All You Need To Know Going Into Trade On Aug. 19

Stocks in Asia gained along with U.S. futures early Monday as traders kicked off a busy week for economic data and awaited commentary from the Federal Reserve Chief Jerome Powell.

Shares in Tokyo, Seoul and Sydney were higher and S&P 500 contracts rose. he Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.15 percent to 11,070 as of 7 a.m.

Short on time? Well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.

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

• Asian markets was supported by a positive close on Wall Street Friday and comments from President Donald Trump on trade talks with China.
• Treasury yields continued to recover from multiyear lows reached last week, when an inversion in the yield curve sparked recession worries.
• With market volatility soaring in August, Federal Reserve Chair Jerome Powell’s address at the Kansas Fed’s annual Jackson Hole gathering on Friday will be key to gauging whether U.S. policy makers will add to July’s rate cut.
• Meanwhile, crude climbed after a drone attack on oil and gas facilities in Saudi Arabia underscored geopolitical risk in the Middle East. Gold slipped 0.3 percent to $1,509.25 an ounce.

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Brokerage Radar

Nomura on Ujjivan Financial

• Maintained ‘Reduce’ with a target price of Rs 270.
• Separate listing would lead to a 50 percent holding company discount.
• Arrive at Rs 37-39 per share fair value for the bank if listed.
• Continue to prefer Equitas over Ujjivan within the small finance bank space.
  

Credit Suisse on financial stocks

• Credit growth now slowing at private banks along with non-banking finance companies.
• Non-corporate slippages inch up, recoveries remain low.
  ICICI Bank, Axis Bank and HDFC Bank are preferred picks.
  HDFC, LIC Housing, MM Financial are preferred NBFC picks.

JP Morgan on Indian Hotels

• Maintained ‘Overweight’; price target Rs 175.
• Sufficient margin levers to deliver double-digit earnings growth.
• Significant focus on cost improvement to drive margin improvement.
• Expect the hotel cycle to improve in second half of financial year 2020 onwards.
• Focus on growing the network in an asset light manner
  

JP Morgan on Lemon Tree Hotels

• Maintained ‘Neutral’; cut target price to Rs 62 from Rs 78.
• Cautious of a potentially soft second quarter and new asset commissioning impact.
• Time for another long-term visit maybe some time away.
• Expect ARRs to improve in the seasonally strong second half of financial year 2020.
  

CLSA on Maruti Suzuki

• Maintained ‘Buy’; cut target to Rs 7,200 from Rs 7,400.
• Cut financial year 2020-21 EPS by 8-10 percent on lower volumes.
• Demand weak but passenger vehicles better placed for a recovery.
• Demand recovery should lift margins; commodity prices tailwind.
• Maruti is best way to play Indian auto recovery.

Stocks To Watch

• Ujjivan Financial Services: Unit Ujjivan Small Finance Bank filed DRHP with SEBI for proposed initial public offering, comprising fresh issue of equity shares aggregating to Rs 1,200 crore.

• Sun Pharma and China Medical System Holdings entered into a licensing agreement for generic products to develop and commercialise seven generic products in mainland China.
• Bosch: VK Viswanathan resigned from post of Chairman and Non-Executive Director with effect from Aug. 23 as part of succession planning.
• J&K Bank: Anti-corruption bureau registered a fresh case in the loan fraud worth over Rs 350 crore in Jammu & Kashmir Bank on Friday and conducted searches at different places in Bengaluru. (PTI)
• DHFL stated that it is not in a position release quarterly results in time due to full time engagement of accounts and finance teams in various non-routine audits and the due diligence by various parties. Company to ensure submitting the quarterly results by Sept. 14.
• Himatsingka Seide clarified that concerned authorities in Karnataka have audited company’s manufacturing facilities and have not found any non-compliance with regulations. All wage related and statutory requirements have been duly acknowledged by the Labour Department.
• Amtek Auto: The National Company Law Appellate Tribunal declined to extend resolution period in the company’s insolvency case. NCLAT stated that since 270 days have already passed, National Company Law Tribunal should pass orders on liquidation.
• DCM: Crisil downgraded bank loan facilities worth Rs 375.88 crore to ‘CRISIL D’ (Default) from ‘CRISIL BB+’, due to delays in repaying the interest and principal obligation on the term loan.
• NACL Industries said that a new facility is being built at the Srikakulam site to meet the expected growth in demand for technicals as well as intermediates and at Ethakota Plant manufacturing of new product "SMASH” has commenced.
• Kridhan Infra arm secured orders worth Rs 145 crore for various works at Hyderabad International Airport.
• Simplex Infra: CARE Ratings downgraded long term short loan facilities worth Rs 1195 crore to ‘BBB’ from ‘A-’, with outlook remaining Negative.
• Info Edge increased its stake in Shopkirana to 25.36 percent for Rs 47 crore.
• BEML: Order Book position at Rs 8,917 crore on June 30.
• TVS Motors to invest $3.2 million in U.S.-based Predictronics Corporation, which specialises in providing end-to-end predictive maintenance analytics solutions.
• Cupid bagged Rs 14 crore order from Uganda for supply of male condoms
• Coffee Day Enterprises says total debt of group at Rs 4970 crore. Debt of group will reduce by Rs 2400 crore post Global Village Tech Park deal. The company expected to have a comfortable position to service the reduced debt obligations.

New Offering

• Spandana Sphoorty Financial shares to start trading after IPO gets 1.05 times demand at Rs 856 each.
• Ujjivan Financial seeks SEBI approval to raise Rs 1,200 crore before filling DRHP.

Bulk Deals

Balaji Telefilms

• Gothic Corporation acquired 18.42 lakh shares (1.81 percent) at Rs 50.5 each.
• India Capital Fund sold 25.6 lakh shares (2.54 percent) at Rs 50.5 each.

Cox & Kings

• State Street Bank & Trust acquired 11.62 lakh shares (0.66 percent) at Rs 7.1 each.

Reliance Capital

• Jupiter India Fund sold 14.46 lakh shares (0.57 percent) at Rs 48.43 each.

Trading Tweaks

• Spandana Spoorthy Financial to be listed on bourses.
• HSIL ex-date for spinoff.
• Seshasayee Paper & Boards ex-date for stock split from Rs 10 to Rs 2.
• Omax Autos to move into short term ASM Framework.
• Jagran Prakashan to move out of short term ASM Framework.
• Godfrey Phillips, Omax Autos, Tourism Finance Corporation of India price band revised to 10 percent.
• Mcleod Russel to move out of ASM Framework.

Who’s Meeting Whom

• Supreme Industries to meet HDFC Life Insurance and Fidelity International on Aug. 19.
• TVS Motor to meet CGS-CIMB Securities on Aug. 19.
• Hindalco to meet Fidelity International on Aug. 20.
• Inox Leisure to meet Haitong Securities and B&K Securities on Aug. 19.

Insider Trading

• Tourism Finance Corporation of India promoters sold 4 lakh shares on Aug. 13.
• Jindal Stainless promoter Ratan Jindal acquired 1.43 lakh shares from Aug. 9-13.
• Max Ventures and Industries promoter Siva Enterprises acquired 1.8 lakh shares from Aug. 13-14.

Money Market Update

Sovereign bond traders will focus on the Reserve Bank of India’s plan to convert Rs 22,000 crore of government bonds to longer-dated debt. On Friday, global funds purchased more than Rs 800 crore of government bonds under the limits available to foreigners and sold over Rs 300 crore of corporate debt.

Traders this week will also be looking forward to release of the minutes of the central bank’s most-recent monetary-policy meeting. The RBI reduced interest rates by 35 basis points earlier this month.

On Friday, yield on the benchmark 10-year government debt fell 9 basis points to 6.54 percent as lower oil prices, drop in U.S. Treasury yields and reports that the government may refrain from a fiscal stimulus to revive growth supported sentiment.

The rupee is likely to open strong after a revival in risk appetite lifted other emerging-market currencies. Implied opening from forwards suggest the rupee may start trading at 71.15 to the dollar.

Markets are taking comfort in the silver linings, led by some degree of tone-down in the U.S.-China trade conflict, and hopes of German fiscal stimulus, according to Vishnu Varathan, head of economics and strategy at Mizuho Bank in Singapore.

On Friday, the rupee gained 0.2 percent to close at 71.16 to the dollar.