All You Need To Know Going Into Trade On March 22
Most Asian markets have opened the new trading week lower as bond yields continue to remain higher.
Benchmark indices slipped in Japan and South Korea along with the MSCI Asia-Pacific index. Markets in Australia traded higher.
The Turkish Lira fell as much as 15% this morning after President Recep Tayyip Erdogan removed the central-bank governor, following a sharper-than-expected hike in interest rates
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, fell 0.3% to 14,695, as of 7:00 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 75 points lower. The index ended with losses of 0.7% on Friday.
- Fed Chairman Jerome Powell reiterated in a Wall Street Journal editorial that the central bank will provide aid to the economy 'for as long as it takes.' Richmond Fed President Thomas Barkin also said in an interview to Bloomberg TV that there is no sign of unwanted inflation pressures yet.
- “We think that nominal bond yields can still shoot higher in the short-term towards 2% and above on inflation concerns. Markets are likely to worry that this move is permanent, rather than temporary,” according to Diana Mousina of AMP Capital Investors.
- Yield on the 10-year treasuries stood at 1.7%.
- West Texas Intermediate crude fell 1.2% to $60.70 per barrel after capping its worst week since October last year.
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Stocks To Watch
- Tata Motors: Former Daimler AG manager Marc Llistosella will not be joining the company as its next Managing Director & CEO as previously announced. Guenter Butschek to continue as the Managing Director & CEO till June 30, 2021.
- Power Grid Corporation Of India: Has signed a Share Purchase Agreement with Jaiprakash Power Ventures for acquisition of 74% stake of JVPL in Jaypee Power Grid at an aggregate cost of Rs 351 crore. Subsequently JPL will become a wholly owned subsidiary of the company.
- Bharat Dynamics: Ministry of Defence has signed a contract with the company for supply of Milan-2T Anti-Tank Guided Missiles to Indian Army at the cost of Rs 1,188 crore.
- Majesco: Aurum Platz makes an Open Offer to public shareholders to acquire up to 74.43 lakh shares or 26% of the total equity. The offer price of Rs 77 per share is at a premium of over 21% to Friday's closing price. On full acceptance of the open offer, the total consideration paid will be Rs 57.31 crore. Aurum Platz entered into a share purchase agreement to acquire the entire 14.78% stake held by the company's promoters for a cash consideration of Rs 32.6 crore, thereby triggering the open offer. As per the December shareholding pattern, public shareholding in Majesco stood at 85.22%.
- Future Group: Filed a appeal against a Delhi High Court ruling pertaining to the sale of its assets to Reliance Industries.
- JSW Energy: A wholly-owned subsidiary of the company, JSW Future Energy, has received Letters of Award for a total wind capacity of 450 MW from Solar Energy Corporation of India against Tariff based Competitive Bid invited by SECI for setting up of 1,200 MW ISTS-connected Wind Power Projects (Tranche - X).
- NMDC: Prices of Lump ore raised by 5% to Rs 5,350 per tonne from Rs 5,100 per tonne. Prices of fines increased by 2.4% to Rs 4,310 per tonne from Rs 4,210 per tonne. Prices on March 6 were left unchanged as compared to those in February.
- Adani Green Energy: The company has signed definitive agreements with SkyPower Global for acquisition of 100% stake in a SPV that owns 50 MW operating solar asset at Telangana. With this acquisition, Adani Green will have operating renewable capacity of 3,395 MW with a total renewable portfolio of 14,865 MW. The cost of acquisition is Rs 317 crore subject to closing adjustments.
- Prabhat Dairy: BSE & National Stock Exchange have given their in-principle approval for the delisting offer made by the company. The bid for the delisting offer opens March 24 and will close on March 31. The floor price of the delisting offer has been set at Rs 63.77 per share.
- NHPC: The Board of Directors inter-alia approved the proposal to form a JV for implementation of Ratle Hydroelectric Project (850 MW) in the Chenab River Basin of Jammu and Kashmir. The board also approved to contribute the initial equity of Rs 51 crore for the JV company.
- Dredging Corporation of India: Has appointed D Subbarao as Chief Financial Officer effective March 19.
- Shriram City Union Finance: Board to meet on March 26 to consider second interim for FY21. The record date for the same, if approved will be April 7.
- L&T Finance Holdings: Board has approved reappointment of Dinanath Dubhashi as the Managing Director and Chief Executive Officer of the company for a further period of five years, subject to the approval of shareholders i.e. till April 13, 2026.
- Bombay Burmah Trading Corporation: Board to meet on March 24 to consider issuing Principal Protected Secured NCDs of up to Rs 125 crore and another issue of Secured NCDs of up to Rs 40 crore.
- Yaarii Digital Integrated Services: Has launched a social commerce marketplace, Yaari, which will enable small businesses and individuals to start their business online via social channels. It is an online reselling app designed to easily allow manufacturers and suppliers to list their products online and make a viable alternate channel to market their products Pan India.
- Paisalo Digital: Has approved the allotment of 26.1 lakh fully convertible warrants being convertible into an equivalent number of equity shares of face value of Rs 10, at an issue price of Rs 705 each to three entities. This has been done on receipt of 25% of the issue price. The fully paid-up equity shares of face value of Rs 10, against each warrant shall be allotted on receipt of the balance 75% of the amount within 18 months.
- Quess Corp: Scheme of Amalgamation for merging of wholly-owned subsidiaries - Greenpiece Landscapes India Pvt. Ltd., Golden Star Facilities and Services Pvt. Ltd., MFX Infotech Pvt. Ltd. and Trimax Smart Infraprojects Pvt. Ltd. is rejected on account of technical requirements. The Company is exploring all options including securing a fresh approval of Scheme of Amalgamation through the Tribunal route under Section 230-232 of the Companies Act, 2013 in the next Board meeting.
- Great Eastern Shipping: Signed a contract to buy a secondhand mid-sized gas carrier of about 35,188 cbm. The vessel is expected to join the company's fleet in Q1FY22. The Company’s current fleet stands at 45 vessels, comprising 32 tankers and 13 dry bulk carriers.
Goldman Sachs On United Spirits
- Upgrade to buy from neutral
- Price target of Rs 683
- Stock offers the best combination of growth and value
- Has an opportunity to build on its market share in scotch whiskey
- See Ebitda margins at 19.6% by FY24 from 16.6% in FY20 owing to improved realisations from its IMFL business and higher scotch contribution
- FY22/23 EPS estimates are 4-6% higher than Bloomberg consensus
- Scenario analysis on restructuring of popular brands suggests that the stock can see further upside of 23% to our target
Nomura on Dr Reddy's Laboratories
- Upgrade to buy from neutral
- Price target cut to Rs 5,065 from Rs 5,165
- Risk-reward is favourable following the recent stock correction
- An approval for Sputnik V is likely in the near-term but financial upsides are uncertain as it will depend on pricing
- Cut the value of Sputink V opportunity to Rs 41 per share from Rs 98 per share earlier
- Higher-than-estimated contribution from product specific opportunities, better-than-expected growth in India, API and Emerging markets are key catalysts
- Price erosion in the U.S. market, delays in approval of key products, adverse currency movements some key risks
Motilal Oswal On Cholamandalam Investment & Finance
- Maintains buy rating
- Price target raised to Rs 640 from Rs 530
- Growth trajectory healthy; asset quality performance impressive
- Margins may expand further with cost of funds declining and trimming of excess balance sheet liquidity
- Expect AUM growth to decline 10% in FY22 but should improve to mid-teens FY23 onwards
- Product diversification is margin accretive
- Return ratios are among the best
- Stock warrants higher multiples despite sharp rerating over the last three months
Emkay On Cement Sector
- Average pan-India prices rose 4-5% month-on-month backed by strong demand and need to mitigate cost escalations
- Cement demand remains strong mainly led by North, East & Central regions
- A second round of price hikes of Rs 10-20 per bag has not been implemented to ensure sustainability of the earlier hike
- Industry may report over 20% year-on-year volume growth in Q4FY21E aided by a low base of March 2020
- Sustaining the price hikes would likely support margins amid rising cost pressures
- Indiabulls Housing Finance: Integrated Core Strategies (Asia) bought 24.29 lakh shares (0.53%) at Rs 215.43 per share. Ishares Emerging Markets Dividend ET sold 56.50 lakh shares (1.22%) at Rs 214.81 per share. Ishares EM Dividend UCITS ETF sold 27.14 lakh shares (0.59%) at Rs 214.81 per share.
- Cyient: The Vanguard Group bought 15.36 lakh shares (1.40%) at Rs 660.13 per share. Integrated Core Strategies (Asia) sold 7.18 lakh shares (0.65%) at Rs 659.68 per share.
- Central Depository Services (India): The Vanguard Group bought 10.47 lakh shares at Rs 608.57 per share.
Who's Meeting Whom
- Hindustan Copper: To meet DE Shaw and SBI MF on March 22.
- Marico: To meet Maple Brown Abbott and Schroders Investment Management on March 22.
- Tata Motors: To meet First State on March 23 and Axis MF on March 26.
- KEI Industries: To meet Edelweiss Securities on March 22 and Motilal Oswal Financial Services on March 24.
- Eris Lifesciences: Promoter Himanshu Shah sold 1.10 lakh shares between March 16-17.
As reported on March 19.
- Ex-Date Interim Dividend: Allcargo Logistics, Mishra Dhatu Nigam, Renaissance Global, The Ramco Cements, GAIL (India), NMDC, National Aluminium Company, Ramco Industries, Swastika Investmart
- Record Date Interim Dividend: Power Finance Corporation
- Record Date Final Dividend: Ambuja Cements
- Price Band Revised From 10% To 5%: Future Enterprises, Mahanagar Telephone Nigam
- Price Band Revised From 10% To 20%: Adani Total Gas
- Move Into ASM Framework: IDFC, Jain Irrigation Systems, Jayaswal Neco Industries, Adani Total Gas
- Move Out Of ASM Framework: Acrysil
- Move Out Short-Term ASM Framework: Likhitha Infrastructure
Money Market Update
- The rupee ended at 72.52 against the U.S. Dollar on Friday as compared to Thursday's close of 72.51.
- Nifty March futures ended at 14,753; premium of 9 points
- Nifty March futures shed 7.2% and 9,063 shares in Open Interest
- Nifty Bank March futures ended at 34,130; discount of 31 points
- Nifty Bank March futures shed 10.2% and 6,122 shares in Open Interest
- Nifty Put-Call Ratio at 0.97
- Stocks In F&O Ban: SAIL, Vodafone Idea