All You Need To Know Going Into Trade On December 1
An RER metro train in the La Defense business district of Paris, France. (Photographer: Benjamin Girette/Bloomberg)

All You Need To Know Going Into Trade On December 1

Asian markets have opened higher this morning, despite an overnight drop in global equities. Investors are embracing risk assets again after an unprecedented month of gains.

Benchmark indices in Japan, Australia and South Korea have opened higher. Gold has held losses while Bitcoin rallied back to an all-time high.

The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, was little changed at 13,011 as of 6:55 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:

  • Futures on the Dow Jones are currently trading higher by 110 points. The index ended 0.9% lower on Monday.
  • Nasdaq outperformed its peers on Monday, touching a record high. An MSCI gauge of global stocks posted its best month on record, gaining 12% in November.
  • Moderna surged 20% on Monday after the company said that it plans to request clearance for its Covid-19 vaccine in U.S. and Europe.
  • “I feel pretty confident that portfolios should be positioned for continued good performance from equity markets as we head into 2021,” Chris Iggo of AXA Investment Managers said in a note.
  • U.S. Federal Reserve Chair Jerome Powell will testify before the Congress today and Wednesday.
  • Yield on the 10-year treasuries stood at 0.85%.
  • West Texas Intermediate crude traded at $45.27 per barrel. The OPEC+ meeting, scheduled to take place today to hash out production cuts for next year was rescheduled as 'further consultations' were needed, according to a letter accessed by Bloomberg.

Get your daily fix of the global markets here.

All You Need To Know Going Into Trade On December 1

Stocks To Watch

  • Dr Reddy's Laboratories: To acquire select anti-allergy brands from Glenmark in Russia, Ukraine, Kazakhstan and Uzbekistan. The acquired brands represent two types of products - mometasone mono product and a combination of mometasone with azelastine, and are indicated for the treatment of Seasonal and Perennial Allergic Rhinitis.
  • Indiabulls Housing Finance: Sold further portion of its stake in OakNorth Bank Plc worth Rs 93 crore. Total funds raised so far since September now at Rs 2,670 crore, including QIP and stake sale.
  • TVS Motor: To acquire 100% stake in advanced fleet management solutions provider Intellicar Telematics for a cash consideration of Rs 15 crore.
  • HCC: Hindustan Construction Company, in a Joint Venture with Vensar Constructions has been awarded two separate contracts worth Rs 236 crore from the North East Frontier Railway. HCC's share in the JV stands at 55%.
  • India Grid Trust: Signs share purchase agreement to acquire 74% stake in Parbati Koldam Transmission from Reliance Infrastructure. The implied enterprise value for the same is Rs 900 crore and is subject to relevant approvals and completion of contractual obligations.
  • Kesoram Industries: Fund raising committee and board approve issuance of NCDs or OCDs aggregating to Rs 2,200 crore on a private placement basis. Approval has also been granted to convert loan worth Rs 100 crore into equity shares. The company will also issue zero coupon optionally convertible redeemable preference shares up to Rs 500 crore to existing lenders. Board has also decided to enhance the limit of fund raising plan up to Rs 3,000 crore through equity, debt or any method deemed fit.
  • Gufic Biosciences: Granted patent by the Eurasian patent office for invention of a 'freeze dried parenteral composition of tigecycline and process for preparation thereof. Tigecycline is a tetracycline antibiotic medication used for a number of bacterial infections and is used to treat certain serious infections including community acquired pneumonia.
  • SRF: The company's resin plant, set-up in Thailand by its wholly-owned subsidiary has been commissioned and capitalised at a cost of $19 million.
  • Premier Explosives: Wins contract worth Rs 14 crore from Ministry of Defence for supply of 26 mm Chaffs.
  • CSB Bank: Cuts MCLR across various tenors by 10 basis points, effective December 1, 2020.
  • Finolex Cables: Makes an addition to its portfolio with the launch of anti-bacteria fans.
  • Max Financial Services: IRDAI approves transfer of 39 crore equity shares constituting 20.57% of the paid-up equity share capital of Max Life Insurance Company Limited held by Mitsui Sumitomo Insurance Company Limited to Max Financial Services Limited in exchange for issuance of 7.54 crore equity shares of the parent of Rs 2 each at a price of Rs 565.11 on a preferential allotment basis, constituting 21.87% of issued and paid-up share capital. This will effectively result in Max Financial Services Limited's stake in Max Life increasing to 93.10%. Presently, it holds a 72.5% stake in Max Life and Mitsui Sumitomo owns 25.5% stake.
  • Punjab National Bank: Base rate cut by 15 basis points to 8.65% from 8.8%, effective from December 1, 2020.
  • Tata Steel Long Products: Tata Steel has completed the open market sale of 4.51 lakh shares between November 23-27. Tata Steel now holds 74.91% stake in the company, in compliance with the minimum public shareholding norms.
  • Odisha Mineral Development Corporation: Gets order from the Steel & Mines department of the Government of Odisha, allowing the company to dispose stock from its Bhadrasahi Iron & Manganese mining lease over 998.7 hectares.
  • Future Supply Chain Solutions: Appoints DMKH & Co. as statutory auditors.
  • Hero MotoCorp: Appoints Micheal Clarke as Chief Operating Officer with the additional role of Chief Human Resource Officer.
  • Spandana Sphoorty: Approved and allotted 500 rated, listed, senior, secured, transferable, taxable, redeemable NCDs worth Rs 10 lakh each, aggregating to Rs 500 crore. The NCDs will have a coupon rate of 12.2% and will have a tenor of 24 months.
  • Tata Motors: TML Holdings, a wholly-owned subsidiary of the company has successfully priced a $300 million notes at 5.5%. The notes notes have received a rating of 'B' from S&P and will have a maturity date of June 3, 2024. The proceeds of the note will be used by TML Holdings to refinance the upcoming maturity of its unrated 5.75% $300 million senior unsecured notes due in May 2021.
  • ICICI Lombard: Gets in-principle approval to scheme of amalgamation with Bharti Axa for its general insurance business.
  • Healthcare Global: Enters into a share purchase agreement with Dr. Kamini Rao and her family members to acquire 49%stake in BACC Health Care, making it the wholly-owned subsidiary of the company.
  • Bata India: Announces the appointment of current CEO Sandeep Kataria as the company's global CEO - the first Indian to be elevated to this role.
  • VA Tech Wabag: Incorporates new subsidiary 'Kopri Bio Engineering Pvt. Ltd.' to carry out the business of manufacturing, processing, owning, operating and maintaining seqage treatment plant among other businesses.

Brokerage Radar

Nomura On Dabur

  • Initiate coverage with buy rating
  • Price target of Rs 610
  • High demand for immunity-building products here to stay
  • Undergoing a paradigm shift towards a higher sales growth trajectory
  • New growth vector emerging from aggressive launch pipeline
  • Pent-up demand from juices, discretionary portfolio to aid sales growth with progressive unlocking
  • Transforming to become more agile, aggressive and risk-taking
  • Risks: Slower-than-expected growth in new categories, loss of growth in core categories
  • Forecast EPS CAGR of 15.1% for FY21-23F

Emkay On Tech Mahindra

  • Assume coverage with buy rating
  • Price target of Rs 1,070
  • Has a coherent strategy in place to capitalise on 5G opportunities
  • Demand uptic timeline is still uncertain
  • It expects high single-digit revenue growth in FY22, driven by double-digit growth in Enterprise
  • Expect recovery in communications revenue growth in FY22
  • Current valuations adequately captures the uncertainties
  • Expect earnings CAGR of ~14% over FY21-23E

Prabhudas Lilladher On Muthoot Finance

  • Initiate coverage with buy rating
  • Price target of Rs 1,364
  • Expect to maintain market leadership in gold lending underpinned by pricing power, improved productivity and insulation from underlying collateral price fluctuations
  • A low risk, high return business is expected to clock healthy growth momentum
  • Pandemic and gold price momentum keep it in a sweet spot
  • Premium asset quality, high return profile to stay

Maybank On IndusInd Bank

  • Buy rating maintained
  • Price target raised to Rs 1,007 from Rs 623
  • Cautious loan growth with focus on retail
  • Strong liquidity and well capitalised for future growth
  • Cut FY21 earnings estimates by 37% but raise FY22 estimates by 4% to factor in lower provisions
  • Risks can step from higher slippages due to restructuring and lower than estimated recoveries
  • Remain buyers on attractive valuation and strong balance sheet

Nomura On Mahindra & Mahindra

  • Buy rating maintained
  • Price target of Rs 923
  • Company is hopeful of a good Q4FY21 led by strong demand for Thar
  • Expects stronger tractor industry growth in FY21
  • Sees farm implements as a strong growth opportunity due to low penetration and lack of formal players
  • Factor in tractor volume growth of 10%, 10% and 8% over FY21-23F
  • Addressing losses in subsidiaries and exiting loss-making investments can further drive re-rating
  • Top pick in the OEM space

Pledged Share Details

  • JSW Steel: Promoter JSW Techno Projects Management created a pledge of 1.06 crore shares on November 24.
  • Motherson Sumi: Promoter Samvardhana Motherson International revoked pledge of 2.45 crore shares on November 24.
  • Adani Ports & SEZ: Promoters Gautam Adani and Rajesh Adani created a pledge of 31.34 lakh shares on November 26.
  • JSW Energy: Promoters JSW Investments and Indusglobe Multiventures created a pledge of 1.55 crore shares on November 24.
  • Future Retail: Promoter Future Corporate Resources invoked a pledge of 2.94 crore shares on November 24.
  • Solara Active Pharma Sciences: Promoter Pronomz Ventures invoked a pledge of 3.57 lakh shares on November 24.

As Reported On November 27

Who's Meeting Whom

  • Mahindra Logistics: To meet Nuvest Capital and Bay Capital Partners on December 1.
  • Crompton Greaves Consumer Electricals: To meet ENAM Asset Management, Sands Capital Management and Goldman Sachs (India) between December 1-5.

Trading Tweaks

  • AGM: Jump Networks Limited, MAS Financial Services, 63 Moons Technologies, Sakuma Exports
  • Price Band Revised From 10% To 5%: Aban Offshore.
  • Move In To Short-term ASM Framework: OnMobile Global, Plastiblends India, Religare Enterprises, NDTV
  • Move Out Of Short-term ASM Framework: Kirloskar Ferrous Industries, Spandana Sphoorty Financial, Zuari Global.
  • Move In To ASM Framework: Advani Hotels & Resorts (India).
  • Move Out Of ASM Framework: JB Chemicals & Pharmaceuticals, Pricol, Mastek, Nagarjuna Fertilizers and Chemicals, Jet Airways, Reliance Communications

Insider Trades

  • Arvind: Promoters sold 4.26 lakh shares between November 26-27.
  • Ajmera Realty: Promoter ARIIL Trust acquired 6.33 lakh shares on November 26.
  • Filatex India: Promoter Vrinda Bhageria acquired 7 lakh shares on November 24.
  • Mangalore Chemicals & Fertilizers: Promoter Zuari Global bought 2 lakh shares between November 24-25.
  • Ashapura Minechem: Promoter Ashapura Industrial Finance acquired 50,000 shares on November 25.
  • Surya Roshni: Promoter Surya Roshni Employees Welfare Trust acquired 21,000 shares between November 23-24.
  • UPL: Promoter Uniphos Enterprises acquired 47,100 shares between November 24-25.
  • Action Construction Equipment: Promoter Vijay Agarwal acquired 38,500 shares between November 23-25.
  • Tata Steel Long Products: Promoter Tata Steel sold 82,000 shares on November 26.

As Reported On November 27

Money Market Update

  • The currency ended at 74.03 against the U.S. Dollar, as compared to Thursday's close of 73.88.
  • The rupee ended with modest gains for the week.
All You Need To Know Going Into Trade On December 1
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