All You Need To Know Going Into Trade On December 21
Asian markets are edging lower at the start of the new trading week. Worsening signs of Covid-19 and a lack of progress on Brexit trade talks have sapped risk appetite.
Benchmark indices in Japan and Australia are drifting lower in early trade. This, despite Congressional leaders in the U.S. reaching a deal on roughly $900 billion of outlays to support the U.S. economy.
The pound remains under pressure as the government warned that the new coronavirus strain was out of control while 'significant differences' remained in trade talks.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, fell 0.4% to 13,728 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 30 points. The index fell 0.4% on Friday.
- The Australian Dollar has declined amid new restrictions in Sydney due to a growing virus cluster.
- More than 16 million citizens are now required to stay home as a full lockdown came into force in London and Southeast of England.
- China has threatened to impose countermeasures after the U.S. blacklisted more than 60 Chinese companies.
- Yield on the 10-year treasuries stood at 0.93%.
- West Texas Intermediate crude fell 1.5% to $48.36 per barrel.
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Stocks To Watch
- Reliance Industries: Announced the start of production from the R Cluster - an ultra-deep-water gas field in the KG D6 block with British Petroleum. R Cluster is the first of the three projects to come on stream. Next project - Satellites Cluster, is expected to come on stream in 2021, followed by the MJ project in 2022. Expects peak gas production from three fields to be about 25% of India's domestic production by 2023. R Cluster expected to reach plateau gas production of about 12.9 million standard cubic meters per day (mmscmd) in 2021 and peak gas production from the three fields expected to be around 30 mmscmd by 2023.
- Infosys: Has divested 1/3rd of its holding in Whoop Inc, the human performance company headquartered in Boston, USA for $10 million. The company had made a minority investment in Whoop Inc. worth $3 million in December 2015.
- Info Edge (India): Zomato has closed primary fundraise of $253.4 million from four different investors - $50.7 million from Kora Management LP, $101.3 million from Tiger Global Management, $50.7 million from D1 Capital and $50.7 million from funds or accounts advised or sub-advised by Fidelity Management & Research Company and/or its affiliates. The transactions valued Zomato at a post-money valuation of $3.9 billion. On a fully converted and diluted basis, Info edge’s effective stake in Zomato stands at 19.3%.
- KPR Mills: To set up new sugar mill with the sugar capacity of 10,000 TCD, Power capacity of 47.50 M.W and Ethanol capacity of 230 KLPD. In the new unit the company is going for higher ethanol capacity to increase revenue and profitability for which they have proposed to convert 30% of sugarcane crushed into ethanol. The project is estimated to cost around Rs 500 crore funded by the combination of equity and debt and is expected to be completed within a period of 10 to 12 months.
- Canara Bank: Has clarified on the news item circulating over the alleged fraud of over Rs 7,900 crore by a company named Transstroy India. The lender says that its share in the amount lent by a consortium of 14 banks stands at 678 crore rupees and complete provisions have been made on the same as per RBI guidelines. The lender also said that it had declared the company as a willful defaulter in December 2018 and that the said company is under the process of liquidation.
- Lupin: Received approval from the U.S. FDA for Colesevelam Hydrochloride tablets which is a cholesterol-related drug. As of the 12-months ending September 2020, the drug had a market size of $159 million in the United States.
- PVR: The board has approved raising a sum not exceeding Rs 800 crore through various methods.
- IDBI Bank: Has managed to raise Rs 1,435 crore through its QIP, which was subscribed by 44 Qualified Institutional Buyers. The lender had planned a base issue of Rs 1,000 crore and a greenshoe option of the same amount. The issue price of the QIP has been fixed at Rs 38.6 per share which is a 5% discount to the QIP floor price.
- Punjab National Bank: Raises over Rs 3,788 crore through its QIP issue. Approves the issue of over 106 crore shares at an issue price of Rs 35.5 per share. The issue price is at a 5% discount to the floor price of the QIP.
- India Grid Trust: Signs securities purchase agreement to acquire 100% stake in FRV Andhra Pradesh Solar Farm-I and FRV India Solar Park II from FRV Solar Holdings. The transaction will be done for a cash consideration of 660 crore rupees and will be subject to receipt of relevant approvals and completion of contractual obligations.
- IIFL Finance: The board of directors has approved the investment in the Right Issue of equity shares of Samasta Microfinance, a subsidiary of the company at Rs 15.91 per share for an amount up to Rs 67.50 crore. It has also Entered into a sourcing and servicing arrangement to partner in extending credit to affordable housing loans and MSME loan. Under the partnership, the company will originate and service the customers through the entire loan life-cycle while ICICI Bank will in-turn provide funding to such customers.
- Emami: Emami International FZE, the wholly owned subsidiary company of Emami has disposed its entire stake of 85% held in Fravin, Australia, consequently, Fravin and its step down subsidiary companies, namely Diamond Bio Tech Laboratories and Abache have ceased to be subsidiary companies of Emami.
- AIA Engineering: The Canada Border Services Agency has initiated investigations with respect to the alleged dumping and subsidizing of certain grinding media from India. The investigation is initiated on a complaint filed by Magotteaux, located in Magog, Quebec. The company, through its overseas subsidiary, Vega Industries, has sold approximately 25,000 MT of high chrome grinding media in last reported 12 months to its customers in Canada.
- Oberoi Realty: Evenstar Hotels, a wholly owned subsidiary of the company, has purchased and taken possession of a hotel property situated at Dr. Annie Besant Road, Worli, Mumbai, for a consideration of Rs 1,040 crore. The hotel property is a 221 key ‘5 Star’ hotel and will be operated and managed under the Ritz-Carlton brand.
- Reliance Home Finance: Defaults on payment of term loan. The current interest/accrued interest default amount is Rs 30.34 crore. The total amount of outstanding borrowings from Banks/financial institutions is Rs 4,159.73 crore.
- Jubilant Industries: India Ratings & Research has upgraded Jubilant Agri and Consumer Products' Long-term Issuer Rating and the rating of long-term loans worth Rs 98.75 crore to BBB+/Stable from BBB/Positive. The rating agency also upgraded the rating of fund-based working capital limits worth Rs 65 crore and non fund-based working capital limits worth Rs 150 crore to BBB+/Stable/IND A2+ from BBB/Positive/IND A3+.
- RPG Life Sciences: ICRA has upgraded the rating of long-term loans of Rs 35 crore and of long-term, fund-based facilities of Rs 40 crore to A/Stable from A-/Stable. The rating agency also upgraded the rating of short-term, non-fund based facilities of Rs 25.92 crore to A1 from A2+.
Morgan Stanley On Reliance Industries
- Overweight rating maintained
- Price target of Rs 2,247
- Start of gas production from the KG basin is positive and has major implications for India's energy transition
- New production should contribute ~3% of earnings and cash flow by 2023
- Expect gas production of 20 mmscmd in FY22 and 25 mmscmd in FY23 from the KG D6 block
- Expect domestic E&P profits to rise steadily
Kotak Institutional Equities On Construction Materials
- Channel checks with dealers suggest cement prices fell 2% month-on-month in December
- Price in North and Central india fell 2% month-on-month
- Price correction continues in the East where they are down 3% month-on-month
- Demand remained robust in October-November but has moderated in December
- Cost headwinds should hit from end of Q3FY21 but price strength should partly offset the impact on margins
- Margins should moderate after record earnings in Q2 due to higher fixed costs but are factored in estimates
- Do not build in any price hikes in Q4 and see limited downside risks to our near-term earnings estimates
- Prefer UltraTech and Dalmia Bharat from a one-year perspective
- Shree Cement is the top SELL recommendation in the sector
Emkay On Colgate-Palmolive (India)
- Buy rating maintained
- Price target raised to Rs 1,700 from Rs 1,600
- Highlighted increasing success in the naturals segment,led by Vedshakti
- GTM initiatives driving share gains in emerging channels
- Innovation pace has improved with a steady core portfolio
- Raise FY21-23E EPS estimates by 3-6%
- See EPS CAGR of 13% over FY20-23 on better growth and margin outlook
Edelweiss On Route Mobile
- Initiate coverage with hold rating
- Price target of Rs 1,280
- A2P business has strong moat; consolidation to drive market share gains
- Estimate 30% revenue CAGR and 44% earnings CAGR over FY20-23
- Cloud-based infrastructure to minimise capital requirements
- At current valuations, market is already factoring in higher growth rates
- Technological obsolescence and inefficient capital allocation are key risks
Pledge Share Details
- Adani Ports And Special Economic Zone: Promoters Gautam Adani and Rajesh Adani revoked pledge of 1.01 crore shares on December 17.
- Adani Enterprises: Promoters Gautam Adani and Rajesh Adani revoked pledge of 36.70 lakh shares on December 17.
As Reported On December 18.
Who’s Meeting Whom
- Pidilite Industries: To meet JP Morgan India on December 23.
- Affle (India)
Promoter Affle Holdings PTE sold 11.66 lakh shares (4.57%) at Rs 3,756.44 per share
Nomura India Investment Fund Mother Fund bought 3.92 lakh shares (1.54%) at Rs 3,755 per share
The Nomura Trust And Banking Co. bought 2.51 lakh shares (0.99%) at Rs 3,755 per share
Employees Provident Fund Board Managed by Nomura Asset Management Malaysia SDN BHD bought 1.34 lakh shares (0.53%) at Rs 3,755 per share.
- APL Apollo Tubes: Promoter APL Infrastructure sold 11.25 lakh shares (4.51%) at Rs 770 per share. Rohan Gupta bought 11.25 lakh shares (4.51%) at Rs 770 per share.
- Aptech: Param Capital bought 3.04 lakh shares (0.75%) at Rs 146.56 per share.
- Lemon Tree Hotels
Ivy Icon Solutions LLP bought 1.61 crore shares (2.04%) at Rs 41.24 per share. Pacific Horizon Investment Trust bought 78.46 lakh shares (0.99%) at Rs 41.25 per share
WF Asian Reconnaissance Fund bought 48 lakh shares (0.61%) at Rs 41.25 per share
Promoter Spank Management Services sold 1.35 crore shares (1.70%) at Rs 41.26 per share
Promoter Patanjali Govind Keswani sold 90 lakh shares (1.14%) at Rs 41.43 per share and 1.85 crore shares (2.34%) at Rs 41.28 per share.
Rajasthan Global Securities bought 5.42 lakh shares (1.82%) at Rs 965.28 per share and 2.44 lakh shares (0.82%) at Rs 966.78 per share
Balaji Agencies bought 6.20 lakh shares (2.07%) at Rs 967.36 per share
Third Alpha bought 3 lakh shares (1%) at Rs 961.10 per share
CJ Shah & Co bought 5.15 lakh shares (1.72%) at Rs 967 per share
Lucky Holdings bought 2.63 lakh shares (0.88%) at Rs 972.36 per share
Promoter Girija Sudhakar Ram sold 3 lakh shares (1%) at Rs 966.4 per share and 3 lakh shares (1%) at Rs 961.10 per share
Promoter Ketan Mehta sold 3 lakh shares (1%) at Rs 967 per share and 6.50 lakh shares (2.18%) at Rs 967.14 per share
Promoter Sundar Radhakrishnan sold 2 lakh shares (0.67%) at Rs 965.11 per share Promoter Ashank Datta Desai sold 4.24 lakh shares (1.42%) at Rs 966.81 per share and 8.69 lakh shares (2.91%) at Rs 965.77 per share.
- JK Tyre Industries: Edgefields Securities sold 16.02 lakh shares (0.65%) at Rs 73.14 per share.
- TD Power Systems: Rajasthan Global Securities bought 2.02 lakh shares (0.65%) at Rs 125 per share.
- Mindspace Business Parks REIT: The Vanguard Group Inc bought 51.19 lakh units at Rs 321.88 per share.
- Snowman Logistics: Promoter Adani Logistics sold 15.14 lakh shares (0.91%) at Rs 56.54 per share.
- AU Small Finance Bank: Westbridge AIF I bought 59.50 lakh shares (1.94%) at Rs 911.37 per share. Redwood Investment sold 1.37 crore shares (4.47%) at Rs 910.55 per share.
- AGM: Atcom Technologies, Hemisphere Properties India, Orchid Pharma, Kridhan Infra, Ortin Laboratories, DP Wires, Nagarjuna Fertilizers and Chemicals, Lypsa Gems & Jewellery, Visagar Polytex, Sathavahana Ispat, Tilaknagar Industries, JBF Industries, Premier, Housing Development and Infrastructure Limited, DCW, Tokyo Plast International, PAE, Sical Logistics, Madras Fertilizers.
- Ex Date Final Dividend: Nikhil Adhesives
- Move In To ASM Framework: Responsive Industries, Adani Gas, MSP Steel & Power, Tanla Platforms, CG Power and Industrial Solutions, Yaarii Digital Integrated Services.
- Move Out Of ASM Framework: Majesco, Eveready Industries India, IndiaMART InterMESH, Solara Active Pharma Sciences, Granules India, Nucleus Software Exports, Persistent Systems, Hathway Cable & Datacom, Jet Airways, BGR Energy Systems, Reliance Home Finance, Reliance Capital.
- Move In To Short-term ASM Framework: Vakrangee
- Move Out Of Short-term ASM Framework: Indo Rama Synthetics (India), South Indian Bank, Mukand, Dish TV India, Ebixcash World Money India, Sree Rayalaseema Hi-Strength Hypo.
- Mastek: Promoter Padma Desai acquired 81,600 shares on December 14.
- Arvind SmartSpaces: Promoter Arvind Farms acquired 7,000 shares on December 16.
As Reported On December 18.
Money Market Update
- The currency ended at 73.56 against the U.S. Dollar on Friday as compared to Thursday's close of 73.59.
- The rupee ended with modest gains for the week.
- Nifty December futures end at 13,762; premium of 2 points
- Nifty December futures add 0.5% and 65,550 shares in Open Interest
- Nifty Bank December futures end at 30,686; discount of 28 points
- Nifty Bank December futures shed 5.7% and 93,275 shares in Open Interest
- Nifty Put-Call Ratio at 1.86
- Enters F&O Ban: SAIL
- Stocks In F&O Ban: Canara Bank, PNB, SAIL, Sun TV
Nifty: December 24 Expiry
- Maximum Open Interest on Call side at 14,000 strike (33.6 lakh shares)
- Maximum Open Interest on Put side at 13,700 strike (23.7 lakh shares)
- Active Options: 13,900 Call (+10 lakh shares) and 13,700 Put (+8.5 lakh shares)
Nifty: December 31 Expiry
- Maximum Open Interest on Call side at 13,000 strike (21.6 lakh shares)
- Maximum Open Interest on Put side at 13,000 strike (42.8 lakh shares)