All You Need To Know Going Into Trade On March 13
Stocks in Asia dipped in early Wednesday trading as gains seen at the start of this week showed signs of easing and bond yields retreated amid concern over the economic outlook.
Share indexes in Japan, South Korea and Australia all opened marginally lower as small gains in U.S. shares overnight failed to carry through to Asia. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, was little changed at 11,323 as of 7:15 a.m.
Short on time? Well, then listen to this podcast for a quick summary of the article!
Here’s a quick look at all that could influence equities today.
U.S Market Check
- U.S. stocks capped a second day of gains, while Treasuries rallied after weak inflation data bolstered bets the Federal Reserve can stay patient.
- The yield on 10-year Treasuries held at about 2.60 percent.
- Japan’s Topix index slipped 0.2 percent.
- Hong Kong’s Hang Seng Index futures earlier added 0.1 percent.
- Australia’s S&P/ASX 200 Index fell 0.4 percent.
- South Korea’s Kospi index declined 0.2 percent.
- Futures on the S&P 500 Index were flat.
- Brent crude traded 0.37 percent higher at $66.92 per barrel.
- Gold held at $1,302.09 an ounce.
- West Texas Intermediate crude gained 0.5 percent to $57.17 a barrel.
London Metal Exchange
- Aluminium ended 1.4 percent higher.
- Nickel halted a four-day decline, ended 1.6 percent higher.
- Lead halted a two-day fall, ended 0.48 percent higher.
- Tin ended a two-day decline, up 1.3 percent.
- Zinc ended higher for the second day, up 3.6 percent.
- Copper ended higher for the second day, up 1 percent.
Key Events To Watch This Week
- Chinese retail sales and industrial production data are scheduled for release this week. The National People’s Congress is set to wrap up on Friday.
- Bank of Japan Governor Haruhiko Kuroda will speak on Friday, after he and his board meet to decide on monetary policy.
Stocks To Watch
- Kotak Mahindra Bank sought the court’s interim protection on founder stake issue. The bank’s lawyer Harish Salve stated that the bank can give an undertaking that founders won’t vote in excess of 20 percent until May 2020. The hearing has been deferred till April by the Bombay High Court.
- Axis Bank named Rakesh Makhija as non-executive chairman of the bank for a period of three years with effect from July 18. He will replace Dr. Sanjiv Mishra as his tenure expires. Rakesh Makhija is existing chairman of SKF India and director of two TATA group companies and an arm of Axis Bank.
- HDFC Life Insurance OFS to non-retail investors received 2.6 times demand on the first day. Bids were received at indicative price of Rs 365.2 per share. Offer for retail investors opens on March 13. Standard Life will go for the over-subscription option for the OFS, where it will additionally sell 2.95 crore shares or 1.46 percent of equity of HDFC Life Insurance.
- Alkem Labs: USFDA approved a new generic of Diovan (valsartan) by Alkem Labs to help relieve the recent shortage of this medicine. Shortages were the result of multiple recalls of generic valsartan products, as certain lots contained nitrosamine impurities.
- Biocon received FDA Form 483 with two observations. First observation stated procedures designed to prevent microbiological contamination is not being followed. Second observation stated that written records of investigations into unexplained discrepancies don’t have adequate conclusion. (Bloomberg News)
- Raymond clarified that termination of development management agreement with Corpus Realty for its realty project is because the company itself wants to undertake the development due to operational efficiencies. The project is expected to progress as per schedule.
- Bharti Airtel clarified that the board’s approval for 32 percent stake sale in Bharti Infratel to its arm Nettle was already informed to the exchanges and intimations where given to the exchanges.
- NMDC board declared an interim dividend of Rs 5.52 per share. Record date set at March 25.
- TVS Motors increased its stake to 10.29 percent in its credit services arm for Rs 30 crore.
- Radico Khaitan clarified that the company has a number of operational plants at Rampur and has sent representations, taken steps as per the pollution control board. The company stated that impact on closure of the plant can be made upon the response from the pollution control board on response from the company.
- Reliance Communications: India appeal court deferred the company’s plea to release tax refund money to March 13. The company needs the tax refund money to honor Supreme Court’s order for payment to Ericsson and it has no other means to pay, lawyer Kapil Sibal told the Court.
- CMI executed its maiden export order from Mauritius for the supply of underground power cables.
- V-Mart opened three new stores in Himachal Pradesh, Jharkhand and UP, taking the total store count to 207.
- Jet Airways said that four more aircraft had been grounded due to non-payment to lessors.
Also read: India Grounds Boeing 737 Max Planes
- L&T prepares for hostile takeover of Mindtree (Mint)
- State-Run MSTC Ltd. IPO at Rs 121–128 per share open for dale, offer close March 15.
Also read: MSTC IPO: All You Need To Know
Bajaj Consumer Care
- Promoter Bajaj Resources sold 1.01 crore shares or 6.85 percent equity at Rs 316.42 each.
- ICICI Pru MF acquired 9 lakh shares or 0.61 percent equity at Rs 314.8 each.
- Polus Global Fund sold 6 lakh shares or 1.25 percent equity at Rs 54.75 each.
- Anil Dhanuka acquired 6 lakh shares or 1.25 percent equity at Rs 54.75 each.
Pledge Share Details
- JSW Steel Promoter Groups release pledge of 1.5 crore shares from March 7-8.
(As reported on March 12)
- Matrimony.com price band revised to 10 percent.
- Sadhana Nitro Chem price band revised to 2 percent.
Stocks Short-listed In ASM Framework
- IL&FS Transportation Networks
- SPL Industries
- Shankara Building Products
- Siti Networks
- Excel Realty N Infra
- Reliance Communications
- Mahamaya Steel Industries
- Cantabil Retail
Stocks Short-Listed In Short-term ASM Framework
- Zee Media Corporation
- J.Kumar Infraprojects
Who’s Meeting Whom
- Titan to meet Elo Mutual Pension Insurance and Genesis Investment Management on March 13.
- Shriram City Union Finance to meet JM Financial Institutional Securities on March 18.
- Cipla to meet Temasek Holdings Advisors and Pari Washington Co. Advisors between March 26-27.
- Eicher Motors to meet IDFC MF, Marshall Wace Global Opportunities and Pari Washington Co. Advisors between March 13-15.
- P&G Hygiene and Healthcare to meet SBI MF and LIC on March 13.
- Advanced Enzymes Technologies promoter groups sold 85 lakh shares on March 8.
- Bajaj Auto promoter Bajaj Holdings acquired 3.91 lakh shares on March 8.
- Ceat promoter group STEL Holdings acquired 32,700 shares between March 8-11.
- Laurus Labs promoter Dr Raju Srihari Kalidindi sold 10 lakh shares on March 11.
- Wipro promoter Azim Premji Trust sold 2.67 crore shares on March 8.
- JBF Industries promoter Chinar Mittal acquired 1.17 lakh shares between March 6-11.
- Panama Petrochem promoter group acquired 38,000 shares between March 8-12.
Money Market Update
The rupee on Tuesday strengthened for a second straight session and closed at its highest in two weeks at 69.71/$. It closed at 69.89/$ on Monday.
- Nifty March futures closed trading at 11,337, premium of 37 points.
- Max open interest for March 28 series at 11,400 Call, open interest at 22.6 lakh shares.
- Max open interest for March 28 series at 11,000 Put, open interest at 39.3 lakh shares.
Stocks In F&O Ban
- IDBI Bank
- Jet Airways
- Reliance Infrastructure
- Reliance Power
- Nifty PCR at 1.81 versus 1.73.
- Bank Nifty PCR at 1.54 versus 1.29.
Credit Suisse on Pidilite
- Maintained ‘Neutral’; hiked price target to Rs 1,125 from Rs 950.
- Strong outlook for 2019-20 as margin pressures are behind.
- Gross margins should see a significant improvement starting March quarter
- Price hikes and lower input cost to aid margins.
HSBC on Ramco Cement
- Initiated ‘Reduce’ with a price target of Rs 540.
- Pricing power is elusive, along with the rest of the industry.
- Will struggle to raise prices much above cost inflation to improve returns.
- Capex programme to raise grinding capacity does not improve backward integration.
CLSA on DLF
- Upgraded to ‘Buy’ from ‘Sell’; hiked price target to Rs 229 from Rs 167.
- Leasing business to deliver double-digit growth with stable balance sheet.
- Development business has achieved stability.
- Higher price target reflects higher value to land-bank and lower capital rates.
CLSA on Nestle
- Maintained ‘Outperform’; hiked price target to Rs 11,750 from Rs 11,500.
- Annual report shows advertisement spends at a 15-year high.
- Multi-year high return ratios; double-digit growth in FCF.
- Commentary suggests that virtuous cycle of growth has begun at Nestle.
Citi on Kotak Mahindra Bank
- Maintained ‘Neutral’ with a price target of Rs 1,340.
- Promoters willing to cut stake by May 2020.
- RBI concerned about its authority being undermined.
- Believe that potential options for dilution are raise capital, stake sale or acquisition.
Citi on Maruti Suzuki
- Maintained ‘Buy’; hiked price target to Rs 8,300 from Rs 7,600.
- Increase valuation multiple as we believe that earnings downgrades could trough over 2019-20.
- Falling fuel prices and interest rates also bolster confidence.
- Expect slight volume pick up post elections and into the festive season.
HSBC on Tata Motors
- Maintained ‘Hold’; hiked price target to Rs 190 from Rs 170.
- See limited downside to FY20/21 JLR volume estimates now.
- Margins remain highly contingent on cost-cutting and Brexit.
- Valuing JLR at a premium to peers such as BMW.
HSBC on CG Power
- Maintained ‘Hold’ with a rice target of Rs 34.
- CG Power made a series of announcements oriented towards generating greater investor confidence.
- Step in right direction, but it leaves some ambiguity and there is still a lot to be done.
- Investors still looking for clarity on sale of Hungary operations.
Citi on Dilip Buildcon
- Maintained ‘Buy’; hiked price target to Rs 761 from Rs 725.
- Guidance for 2019-20: Margins in 17-18 percent band; sales at Rs 11500 crore.
- Mgmt. expects significant order wins in the second half of the next financial year.
- Expects improvement in balance sheet with net debt to equity guidance of 0.7-0.8 times in 2019-20.