trends of premiumisation, light-weighting, modularisation and vendor consolidation.

Jefferies on Indian Energy Exchange

  • Initiated ‘Buy’ with price target of Rs 1,950.
  • IEX has a headstart in the power exchange market.
  • IEX to gain market share from less transparent bilateral traders.
  • Transparency to drive rise in exchange volume share.
  • Medium term power oversupply provides an additional safety net.
  • Expect volumes and net profit to grow at compounded rate of 14 percent by March 2020.
  • Pricing, a concern area, but within CERC trader limits.
  • High dividend payout ratio is a key positive; To keep return on equities more than 40 percent.
  • Bull Case price target of Rs 2,247.

Edelweiss on Asian Granito

  • Initiated ‘Buy’ with price target of Rs 720.
  • Well placed to leverage its vast distribution network and strong brand equity.
  • Prudently shifting focus to high-margin retail segment.
  • Rising utilisation and focus on premium products to propel bottom line.
  • Expect revenue, operating income and net profit to grow at a compounded rate of 14 percent, 21 percent and 40 percent respectively by March 2020.
  • Expect return on capital employed to expand to 20 percent by March 2020, compared to 12 percent clocked in the previous financial year.
  • AGL entails strong re-rating potential on improvement in retail mix.

Edelweiss on Century Plyboards

  • Initiated ‘Buy’ with price target of Rs 442.
  • Only integrated player with presence across wood panel industry.
  • Capacity in place to tackle burgeoning opportunities.
  • Lower raw material cost to spur margin.
  • Company in last stage of capex and is well-positioned to reap benefit of anticipated demand.
  • Expect revenue, operating income and net profit to grow at a compounded rate of 20 percent, 24 percent and 28 percent respectively by March 2020.
  • Strong compounding play in domestic wood panel industry.
  • Positive: Favourable GST rate, shift to organised players and government’s focus on housing.

Edelweiss on Greenlam Industries

  • Initiated ‘Buy’ with price target of Rs 1,477.
  • Leader to rake in GST benefits; Well leveraged to expand product basket.
  • Expect veneer business to turnaround by the next financial year.
  • Capex through, time to reap benefits.
  • Financial leverage to propel bottom-line growth.
  • Expect revenue, operating income and net profit to grow at a compounded rate of 12 percent, 21 percent and 35 percent respectively by March 2020.
  • Expect healthy growth in existing segments and turnaround in newer segments.
  • Strong re-rating potential.

Edelweiss on Greenply Industries

  • Initiated ‘Buy’ with price target of Rs 395.
  • Expect pick up in real estate market, demand shift to organised players to propel growth.
  • MDF capacity augmentation: Potent revenue booster.
  • Plywood business perking up; high outsourcing to bolster revenue.
  • Tripling capacity to drive growth and to keep margins under pressure.
  • Expect revenue, operating income and net profit to grow at a compounded rate of 20 percent, 22 percent and 21 percent by March 2020.
  • Aggressive capex phase by March 2019, to keep return on capital employed under pressure.
  • Triggers: start of MDF capacity and pick up in plywood demand.
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