A trader at a computer monitor at a brokerage firm in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

All You Need To Know Going Into Trade On March 26 

Asian stocks saw a mixed performance at the open on Tuesday after their biggest slide this year.

Japanese shares climbed at the open, while Australian and Korean benchmarks were flat. U.S. futures were little changed. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.14 percent to 11,381.50 as of 7:05 a.m.

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BQ Live

Also read: Defeat for May Hands Control of Brexit Process to Parliament

Here’s a quick look at all that could influence equities today.

U.S. Market Check

  • U.S. stocks were almost unchanged Monday, when homebuilders climbed thanks to reduced borrowing costs, but technology shares sank as investors took little encouragement from Apple Inc.’s new services offerings.
  • Government bond yields remain near their recent lows as investors gauge recession-risk signals emanating from U.S. Treasuries.

Also read: One by One, Global Bond Markets Are Flashing the Same Warning

Asian Cues

  • The MXAP Asia Pacific Index was up 0.5 percent.
  • Japan’s Topix rose 1.2 percent.
  • Kospi Index edged up 0.2 percent.
  • Australia’s S&P/ASX 200 Index was little changed.
  • Hong Kong’s Hang Seng Index futures rose 0.4 percent overnight.
  • Futures on the S&P 500 Index were little changed

Also read: May Loses Control Over Brexit Endgame in War With Parliament

Commodity Cues

  • Brent crude traded 0.39 percent higher at $67.47 per barrel.
  • West Texas Intermediate crude steadied at $59.27 a barrel.
  • Gold was flat at $1,321.63 an ounce.

Also read: Total Drills in World's Fastest Ocean Current in Africa Oil Search

London Metal Exchange

  • Aluminium resumed declines after a one-day rally, ended 1.1 percent lower.
  • Nickel ended lower for the third day, down 0.2 percent.
  • Lead ended lower for the third day, down 1.03 percent.
  • Tin halted a five-day rally, ended 0.35 percent lower.
  • Copper halted a three-day fall, ended 0.44 percent lower.
  • Zinc halted a two-day fall, ended 0.6 percent higher.

Key Events To Watch This Week

  • U.S.-China trade talks resume, with a cabinet-level American delegation due in China.
  • U.K. Parliament is likely to stage several key votes on Brexit.
  • China’s Boao Forum for Asia holds its annual conference this week. A top Chinese government leader will deliver a keynote speech, and officials including Central Bank Governor Yi Gang and Finance Minister Liu Kun are scheduled to speak.
  • Fed Governor Randal Quarles will speak Friday to the Shadow Open Market Committee on “Strategic Approaches to the Fed’s Balance Sheet and Communications.”

Indian ADRs

All You Need To Know Going Into Trade On March 26 

Stocks To Watch

Jet Airways Resolution Plan

  1. Conversion of Re 1 of Lenders' debt into 11.4 crore equity shares.
  2. Two nominees of promoter - Naresh Goyal and Anita Goyal, and one nominee of Etihad Airways PJSC to step down from the Board. Naresh Goyal to cease the be the Chairman of the company.
  3. Constitution of an Interim Management Committee at the instructions of the lenders to manage and monitor the daily operations and cash flow of the company.
  4. Immediate funding support of up to Rs 1500 crore by lenders by way of issue of appropriate debt instrument against security of its assets which will restore normalcy to company's level of operations.
  5. Bidding process to be initiated by lenders for sale/issue of shares to new investor, the process expected to be completed in June quarter.

Also read: Jet Airways Looks To Restore Its Fleet Size With New Cash From Lenders

  • Grasim Industries: The Bombay High Court granted a stay against the recovery demand worth Rs 5,872.13 crore on account of dividend distribution tax. The company stated in its press release that order passed by the Income Tax Department was wholly unsustainable in law and the department has sought time to file reply. The company said it received the order dated March 22 on March 25.
  • Fitch maintained Tata Steel’s BB IDR on ‘Rating watch Evolving’, as the rating agency awaits completion of the process for the proposed JV with Thyssenkrup. Tata Steel also acquired 230 crore optionally convertible preference shares of Tata Steel BSL (formerly Bhushan Steel) on a private placement basis for Rs 2,300 crore.
  • Newgen Software Technologies said it will incorporate Australian arm with an initial investment of 1.5 million Australian Dollars.
  • Bharti Airtel said that it eliminated ISD Packs for making regular call to Bangladesh and Nepal. Prepaid user can make calls to Bangladesh at Rs 2.99 per minute and to Nepal at Rs 7.99 per minute.
  • DLF said it will consider QIP issue price on March 28. QIP opens from March 25. The floor price for the issue is set at Rs 193.01 per share. On case of anonymity, the management told Bloomberg Quint that this QIP issue will reduce debt by Rs 3,200 crore and promoters will infuse around Rs 2,500 crore. With these moves the existing debt of Rs 7,200 crore as on December 2018, will stand reduced to Rs 1,500 crore.
  • ICICI Prudential Life Insurance OFS: Promoter Prudential Corporation Holdings said it will sell 3.73 crore shares or 2.6 percent of the equity share capital of the company with an over-subscription option of another 1.1 per stake. The floor price has been set at Rs 300 per share which is at a discount of 6.8 percent to the current market price.
  • UCO Bank board approved preferential issue of 175 crore shares at Rs 19.01 each, against the government’s capital infusion of Rs 3,330 crore.
  • Bank of Maharashtra’s shareholders approved issue of 15.5 crore equity shares at Rs 13.25 per share aggregating to Rs 205 crore to the central government.
  • Kalpa-taru Power Transmission acquired 85 percent stake in a Swedish EPC Company for $24 million, which deals in power supply solutions and services.
  • Future Retail board approved the re-appointment of Kishore Biyani as the MD of the company and Rakesh Biyani as joint MD for a three years from May 2, respectively.
  • Tourism Finance Corporation appointed Anirban Chakraborty as CMD.
  • Prabhat Dairy: Competition Commission of India approved the scheme of the company’s sale of its dairy business, which is run by the company’s arm Sunfresh Agro Industries to Tirumala Milk Products.
  • NHPC said that it had started power trading in IEX as trader for J&K Power Development Department with effect from March 22. Sale and purchase of power in Power Exchange is for a period of one year from the date of letter of award (Dec. 12, 2018) and for purchase of 1000 MUs and Sale of 400 MUs through the Power Exchange.
  • Shalby Multispeciality Hospitals got empanelled under “Ayushyaman Bharat Yojana” and “MAA Yojana” for joint replacement surgeries (for knee and hip) and other specified surgeries offers no cost options to the patients covered under the scheme.
  • Religare Enterprises made a complaint against Singh Brothers and their entities relating issuance and redemption of preference shares.
  • MEP Infra Developers arm entered into concession agreements with NHAI for three highway projects in Maharashtra. Financial closure for these project’s finance are cumulatively worth Rs 1,402.5 crore and were achieved on March 11. The Appointed date for these three HAM projects stands at March 25.
  • Suzlon Energy sold balance stake in its two arms for Rs 99.1 crore.
  • Aurionpro Solutions board approved the buyback of 10.8 lakh shares or 4.6 percent of equity capital at a price of Rs 185 per share aggregating to Rs 20 crore.

Also read: DLF Launches QIP To Raise More Than Rs 3,000 Crore

Earnings Reaction To Watch

Kwality (Q3, YoY)

  • Revenue down 80 percent to Rs 362 crore.
  • Ebitda loss at Rs 1,405 crore versus Ebitda profit of Rs 127 crore.
  • Net loss of Rs 1,500 crore versus net profit of Rs 20.9 crore.
  • Other expenses increased due to Rs 1,434 crore provided by the company for fall in value of investments and bad debts.

Bulk Deals

  • Security & Intelligence Services: Steinberg India Emerging Opportunities Fund acquired 5.25 lakh shares or 0.72 percent equity at Rs 829.92 each.

Pledge Share Details

  • Reliance Power promoter Reliance Infrastructure revoked pledge of 25.39 crore shares on March 22.

(As Reported on March 25)

Trading Tweaks

Short Term ASM Framework:

  • GTL Infrastructure
  • Indo Count Industries
  • Supreme Infrastructure
  • GVK Power & Infrastructure
  • Matrimony.Com
  • J.Kumar Infraprojects
  • Asian Granito
  • CESC Ventures
  • Sadbhav Engineering
  • Dilip Buildcon
  • Prestige Estates Projects

Who’s Meeting Whom

  • Gujarat Pipavav Port to meet Sundaram MF and Franklin Templeton on March 27.
  • Arvind Fashions to meet Tata MF, Saif Partners and other investors on March 27.
  • Inox Leisure to meet B&K Securities and UTI on March 28.
  • Syngene International to meet Ward Ferry Management on March 27.
  • PSP Projects to Banyan Tree Advisors on April 1.
  • Symphony to meet Investec Capital Services on March 28.
  • Mahindra Logistics to meet Spark Capital on March 26.
  • Take Solutions to meet Sharekhan, Axis Securities and other investors on March 26.

Insider Trading

  • Mukand promoter Bachhraj Factories acquired 30,000 shares between March 19-20.
  • Jindal Stainless promoter group Abhuday Jindal acquired 1 lakh shares between March 20-22.
  • Eros International promoter Eros Worldwide acquired 1 lakh shares on March 22.
  • V-Mart Retail promoter groups sold 1.5 lakh shares between March 19-20.
  • GNA Axles promoter and director Ranbir Singh acquired 17,300 shares between March 18-20.

Money Market Update

  • The rupee on Monday closed at 68.94/$ versus Friday’s 68.99/$.

Also read: Success of Rare $5 Billion India Forex Swap May Prompt an Encore

F&O Cues

  • Nifty March futures closed trading at 11370, premium of 16 points.
  • Max OI for March series at 11,600 Call, OI at 35.5 lakh shares.
  • Max OI for March series at 11,000 Put, OI at 35 lakh shares.

Stocks In F&O Ban

  • In Ban: Adani Enterprises, Adani Power, IDBI, PNB, Reliance Power
  • Out of Ban: Jet Airways

Put-Call Ratio

  • Nifty PCR at 1.46 versus 1.59.

Fund Flows

All You Need To Know Going Into Trade On March 26 

Brokerage Radar

Citi on Aviation

  • Jet’s restructuring to provide support and help regain market share.
  • This could turn negative for IndiGo on margin front.
  • Jet’s resumption could result in market share loss and lower pricing power for IndiGo.

Goldman Sachs on HDFC Life

  • Initiated ‘Buy’ with price target of Rs 488.
  • Will remain dominant in highly profitable and competitive protection segment.
  • Expect HDFC Life to deliver 27 percent growth in NBV vs 20 percent of peers over FY19-22.
  • Expect margins to expand as HDFC life strengthens its diversified business model.

Goldman Sachs on ICICI Prudential Life

  • Maintained ‘Buy’ with a price target of Rs 421.
  • Well placed to tap into large protection business opportunity.
  • See 25 percent growth in NBV over FY19-22.
  • Management focused on reducing business volatility.

Goldman Sachs on SBI Life

  • Initiated ‘Neutral’ with a price target of Rs 639.
  • Improving bancassurance productivity gives growth upside.
  • Expect 17 percent growth in NBV over FY19-22 on healthy premium growth.
  • Margin upside capped given challenges in protection.

Morgan Stanley on NBFCs

  • Edelweiss: Maintain Overweight; hiked price target to Rs 235 from Rs 205.
  • IndoStar: Resumed Equal-weight with a price target of Rs 380.
  • Edelweiss and IndoStar are making positive changes to their business models.
  • Best positioned to handle this business model transition.
  • Edelweiss: diverse profit pools, capabilities in differentiated segments, partnerships, recent positive developments suggest more potential upside.
  • IndoStar: building a profitable and high yield retail lending business but see execution risks and muted RoE.