All You Need To Know Going Into Trade On February 25
Asian equities have opened higher this morning on encouraging vaccine news and comments from Federal Reserve Chairman Jerome Powell.
Japanese and South Korean shares outerformed along with a gauge of Asian equities. Benchmark indices in Australia gained as well.
The 10-year yield surged back to its highest since March last year while oil prices remain close to a one-year peak. Copper prices were at the highest since 2011.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, rose 1.4% to 15,072 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 with gains of 80 points. The index ended 1.3% higher on Wednesday.
- Gains in the U.S. banking stocks sent an industry gauge to its highest level since 2007. Smallcap stocks rose after U.S. regulators said that Johnson & Johnson's Covid-19 vaccine is safe and effective.
- Fed Chair Jerome Powell reiterated that the U.S. economy is still a long way away from recovery and that signs of prices rising won't necessarily lead to persistently higher inflation. Fed Vice Chair Richard Charida said that he sees the central bank keeping its current pace of bond purchases in place for the rest of the year.
- Yield on the 10-year treasuries stood at 1.38%.
- West Texas Intermediate Crude rose 0.3% to $63.42 per barrel while Bitcoin was back above the mark of $50,000, trading with gains of nearly 4%.
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Stocks To Watch
- Maruti Suzuki: Suzuki Motor Corp. wants its India Unit to maintain market share of over 50% in the passenger car segment and take the initiative to promote electrification. Maruti Suzuki's promoter, in an investor presentation said that it not only aims to introduce electric vehicles in the country but also increase the number of rural small sales outlets. It also said that it aims to strengthen its SUV segment and promote CNG cars to boost its product line-up.
- Max Financial Services: Has received IRDAI approval for stake purchase by Axis Entities. Insurance Regulatory and Development Authority of India has given its formal approval for the acquisition of up to 12% stake in Max Life Insurance Company by Axis Bank and its subsidiaries, Axis Capital Limited & Axis Securities Limited (together Axis Entities).
- Cadila Healthcare: Cyprium Therapeutics, a Fortress Biotech partner company, and Sentynl Therapeutics, Inc., a wholly-owned subsidiary of the Zydus Group, have announced the execution of an asset purchase agreement to commit development funding for and acquire Cyprium’s proprietary rights to CUTX-101, its Copper Histidinate product candidate for the treatment of Menkes disease. Sentynl has acquired CUTX-101, Copper Histidinate, for $20 million in upfront and regulatory milestone payments through NDA approval, as well as potential sales milestones plus royalties. Cyprium will retain 100% ownership over any FDA priority review voucher that may be issued at NDA approval for CUTX-101.
- Dredging Corporation of India: Has signed an MoU with Cochin Shipyard to construct first ever Trailing Suction Hopper Dredger in India.
- HG Infra Engineering: Has been declared as L-1 bidder by NTPC for transportation of 26.41 lakh Cu.M. of Pond Ash from NTPC Ramagundam to NHAI-PIU-Mancherial road construction project.
- IRB Infrastructure Developers: The Thane Ghodbunder Toll Road Private Limited, a wholly-owned subsidiary of the company, has successfully completed concession period of Thane-Ghodbunder BOT Project on February 23, 2021 and handed over the project to the Maharashtra State Road Development Corporation Ltd. This Project SPV has contributed approximately 1% of consolidated total income of the company as on December 31, 2020.
- lndo Rama Synthetics (India): The Board of Directors have approved expansion plan of Rs 640 crore for the company and its wholly owned subsidiary, i.e., lndorama Yarns Private Limited, towards addition of balancing equipment for value addition and also depending on viability to diversify into either Pet Chips or Specialty Yarns.
- Indiabulls Real Estate: The Competition Commission of India has approved the Merger of NAM Estates and Embassy One with the company. Further, the company has also received other requisite regulatory approvals, from NSE, BSE, SEBI, and will proceed with filing of requisite application with NCLT for its approval to the Scheme of Merger. The combined listed entity will be owned 44.9% by Embassy Group, 26.2% by the existing public & institutional shareholders, 9.8% by existing IBREL Promoter Group and 19.1% by Blackstone group & other Embassy institutional investors.
- IndiGrid Investment Managers: Has approved the acquisition of NER II Transmission Ltd. subject to unitholders and other regulatory approvals. An Extra-ordinary General Meeting of unitholders of IndiGrid will be held on March 19, 2021 to approve the proposed acquisition of power transmission assets and matters related thereto.
- Just Dial: Has launched its B2B portal, Jd Mart, across various platforms for users.
- MEP Infrastructure Developers: Has received the Letter of Award from National Highways Authority of India informing that the company has been engaged as the contractor for the collection of user fee through e-tender for Sergarh Fee Plaza in the state of Odisha for a period of 1 year.
- PNB Gilts: Has appointed Chandra Prakash, Chief Manager - Punjab National Bank, as Chief Financial Officer of the company from February 26, 2021.
- Piramal Enterprises: Piramal Pharma, a subsidiary of the company, has completed the acquisition of Convergence Chemicals for an aggregate cash consideration of Rs 65.10 crore.
Jefferies On Max Financial Services
- Upgrade to buy from hold
- Price target raised to Rs 1,000 from Rs 830
- IRDAI approval of Axis deal enhances visibility of distribution partnership
- Merger between Max Financial and Max Life can lead to direct listing of life insurance business
- Partnership with Axis Bank is key given that this channel drives almost 60% of new premiums and brings scale benefits
- Expect margin to normalise to 26% for FY22-23
- Slightly raise VNB estimates and see 15% CAGR in APE and 24% CAGR in VNB over FY20-23
Jefferies On Indian Energy Sector
- Rallying crude prices has narrowed auto fuel marketing margins
- Possible excise duty cuts and BPCL's impending privatisation can limit further downside
- Indian oil is the most impacted from higher working capital debt and interest expenses
- Industry under-recoveries will remain benign on sharp hike in LPG prices since December
- Further rally in crude can weigh on FY22E earnings outlook
- Expect refining margins to recovery mid-CY21 and support earnings
- Prefer BPCL as we see room for 30-35% increase in annual Ebitda on cost rationalisation under private ownership
- Like HPCL on fastest auto fuel volume growth among peers and benign valuations
HSBC On MNC Industrials
- December quarter showed sharp sequential improvement with Siemens India posting better recovery than ABB India
- Recovery and government incentives still needed for capex
- Stocks already pricing in better than historical performances
- Raise earnings estimates for near-term as well as the medium-term
- Optimistically assume Ebitda growth of 16-17% over the next 15 years
- Retain hold rating on ABB India; price target raised to Rs 1,325 from Rs 1,025
- Retain hold rating on Siemens India; price target raised to Rs 1,570 from Rs 1,280
Dolat Capital On IRCTC
- Initiate coverage with Buy rating
- Price target of Rs 2,650 implies potential upside of 58%
- Offers highly scalable and unmatched opportunity to exclusively participate in the Indian Railway growth story
- Has a monopoly business that should last
- Low risk business model. The only risky business is that of being a train operator that functions on occupancy risk
- Expect revenue / earnings CAGR of 16% and 23% respectively over FY20-25E
Pledge Share Details
- Adani Ports & SEZ: Promoters Gautam Adani & Rajesh Adani revoked pledge of 74.39 lakh shares on February 23.
- Adani Transmission: Promoters Gautam Adani & Rajesh Adani revoke pledge of 48.50 lakh shares on February 23.
- Asahi India Glass: Promoter Sanjay Labroo revoked pledge of 3.51 lakh shares on February 19.
As Reported On February 24.
- Affle (India): Laudus International Marketmasters Fund bought 3.06 lakh shares (1.20%) at Rs 5,267 per share. Affle Holdings Pte sold 3.06 lakh shares (1.20%) at Rs 5,267 per share.
- Esab India: SBI Mutual Fund bought 2.50 lakh shares (1.62%) at Rs 1,865 per share. Acacia Banyan Partners sold 2.34 lakh shares (1.53%) at Rs 1,865 per share.
- Himadri Speciality Chemical: BC India Investments sold 50 lakh shares (1.19%) at Rs 40.07 per share.
Who's Meeting Whom
- Gati: To meet Elara Securities (India), PhillipCapital (India) and Ambit Capital on February 25.
- Wabco India: To meet Goldman Sachs Asset Management, UTI Mutual Fund and SBI Mutual Fund on February 25.
- PSP Projects: To meet Eternity Capital LLP on February 25.
- Ex-Date Buy Back: Gujarat Apollo Industries
- Ex-Date Bonus Issue: Nakoda Group of Industries
- Ex-Date Interim Dividend: Amara Raja Batteries, Dharamsi Morarji Chemical Co, GM Polyplast, Career Point, The Yamuna Syndicate
- Record Date Interim Dividend: Isgec Heavy Engineering, Techno Electric & Engineering Company, Sandhar Technologies, Karda Constructions, RACL Geartech, Nile
- Move Into ASM Framework: Tube Investments Of India, Panama Petrochem, Poly Medicure, HBL Power Systems
- Move Into Short-term ASM Framework: DCW, OnMobile Global, HT Media
- Move Out Of Short-term ASM Framework: Goldiam International, Shakti Pumps (India)
- SpiceJet: Promoter Kalpana Singh sold 1 lakh shares on February 18.
- Prakash Industries: Promoter Ved Prakash Agarwal acquired 20,000 shares on February 23.
- Aarti Industries: Promoter Jaya Gogri sold 20,000 shares on February 23.
- Bhageria Industries: Promoter Rahul Bhageria acquired 27,261 shares between February 22-23.
- Man Infra: Promoter Parag Shah acquired 55,428 shares on February 23.
- Vardhman Special Steels: Promoter Sachit Jain acquired 4,940 shares on February 22.
- Adani Green Energy: Promoter Harmonia Trade and Investment acquired 20 lakh shares on February 23.
Money Market Update
- The currency ended at 72.33 against the U.S. Dollar as compared to Tuesday's close of 72.44.
- Nifty February futures ended at 14,996; premium of 14 points
- Nifty February futures shed 21.6% and 21,299 shares in Open Interest
- Nifty Rollovers at 54.09%
- Nifty Bank February futures ended at 36,537; premium of 85 points
- Nifty Bank February futures shed 17.5% and 8,265 shares in Open Interest
- Nifty Bank Rollovers at 51.49%
- Nifty Put-Call Ratio at 1.12