All You Need To Know Going Into Trade On August 28
Asian markets have opened mixed at the start of the final trading day of the week, after their U.S. counterparts eked out modest gains overnight.
U.S. Federal Reserve Chair Jerome Powell on Thursday said that the fed will seek inflation that averages 2% over time, a step that implies allowing for periods of overshoots.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, was little changed at 11,580 as of 7:00 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.
Let's take a look at the factors that may influence equities in today's session:
- Stocks opened higher in Japan and South Korea but are declining in Australia.
- Futures on the Dow Jones are trading higher by 40 points. The index ended 0.6% higher on Thursday.
- The Nasdaq composite set an intraday record before closing with losses.
- Yield premium demanded by investors on long-maturity U.S. debt compared to short-term notes rose to the most in two months.
- “Monetary policy is likely to stay accommodative for even longer,” said Tai Hui, chief Asia market strategist at JPMorgan Asset Management.
- Yield on the 10-year treasuries rose three basis points to 0.78%.
- West Texas Intermediate crude fell 0.3% to $42.9 per barrel while gold was little changed at $1,926.86/Oz.
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Stocks To Watch
- GMR Infra: Announces strategic group restructuring to separate non-airports business into a separate unit. Approves amalgamation of GMR Power Infra with itself, followed by demerging its energy, EPC and urban infra business to its wholly-owned arm GMR Power and Urban Infra. The move will make GMR Infra a pure play airports player. For every 10 equity shares of face value of Re 1 held in GMR Infra, one equity share of face value of Rs 5 in GMR Power and Urban Infra will be issued to shareholders. The non-airports business will be separately listed. Appointed date for this scheme is April 1, 2021. The board has also approved raising Rs 5,000 crore through issue of securities.
- HDFC Bank, Kotak Bank & IndusInd Bank will not be included by the FTSE Russel in its indices as they fail to meet the minimum foreign headroom requirement.
- Edelweiss Financial Services: Board approves divesting majority (51%) stake in the company's wealth management business to private investment firm PAGAC. The board has also given in-principle approval for the sale of whole or part of the asset management business of the group to a strategic investor and to explore fund raising opportunities, including option to raise capital from the strategic investors for the group's general insurance business. The wealth management business will be demerged and subsequently listed, subject to approvals.
- Sun Pharma: Chairman Israel Makov stated in the company’s annual general meeting that the company is evaluating the potential of some existing products which can be useful in the treatment of Covid-19. These include Nafamostat Mesilate and the phyto-pharmaceutical, AQCH. Both these products are currently undergoing Phase-2 trials in India. Company is targeting new markets like Japan and Greater China for specialty products.
- Allcargo Logistics: Board has considered the delisting proposal and has appointed Inga Ventures as the merchant banker. After receipt of the due diligence report from the merchant banker, the board will meet again to discuss the delisting proposal in detail.
- NMDC: Board has given in-principle approval for the proposal to demerge its Iron & Steel Plant in Nagarnar, Chhattisgarh.
- ACC: Appointed Yatin Malhotra as the new CFO from September 1. He was the ex-CFO of Whirlpool India.
- Ambuja Cements: Appointed Rajani Kesari as the new CFO from September 1. She is currently the CFO of the company’s arm ACC.
- Repco Home Finance: Aditya Birla Sun Life Mutual Fund increased stake to 6.14% from 4.87%.
- V2 Retail: Said that it has opened 4 new retail stores and closed 4 retail stores. Currently 74 retail stores are operational.
- HCC: Won three projects worth Rs 7,402 crore which were won in a joint venture in the months of July and August. Company’s share in these orders are Rs 3,337 crore.
- Atul Auto: Aditya Birla Sun Life Mutual Fund reduced stake to 2.74% from 5.01% on August 25.
- General Insurance Corporation: Atanu Kumar Das, MD and CEO of Bank of India has been appointed as director on the company’s board.
- Non-Nifty Earnings Today: Apex Frozen Foods, Filatex, Khadim, SJVN.
Earnings Reported After Market Hours
- Revenue down 40.6% to Rs 1,937.5 crore
- Net profit down 54.8% to Rs 532.9 crore
- Ebitda down 59.6% to Rs 754.9 crore
- Ebitda margin at 39% from 57.2%
- Iron Ore segment revenue down 40% to Rs 1,922.9 crore
- Pellet, other minerals and services revenue down 71.6% to Rs 14.6 crore
- Saw loss of 18.23 LT of production and 23.94 LT of sales of Iron Ore due to Covid-19
- Lost sales revenue worth Rs 737 crore and PBT of Rs 317 crore due to Covid-19
- Overall sales down 28% to 62.75 LT
- All numbers are standalone and compared on a year-on-year basis
Edelweiss Financial Services Q1FY21
- Net Interest Income down 87% to Rs 53.3 crore
- Net loss of Rs 245 crore from net profit of Rs 132 crore
- All numbers are consolidated and compared on a year-on-year basis
Goldman Sachs On Indian I.T.
- Cyclical momentum remains strong for tech services going into FY22E
- Number of structural tailwinds are emerging
- Indian I.T. companies are favourably positioned to benefit from a third wave of outsourcing
- Raise FY22-23E sector revenue and earnings forecast by up to 7%
- Expect U.S. Dollar revenue growth of 12.6% in FY22E
- Upgrade TCS to buy from neutral; price target raised to Rs 2,598 from Rs 2,097
- Upgrade HCL Technologies to neutral from sell; price target raised to Rs 767 from Rs 513
- Maintain buy rating on Infosys; price target raised to Rs 1,165 from Rs 975
CLSA On Phoenix Mills
- Buy rating maintained
- Price target raised to Rs 790 from Rs 742
- Recent equity raise to aid in building a robust project pipeline
- Proven track record in value accretive acquisitions
- Market leader in scale and trading densities
- See 12% CAGR in rental income over the next five years
- Well placed to capitalise on consolidation
- Raise FY21-23 EPS estimates mainly due to reduction in debt in the medium-term
Nomura On Adani Ports & SEZ
- Buy rating maintained
- Price target raised to Rs 420 from Rs 320
- Market share gain driven growth to continue
- Improving corporate governance in the form of reducing promoter pledge and higher payout to drive the stock
- Significantly diversified cargo and asset mix in addition to long-term contracts and reducing dependence on Mundra
- Cut EPS for FY21/22F by 2% and 4% respectively
- Raise price target on normalisation of port volumes, continuing market share gains and reduced investor risk perception
- Key Risks: Rise in promoter debt and low RoCE in new assets
Antique Stock Broking On Indian Hotels
- Initiate coverage with buy rating
- Price target of Rs 150
- Best play to navigate the current uncertainty
- Strong support from parent protects downside risk for the company
- Better placed structurally - should gain market share amid slowdown
- Balance sheet discipline remains strong
- Expect to maintain a valuation premium to peers due to strong brand
Jefferies On ITC
- Buy rating maintained
- Price target raised to Rs 265 from Rs 240
- Proposal of borrowing by states to meet revenue shortfall comes as a relief for cess products
- Stock likely to react positively on this newsflow
- On-ground challenges persist for the company
Pledged Share Details
- Shilpa Medicare: Promoter Ramkant Inani released pledge of 9 lakh shares on August 27
- Adani Enterprises: Promoter SB Adani Family Trust created pledge of 76 lakh shares on August 26.
- Motherson Sumi: Promoter Samvardhana Motherson International revoked pledge of 90 lakh shares on August 21.
- JSW Energy: Promoters created pledge of 86 lakh shares between August 25-26.
- Astron Paper & Board Mill: Promoter Kirit Patel created pledge of 21 lakh shares on August 21.
(As Reported On August 27.)
Who’s Meeting Whom
- Shriram City Union Finance: To meet Motilal Oswal Private Equity Advisors on August 28.
- CreditAccess Grameen: To meet Nomura, Kotak Mutual Fund and investors between August 31 - September 4
- Mahanagar Gas: To meet Bank of America on August 28.
- Lasa Supergenerics: To meet Abakkus AMC, Motilal Oswal Securities and Equentis Wealth on August 28.
- Polycab: To meet Spark Capital and Philip Capital on August 28.
- Wendt: Plutus Wealth Management acquired 13,040 shares (0.65%) at Rs 3,800.12 per share.
- Ceat: Westbridge Crossover Fund sold 4.07 lakh shares (1.01%) at Rs 950 per share.
- Liberty Shoes: Equity Intelligence India sold 1.91 lakh shares (1.12%) at Rs 172.55 per share.
- Saint Gobain Sekurit: Plutus Wealth Management acquired 12.47 lakh shares (1.37%) at Rs 65.71 per share.
- Thejo Engineering: Equity Intelligence India acquired 50,000 shares at Rs 675.11 per share and India Opportunities Fund sold 1.71 lakh shares at Rs 679.81 per share. The company is listed on NSE Emerge (SME Platform).
- AGM Date: Ashok Leyland, Ramco Industries, Ramco Systems, Abbott India, Fermenta Biotech.
- Fund Raising: Birla Tyres, J&K Bank, Indiabulls Venture.
- Listing: Max India.
- Delisting (Board Meeting): Xchanging Solutions.
- Record Date For Share Buyback: Triveni Engineering.
- Price Band Revised From 10% To 5%: Dish TV, Bharat Wire Ropes.
- Price Band Revised From 20% To 10%: Wendt, Usha Martin.
- Price Band Revised From No Band To 20%: Century Textiles, Equitas Holdings, Ujjivan Financial Services.
- Move Into ASM Framework: CIL Nova Petrochemicals, Affle, Bharat Wire Ropes, Intrasoft Technologies, JHS Svendgaard Laboratories, Arrow Greentech.
- Move Into Short Term ASM Framework: Allsec Technologies, Wendt, SORIL Infra Resources, Shanthi Gears, A2Z Infra Engineering.
- Move Out Of Short Term ASM Framework: Entertainment Network, Aries Agro, Trigyn Technologies, Jaiprakash Associates, Future Enterprises, Maan Aluminium, Intrasoft Technologies, Paushak.
- Godrej Industries: Promoter Godrej Seeds & Genetics acquired 73,000 shares between August 21-28.
- Alembic: Promoter Nirayu acquired 3.28 lakh shares on August 26.
- Jamna Auto: Promoter Map Auto acquired 53,000 shares on August 25.
- Somany Ceramics: Promoters acquired 3 lakh shares between August 25-26.
- Ultratech Cement: Promoter Pilani Investment sold 1.3 lakh shares on August 21.
- KEC International: Instant Holdings acquired 61,650 shares on August 26.
(As Reported On August 27)
Money Market Update
- The currency ended at a fresh five-month high of 73.82 against the U.S. Dollar on Thursday, as compared to Wednesday's close of 74.30.
- The rupee ended as the best performing currency in Asia on Thursday.
- Nifty September futures closed at 11,580; premium of 21 points from 5 points
- Nifty September futures add 39% and 44,000 shares in Open Interest
- Nifty Bank September futures closed at 23,602; premium of 2 points from 27 points
- Nifty Bank September futures add 33% and 13,000 shares in Open Interest
- Nifty Put-Call Ratio at 1.47
- Out Of F&O Ban: Ashok Leyland, BHEL, Canara Bank, GMR Infra, Indiabulls Housing Finance, Vodafone Idea, LIC Housing Finance.
Nifty Weekly Expiry: September 3
- Maximum Open Interest on Call side at 12,000 strike (15.5 lakh shares)
- Maximum Open Interest on Put side at 11,500 strike (19.3 lakh shares)
- Active Options: 11,500 Put (7.9 lakh shares) and 12,000 Call (12.1 lakh shares)
Nifty Monthly Expiry: September 24
- Maximum Open Interest on Call side at 12,000 strike (18.9 lakh shares)
- Maximum Open Interest on Put side at 11,000 strike (27.6 lakh shares)