All You Need To Know Going Into Trade On December 23
Asian markets have opened modestly higher in mid-week trade, even as U.S. stock futures reversed gains.
Outgoing U.S. President Donald Trump signalled he may not sign the $900 billion bipartisan relief package just a day after Congress passed it. Investors also continued to assess the vaccine rollout and concern around a new virus variant that is leading to more severe lockdowns.
Benchmark indices in Japan, Australia and South Korea trade with modest gains.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, fell 0.5% to 13,415 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 trading lower by 150 points. The index fell 0.7% on Tuesday.
- Rising virus cases across the world are threatening to overshadow U.S. pandemic relief and the initial delivery of vaccines.
- U.S. President-elect Joe Biden warned that the darkest days of the pandemic are yet to come and asked the Congress to be prepared for another round of stimulus next year.
- The EIA crude oil report, U.S. jobless claims data is due today.
- Yield on the 10-year treasuries stood at 0.91%.
- West Texas Intermediate crude fell another 0.6% to $46.73 per barrel.
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Stocks To Watch
- Wipro: The company has announced a significant, strategic, digital and I.T. partnership deal with METRO AG. As part of this transaction, Wipro will take over the I.T. units of METRO AG — METRO-NOM GMBH in Germany and METRO Systems Romania S.R.L. The estimated deal value for the duration of the first 5 years is approximately $700 million. With the intention to extend up to 4 additional years, it can be a potential spend of up to $1 billion.
- Infosys: Daimler and Infosys have announced a long-term strategic partnership for a technology-driven I.T. infrastructure transformation. After the receipt of all regulatory approvals, Daimler AG will transform its I.T. operating model and infrastructure landscape across workplace services, service desk, data center, networks and SAP Basis together with Infosys. The collaboration will empower Daimler to strengthen its IT capabilities, and Infosys, its automotive expertise.
- Bajaj Auto: To spend Rs 650 crore to set up a new manufacturing facility at Chakan, Maharashtra. The company has signed a Memorandum of Understanding with the state government for the same. The factory to be utilized for manufacturing high-end KTM, Husqvarna and Triumph motorcycles as well as for electric vehicles starting with the Chetak scooter. The facility is expected to commence production in 2023.
- Jubilant Foodworks: Introduced plant-protein Pizza called ‘The Unthinkable Pizza.’ To be available at all Domino's restaurants across Delhi NCR, Mumbai and Bengaluru. The company had forayed into the Biryani space last week with the launch of Ekdum! brand.
- Zensar Technologies: Has been selected by NFU Mutual, the UK’s leading rural insurer, to form a new strategic technology and digital relationship to support multiple technologies that underpin a number of the company’s key business systems.
- Fine Organic Industries: The Maharashtra Pollution Control Board has directed the company to stop operations at factory premises situated at Plot No. N-2, MIDC Additional, Ambernath, Thane for alleged violation of the provisions of Water (Prevention and Control of Pollution) Act, 1974, Air (Prevention and Control Pollution), Act, 1981 and the Rules made thereunder. The company says it is taking steps to respond to the notice.
- Dishman Carbogen Amcis: Promoter Adimans Technologies LLP sold 19.74 lakh shares to non-retail investors on December 18, 2020 and sold 18,674 shares to retail investors on December 21, 2020, through the Offer for Sale. In aggregate, this amounts to 1.27% of the equity share capital of the company. The company had planned to sell close to 69 lakh shares i.e. 4.4% of the total paid-up equity share capital, through the OFS.
- Aster DM Healthcare: The subsidiary of the company, Aster Caribbean Holdings, has entered into an agreement with the Cayman Islands Government to further a healthcare project in the Cayman Islands to be known as the Aster Cayman Medcity for the provision of healthcare services. The agreement will see Aster initially develop a 150-bed comprehensive, tertiary and quaternary hospital, alongside an assisted living facility and healthcare university in the long-term.
- IFB Agro Industries: The company has alleged that its alcohol business is under threat, as it has been singled out by certain excise officials for not succumbing to their illegal demands and have requested the Chief Minister of West Bengal and also Finance, Commerce and Industry Minister of the state to look into the matter.
- Forbes & Company: The Board of Directors has approved entering into Memorandum of Understanding with GPX India and Equinix India for sale of approximately 3.804 acres of land at Chandivali for a consideration of Rs 200 crore. The MoU is terminable at the option of GPX. The Agreement for Sale is expected to be executed by January 31 , 2021 and the completion of the Proposed Transaction is expected to be completed in March 2021.
- Larsen & Toubro Infotech: Syncordis S.A., Luxembourg and Nielsen + Partner S.A. Luxembourg (N+P), step-down subsidiaries of the company have approved merger between N+P and Syncordis. Consequently, N+P has ceased to be a step-down subsidiary of the company from December 21.
- SBI Cards: The Stakeholder Relationship Committee of the company has approved the allotment of 4,500 unsecured NCDs of the face value of Rs 10 lakh each, at par, under Series 22 aggregating to Rs 450 crore on private placement basis. The coupon/interest rate has been fixed at 6% per annum.
- Punjab National Bank: Government's shareholding now stands at 76.87% from 85.59% earlier, post the QIP.
- Dabur India: Dissolution of Dabur Tunisie is likely to be completed by December 31, 2021 (instead of December 31, 2020 as informed earlier) as the Reserve Bank and Courts are working in limited capacity in Tunisia due to the ongoing pandemic.
- Mahindra & Mahindra: SsangYong Motor Company, a material subsidiary of the company, has intimated the Korean Stock Exchange that it could not repay the loan amount of 40 billion KRW (approximately Rs 268 crore) to JP Morgan on account of SYMC's application for rehabilitation.
- Jagran Prakashan: The company has subscribed 25 lakh shares in its immaterial wholly-owned subsidiary, Mid-day Infomedia Limited, of Rs 10 each at a premium of Rs 10 per share, for cash on rights basis. The investment is made to provide long-term funding to Mid-day Infomedia.
- LT Foods: CRISIL has revised its outlook on the long-term bank facilities of the company to 'Positive' from 'Stable' while reaffirming the rating at 'A-'. The short-term rating has been reaffirmed at 'A2+'.
- JSW Steel: Periama Holdings, an indirect wholly-owned subsidiary of JSW Steel, has allotted additional fixed rate senior unsecured notes of $250 million. The additional notes are fungible, consolidated and form a single series with the fixed rate senior unsecured notes of $500 million issued by the Issuer in October 2020.
Emkay On Consumer Durables
- Expect cables and wires industry to register 10% CAGR in FY20-25E
- Industry volumes should see 9% CAGR over FY20-25E
- Revival in government spends, private capex by key sectors along with pick-up in real estate should boost cables & wires growth
- Initiate coverage on Polycab India with buy rating and price target of Rs 1,310
- Initiate coverage on KEI Industries with buy rating and price target of Rs 554
- Both Polycab and KEI are on the cusp of growth and with strong execution capabilities, will further market share gains
- Polycab's focus on diversification in the FMEG space is a step in the right direction
- Risks: Weak government spending, adverse commodity and currency, high competitive intensity and market share loss along with capital misallocation
Motilal Oswal On Westlife Development
- Initiate coverage with neutral rating
- Price target of Rs 440
- Large opportunity in Food Services Industry with QSRs established right-to-win
- McDonald's well placed to capture the QSR opportunity
- Ticks all boxes as an attractive investment from a potential topline and earnings growth perspective
- ~20% Ebitda CAGR forecast over FY20-25E makes a compelling case for investment over next three years
- Three-year price target of Rs 810, assuming no multiple expansion
- Risks: Delay in dine-in recovery, aggregators, Delays in economic recovery, health concerns and execution risks
Pledge Share Details
- Max Financial Services: Promoter Max Ventures Investment Holdings revoked pledge of 1 lakh shares on December 19.
- Mangalore Chemicals & Fertilizers: Promoter Zuari Agro Chemicals revoked pledge of 5.81 lakh shares on December 18.
As Reported On December 22.
Who’s Meeting Whom
- Tata Steel: To meet Kotak Securities on December 23.
- Finolex Industries: To meet Dhanki Securities on December 23.
- INOX Leisure: To meet Bellwether Capital on December 23.
- Majesco: Atul Limited bought 2.14 lakh shares (0.72%) at Rs 981.58 per share.
- Snowman Logistics: Adani Logistics sold 9.15 lakh shares (0.55%) at Rs 51.04 per share.
- Ex-Date Interim Dividend: Majesco
- Ex-Date Dividend: Rajesh Exports
- Move Out Of Short-term ASM Framework: Adani Power, The Anup Engineering, 3I Infotech, Everest Kanto Cylinder
- Move Into Short-term ASM Framework: Indo Rama Synthetics (India)
- Godrej Industries: Promoter Anamudi Real Estates acquired 78,530 shares on December 16.
- Filatex India: Promoters Yaduraj Bhageria and Stuti Bhageria acquired 5.30 lakh shares on December 21.
- Ashoka Buildcon: Promoter Ashish Ashok Katariya acquired 7,000 shares between December 7-10.
- Chalet Hotels: Promoter Palm Shelter Estate Development acquired 1 lakh shares on December 21.
- Thyrocare Technologies: Promoters A Velumani and Thyrocare Properties and Infrastructure acquired 10,370 shares on December 21.
- NRB Bearings: Promoters Aziz Yousuf Zaveri and Harshbeena Zaveri acquired 47,299 shares between December 17-21.
As Reported On December 22.
Money Market Update
- The rupee ended little changed at 73.84 against the U.S. Dollar on Tuesday as compared to Monday's close of 73.80.
- Nifty December futures end at 13,489; premium of 23 points
- Nifty December futures shed 3% and 3.4 lakh shares in Open Interest
- Nifty Bank December futures end at 29,665; premium of 40 points
- Nifty Bank December futures shed 16.3% and 2.9 lakh shares in Open Interest
- Nifty Put-Call Ratio at 1.56
- 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 (43.4 lakh shares)
- Maximum Open Interest on Put side at 13,000 strike (31 lakh shares)
- Active Options: 14,500 Call (-13.9 lakh shares) and 13,300 Put (+9.6 lakh shares)
Nifty: December 31 Expiry
- Maximum Open Interest on Call side at 14,000 strike (24.9 lakh shares)
- Maximum Open Interest on Put side at 13,000 strike (44.9 lakh shares)