All You Need To Know Going Into Trade On Jan. 16
The rally that drove Asian equities to a six-week high showed signs of stalling Wednesday, while the pound steadied after U.K. politicians voted down a Brexit deal.
Shares in Australia and South Korea were little changed and Japanese equities retreated from their almost 9 percent advance since Christmas. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.2 percent to 10,919 as of 7:15 a.m.
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Here’s a quick look at all that could influence equities today.
U.S. Market Check
- U.S. equities rallied fuelled by technology shares after China ratcheted up stimulus to combat slowing growth.
- The yield on 10-year Treasuries remained at 2.71 percent.
Europe Market Check
- European stocks advanced, just hours before the U.K. parliament votes on Prime Minister Theresa May’s Brexit proposal, which widely failed later the day.
- Japan’s Topix index slid 0.4 percent.
- Hang Seng futures slid 0.1 percent.
- Australia’s S&P/ASX 200 Index was little changed.
- Futures on the S&P 500 added 0.1 percent.
- The MSCI Emerging Market Index gained 1.3 percent.
- West Texas Intermediate crude dipped 0.6 percent to $51.81 a barrel after climbing 3.2 percent.
- Brent crude halted a two-day decline, ended 2.8 percent higher at $60.64 per barrel.
- Gold was flat at $1,290.05 an ounce.
- The Bloomberg Commodity Index rose 0.3 percent Tuesday.
Also read: An Ex-Wall Streeter’s Big Bet on Sake
London Metal Exchange
- Aluminium ended 0.93 percent higher.
- Lead declined for the second day, down 0.76 percent.
- Copper ended 0.39 percent higher.
- Tin ended higher for the sixth day, its longest winning streak since July 31.
- Zinc ended lower for the second day, down 1.13 percent.
- Nickel ended 2.46 percent higher.
Key Events/Data To Watch This Week
- A confidence motion vote will take place at 7 p.m. in London as the opposition Labour Party tries to force a general election.
Stocks To Watch
- Dr. Reddy’s Laboratories received four Form 483 observations from U.S. FDA inspection on formulations plant in Andhra Pradesh.
- Bharat Petroleum clarified on the news item that the company will raise $500 million from overseas bond sale that quantum and rate of the unsecured notes is not final yet and the issuance of these instruments is subject to the market conditions. The company will be holding investor meetings in Singapore, Hong Kong and London from Jan. 14 for this issue.
- ICICI Lombard General Insurance clarified that various employee emails are being circulated in the media and being presented with malafide intentions. The company says it will examine allegations to ascertain employee expenditures from 2014 and before to check for any discrepancies if any.
- KPIT Technologies board approved allotting 7.7 crore equity shares to National Engineering Industries and Central India Industries in 9:22 ratio. On Nov. 29 NCLT had approved merger of KPIT Engineering, KPIT Technologies into Birlasoft. The record date has been fixed as Jan. 25 for the amalgamation scheme which is effective from yesterday.
- Indo Rama Synthetics’ board approved allotment of 8.3 crore equity shares worth Rs 299 crore to promoter group Indorama Ventures and 1.72 crore equity shares to Siam Stock Holdings which is valued at Rs 62 crore. The company said that the fund will be used for long term working capital and future growth requirements.
- Century Plyboards incorporated an arm in South Africa with the objective of manufacturing and trading in timber and other wood-based products.
- Punjab & Sind Bank revised its MCLR across various tenors. One month MCLR at 8.35 percent and one-year MCLR at 8.85 percent.
- SKF India buyback period from Jan. 23- Feb. 5
- Orient Electric launched new ceiling fan in the premium range.
- Fortis Healthcare draws loan from Citi Bank worth Rs 1,100 crore for financing the contractual commitments and strategic objectives of the company.
- DHFL: Rakesh Jhunjhunwala reduces his stake in the company by 0.73 percent to 2.46 percent, as reported in the exchanges. He sold 22.7 lakh shares aggregating to Rs 51 crore as per current market price from the last quarter ending September 2018.
- Adani Transmission to raise upto Rs 3000 crore via QIP (Financial Express).
- Indoco Remedies in initial discusstion to sell part of local business (Oxipod) for Rs 600 crore to investors such as Zydus Cadila, Lupin and PE funds like TPG Capital and Temasek Holdings. (Economic Times).
- Mindtree promoters in dilemma to decide whether to cede control or decide against selling. VG Siddhartha along with two firms have decided to sell their stake within a month’s time. (Mint).
Earnings To Watch
- 5Paisa Capital
- DCB Bank
- HT Media
- Motilal Oswal Financial Services
- Phillips Carbon Black
- Sagar Cements
Earnings Reactions To Watch
Zee Entertainment (YoY)
- Revenue up 18 percent at Rs 2,167 crore.
- Net profit up 51 percent at Rs 563 crore.
- Ebitda up 27 percent at Rs 753 crore.
- Margin at 34.8 percent versus 32.3 percent.
- Revenue up 22.5 percent at Rs 76.9.
- Net profit at Rs 42 crore.
- Ebitda up 35.7 percent at Rs 20.9 crore.
- Margin at 27.2 percent.
Speciality Restaurants (YoY)
- Revenue up 24.2 percent at Rs 98.5 crore.
- Net profit at Rs 8.4 crore.
- Ebitda at Rs 12.5 crore.
- Margin at 12.7 percent.
Den Networks (YoY)
- Revenue down 6 percent at Rs 308.4 crore.
- Net loss at Rs 32.4 crore.
- Ebitda down 38.8 percent at Rs 48.2 crore.
- Margin at 15.6 percent.
Jay Bharat Maruti (YoY)
- Revenue up 5.3 percent at Rs 458 crore.
- Net profit down 20 percent at Rs 11.2 crore.
- Ebitda up 5.9 percent at Rs 39.2 crore.
- Margin at 8.6 percent.
KPIT Technologies (QoQ)
- Revenue down 6.6 percent at Rs 563.7 crore.
- Net profit down 22 percent at Rs 63.9 crore.
- EBIT down 29.2 percent at Rs 65.2 crore.
- Margin at 11.6 percent.
- Pitti Engineering: Bank of Baroda sold 2.25 lakh shares or 0.67 percent equity at Rs 61.67 each.
- Asian Granito Tiles: GMO Emerging Dom Opportunities Fund sold 3.21 lakh shares or 1.07 percent equity at Rs 130.09 each.
- Jay Shree Tea promoter Manav Investment & Trading sold 1.01 lakh shares from Jan. 10-11.
- Rico Auto promoters acquired 42,000 shares from Jan. 11-14.
- Nath Bio-Genes promoters sold 18,000 shares from Dec. 31 to Jan. 10.
- Satin Creditcare Network promoters acquired 66,000 shares from Dec. 10-14.
(As reported on Jan. 15)
- Gujarat Gas record date for stock split from Rs 10 to Rs 2 per share.
Money Market Update
- Rupee closed at 71.04/$ on Tuesday from 70.93/$ on Monday.
- Nifty January futures closed trading at 10928, premium of 42 points.
- Max open interest for January series at 11,000 Call (open interest at 40.5 lakh shares).
- Max open interest for January series at 10,500 Put (open interest at 40.9 lakh shares).
Stocks In F&O Ban
- Adani Power
- Jet Airways
- Nifty PCR at 1.51 versus 1.35.
- Nifty Bank PCR at 1 versus 0.84.
Macquarie on Life Insurance
- Positives: opportunity size, improvement in operations, persistency and margins.
- Negatives: cyclicality, reliance on intermediaries, regulatory and tax rate roadblocks.
- Prefer ICICI Prudential on cheap valuations, low risk from product regulation and sticky partners
- HDFC Life: Initiated ‘Neutral’ with a price target of Rs 400.
- SBI Life: Initiated ‘Underperform’ with a price target of Rs 555.
- ICICI Prudential: Initiated ‘Outperform’ with a price target of Rs 415.
UBS on Bharat Forge
- Maintained ‘Sell’; cut price target to Rs 480 from Rs 580.
- Muted earnings growth outlook to drive further de-rating.
- Remain cautious on truck cycle into 2020-2021.
- Sharper decline in truck markets and general industrial slowdown remains downside risk.
JPMorgan on GAIL
- Maintained ‘Neutral’ with a price target of Rs 375.
- Potential transmission tariff increase a meaningful positive but timing unknown.
- Non-transmission business facing stress from sharply lower crude prices.
- See risk reward more attractive in IOCL and BPCL versus GAIL on a relative basis.
Morgan Stanley on MCX
- Maintained ‘Equal-weight’ with a price target of Rs 870.
- Q3 beat driven by higher other income.
- Transaction revenue was in line with expectations.
- Investment income higher due to sharp decline in yields.
On Zee Entertainment
- Maintained Buy with a price target of Rs 670.
- Q3 Review: Results were ahead of estimates; Encouraging ZEE5 ramp-up.
- Strong advertising and subscription outlook.
- Upgrade forecasts by 1-4 percent and expect Zee to deliver 19 percent earnings CAGR over FY19-21.
- Maintained ‘Outperform’; hiked price target to Rs 564 from Rs 556.
- Q3 addressed investor concerns on margins and progress of ZEE5.
- Strongly believe Zee is among the most attractive media assets in emerging markets.
- Catalyst: Clarity on promoter stake sale, sustained ramp-up of ZEE5.