All You Need To Know Going Into Trade On February 24
Most Asian equities have opened lower in mid-week trading as investors mulled comments from Fed Chair Jerome Powell on inflation and growth.
Japanese markets are trading lower on their return from a holiday as are those in Australia while South Korean markets trade with modest gains.
Treasury futures were volatile this morning after a Financial Times report on reduced vaccine effectiveness against the new coronavirus variants.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, rose 0.6% to 14,810 as of 7:15 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 30 points higher. The index ended flat overnight.
- Fed Chair Jerome Powell said that the FOMC was nowhere close to pulling back on its support from the economy as it will still take sometime for it to achieve the employment and inflation goals.
- Money market traders have pulled forward their rate hike expectations and now see the Fed raising interest rates by 25 basis points by the middle of 2023.
- “Investors need not doubt that what we are experiencing is a classic cyclical upswing: economic growth contracted last year, the cause of that contraction is now being resolved, and that allows growth (and earnings) to expand, supporting risk assets,” wrote Lauren Goodwin, portfolio strategist at New York Life Investments.
- Yield on the 10-year treasuries fell to 1.34% on Tuesday.
- West Texas Intermediate crude fell 0.6% to $61.30 per barrel after technical indicators suggested a pullback post a strong rally.
- Bitcoin fell over 12% on Tuesday, falling below the $50,000 mark. UBS has advised clients to be cautious while Ark Investments called this a 'healthy correction.'
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Stocks To Watch
- Tata Consumer Products: To replace GAIL (India) on the NIfty 50 index from March 31, 2021.
- Coal India: A meeting of Board of Directors is scheduled on March 5, 2021 to consider and approve payment of 2nd Interim Dividend for 2020-21, if any. The company has fixed March 16, 2021 as the record date for the payment of dividend, if declared by the board.
- NTPC: Has executed Share Purchase Agreements with GAIL (India) for purchase of GAIL's share of 25.51% in Ratnagiri Gas and Power and sale of NTPC's share of 14.82% (on fully dilutive basis) in Konkan LNG. After transfer of shares as per the Share Purchase Agreements, the company will exit from KLL and its shareholding in RGPPL will become 86.49%.
- United Spirits: Has initiated a strategic review of selected brands under its popular category. The review is aimed at continuing the company’s strategy toward long-term profitable growth through premiumising the portfolio. USL’s Popular portfolio comprises around 30 brands and the strategic review will focus on approximately half of this portfolio by volume. This review will not include the McDowell’s or Director’s Special trademarks. The company aims to complete the strategic review by the end of the 2021 calendar year.
- Sun Pharma Advanced Research Company: The Office of New Drugs of the U.S. Food and Drug Administration has denied the company’s appeal of the Complete Response Letter in relation to the New Drug Application for Taclantis™. In its Appeal Denied letter, the OND requested the conduct of a new Phase 3 study in metastatic breast cancer patients to support any potential resubmission of the Taclantis™ NDA.
- UPL: Two workers died and 26 were injured after a fire broke out at the company's Jhagadia Plant in Bharuch district in Gujarat. Other than that, five workers were missing. The company said the accident might have happened due to fire/explosion in the solvent but did not rule out foul play. The company said that the plant was shut from February 5 for its planned boiler inspection.
- Isgec Heavy Engineering: Has secured an order for a Steam Generating Island from a public sector refinery in India under competitive bidding. The two Gas Fired Boilers will supply steam to the whole petrochemical unit in this green field project.
- Mazagon Dock Shipbuilders: Has executed a Memorandum of Understanding with Mumbai Port Trust to further the economic growth of the region and the country under the Maritime India Summit 2021.
- Nava Bharat Ventures: A meeting of the Board of Directors is scheduled on February 26, 2021, to consider the proposal for buyback of equity shares of the company.
- REC: Has priced $500,000,000, 2.25% Notes due 2026, on February 22, 2021 under its $7 billion Global Medium Term Note programme. The Notes will mature on September 1, 2026 and all principal and interest payments will be made in U.S. dollars. The settlement date for the Notes is expected to be March 1, 2021.
Sanofi India Q4CY20 (Standalone, YoY)
- Revenue down 3% at Rs 720.3 crore Vs Rs 826.3 crore
- Net profit up 26% at Rs 123 crore Vs Rs 97.3 crore
- Ebitda down 6% at Rs 167 crore Vs Rs 178.2 crore
- Ebitda Margins at 23.2% Vs 21.6%
- Has approve recommendation for payment of a final dividend of Rs 125 per equity share of Rs 10 each and a special dividend of Rs 240 per equity share of Rs 10 each for the year ended December 31, 2020
Motilal Oswal On Britannia
- Upgrade to buy from neutral
- Price target raised to Rs 4,120 from Rs 3,830
- Structural opportunity is attractive
- Track record is the best among peers
- Exciting long-term opportunity with the widening of moats
- Valuations are attractive as compared to peers
- Recent underperformance leads to favourable risk-reward ratio
Investec On Bharti Airtel
- Initiate coverage with buy rating
- Price target of Rs 700
- Leader in an oligopolistic market
- ARPUs are now on an upward path
- Bharti is the only player that improved active subscriber share despite Jio
- High-quality network has also allowed Airtel to command premium pricing
- Expect 35% Ebitda CAGR over FY21-23E and RoCE to improve to 11% by FY23E
- Highly regulated nature of telecoms is a key risk
Morgan Stanley On Tata Motors
- Maintains equal weight rating
- Price target of Rs 297
- Shared aggressive financial targets driven by leverage gains, new model launches and cost optimisation measures
- More tailwinds than headwinds for CV business in FY22
- Focused on EVs but business moat is not clear
- Competition and electrification headwinds for JLR keep us equalweight
Pledge Share Details
- Adani Enterprises: Promoters Gautam Adani and Rajesh Adani revoked pledge of 50.48 lakh shares on February 22.
- Adani Ports & SEZ: Promoters Gautam Adani and Rajesh Adani revoked pledge of 1.51 crore shares on February 22.
- Adani Transmission: Promoters Gautam Adani and Rajesh Adani revoked pledge of 31.01 lakh shares on February 22.
As Reported On February 23.
Who's Meeting Whom
- UltraTech Cement: To meet Abu Dhabi Investment Authority on February 24.
- IEX: To meet Fred Alger on February 24.
- Sundram Fasteners: To meet JMP Capital Advisor on February 24.
- Wabco India: To meet Aditya Birla Sun Life Capital Mutual Fund and White Oak Capital Management LLC on February 24.
- Voltas: To meet CLSA India, Motilal Oswal and Edelweiss on February 24. To meet BofA Securities and Investec Capital on February 26. To meet Stewart Investors and Dolat Capital on March 2.
- Mahindra Holidays & Resorts India: To meet Banyan Capital Advisors on February 26.
- INOX Leisure: To meet Morgan Stanley Investment on February 25.
- Price Band Revised From 10% To 5%: Central Bank of India, OnMobile Global, Punjab & Sind Bank
- Price Band Revised From 20% To 10%: Hindustan Copper, SORIL Infra Resources
- Record Date Buyback: NIIT
- Record Date Rights Issue: Arvind Fashions
- Ex-Date Interim Dividend: Techno Electric & Engineering Company, Sandhar Technologies, Karda Constructions, Isgec Heavy Engineering
- Record Date Interim Dividend: United Drilling Tools, Ircon International, Cochin Shipyard, Zuari Global, SJVN, Precision Wires India, Oil India
- Move Into Short-term ASM Framework: Affle (India)
- Move Out Of Short-term ASM Framework: Tejas Networks, Greenply Industries
- Move Into ASM Framework: Tejas Networks
- CG Power and Industrial Solutions: Promoters Meyyammai AM and Murugappan Arunachalam Children Trust acquired 1.10 lakh shares on February 22.
- Gabriel India: Promoter Asia Investments acquired 31.36 lakh shares on February 22.
- Aarti Industries: Promoter Jaya Gogri sold 24,250 shares on February 22.
- Motilal Oswal Financial Services: Promoters Motilal Oswal Family Trust and Vaibhav Agrawal acquired 99,701 shares between February 19-23.
As Reported On February 23.
Money Market Update
- The currency ended at 72.44 against the U.S. Dollar, as compared to Monday's close of 72.49.
- Nifty February futures ended at 14,724; premium of 17 points
- Nifty February futures shed 17.7% and 21,114 shares in Open Interest
- Nifty Rollovers at 40.94%
- Nifty Bank February futures ended at 35,148; premium of 32 points
- Nifty Bank February futures shed 7.5% and 3,802 shares in Open Interest
- Nifty Bank Rollovers at 36.73%
- Nifty Put-Call Ratio at 0.77
- Enters F&O Ban: Punjab National Bank
- Out Of F&O Ban: Canara Bank, SAIL, Vodafone Idea
- Stocks In F&O Ban: BHEL, Punjab National Bank