All You Need To Know Going Into Trade On Nov. 19

Asian stocks drifted lower at the open as investors continued to await signs of progress in U.S.-China trade negotiations.

Benchmarks in Tokyo, Sydney and Seoul dipped. Hong Kong futures slipped after violence in the city Monday. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.29 percent to 11,889.50.

Short on time? Well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.

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

• U.S. stocks edged higher to fresh records as investors looked for signs of progress in U.S.-China trade negotiations.
• Oil fell the most in about two weeks from an eight-week high amid dimming prospects for resolution to the long-running U.S.-China trade war.

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Indian ADRs

Stocks To Watch

• Telecom stocks: Bharti Airtel and Vodafone Idea announced plans to increase tariffs from next month, days after the Supreme Court ordered India’s struggling telecom operators to pay pending dues worth thousands of crores.
• Grasim Industries, Vodafone Idea: Aditya Birla Idea Payments Bank filed for voluntary liquidation. Liquidation order was passed on Sept. 18.
• Welspun Corp: The Competition Commission of India approved Plates and Coils Mill-Welspun-Laptev finance deal, according to Bloomberg report.
• India Ratings cut CG Power and Industrial Solutions’ long-term rating and bank facilities to ‘D’ from ‘B’. Rating agency has cited delays in debt payments by the company since last month due to weak performance and tight liquidity.
• Wockhardt clarified that company is looking at various options for sustainable growth for the company. Cipla also commented on the news of the company acquiring select business segment of Wockhardt saying that it is exploring opportunities for growth and has nothing concrete currently.
• REC: Ajit Kumar Agarwal (Director of Finance) to continue to hold additional charge for the of chairman and managing director till Dec. 5 or till a regular incumbent is appointed for the aforementioned post.
• Maruti Suzuki launched BS-VI compliant Wagon R variant for petrol.
• Punjab & Sind Bank revised MCLR across various tenors with effect from Nov. 16. One-month MCLR at 8.15 percent and one-year MCLR at 8.45 percent.
• Zee Entertainment Enterprises: Brickwood Ratings downgraded the non-convertible preference share issuer rating to ‘BWR AA+’ from ‘BWR AAA’, with a credit watch with negative implications due to deteriorating financial flexibility of the group marked by increased pledge of promoter holding.
• Indian Overseas Bank: Directors will meet on Nov. 28 to issue and allot equity shares to the Government of India for capital infusion of Rs 3,857 crore.
• Accelya Solutions said that the company’s holding company Accelya Topco has entered into an agreement for sale of its shares to investment firm Vista Equity Partners.
• Union Bank of India: Ministry of Finance has given in-principle approval to the proposed amalgamation of Andhra Bank and Corporation Bank into Union Bank.
• 8K Miles Software Services: Deloitte Haskins & Sells resigned from the post of Statutory Auditors on Nov. 15.
• Borosil Glass Works: PK Kheruka has been appointed as the chairman of the company with effect from Nov. 18.
• Prestige Estates acquired 29 percent stake in DB (BKC) Realtors from Trinity Capital.
• Yes Bank acquired 20.61 percent stake in Tulip Star Hotels over invocation of pledge of shares.
• Punjab National Bank: Board has given in-principal approval for amalgamation of the Oriental Bank of Commerce and United Bank of India into Punjab National Bank.
• Carlyle plans to sell 3 percent stake in SBI Life Insurance through block deals.

New Offerings

• CSB Bank IPO opens on Nov. 22. The IPO price band is fixed at Rs 193-195 per share.

Brokerage Radar

Macquarie on Bandhan Bank

• Maintained ‘Underperform’ with a price target of Rs 470.
• Reports of unrest among microfinance customers in Assam.
• Assam is second largest state for Bandhan at 18 percent of AUM.
• Must watch how promptly and effectively industry swings into action to allay concerns.

Jefferies on Indian Telecom

• Bharti Airtel: Upgraded to ‘Hold’ from ‘Underperform’; hiked price target to Rs 407 from Rs 280.
• Bharti Infratel: Downgraded to ‘Underperform’ from ‘Hold’; cut price target to Rs 180 from Rs 265.
• Vodafone Idea: Maintained ‘Underperform’; cut price target to Rs 2.4 from Rs 8.
• Post the AGR verdict, the market structure depends on government relief measures.
• Vodafone Idea will still lose a majority of high ARPU subscribers to Bharti.
• Expect Airtel’s market share to increase by 500 basis points to 35 percent
• Expect Infratel Ebitda to decline by more than 10 percent over FY20-22 as Vodafone Idea exits tenancies.

Morgan Stanley on Bharti Airtel

• Maintained ‘Equal-weight’; hiked price target to Rs 410 from Rs 360.
• Intention to increase tariffs is necessary first step in the right direction.
• Await relief measures from the government.
• Hiked price target to factor in H1FY20 numbers.

IIFL on Credit Access Grameen

• Initiated ‘Buy’ with a price target of Rs 930.
• Potential client base and AUM is more than three times the current size.
• With aggressive provisioning policies, NBFC has largely shock-proofed its P&L.
• Positives: continues to follow best practices and de-risk its operations, demonstrated consistency in strategy & execution and has strong & deeply-committed promoter and management team.

HSBC on Castrol India

• Maintained ‘Buy’; hiked price target to Rs 165 from Rs 142.
• Slowdown hits volumes, but margins intact.
• Margins still growing on strong realisations and good cost control.
• Hike price target on lower tax rates.

Trading Tweaks

• Kavit Industries to be in ASM Framework on Nov. 19.
• SEL Manufacturing, Sterling and Wilson Solar, Sanwaria Consumer to move into short term ASM Framework.
• Ansal Housing, Sumeet Industries, Vishwaraj Sugar Industries, Jain Irrigation Systems to move out of short term ASM Framework.
• SEL Manufacturing, Sterling and Wilson Solar, Ansal Housing price band revised to 10 percent.
• Shree Digvijay Cement price band revised to 5 percent.

Who’s Meeting Whom

• Greaves Cotton to meet IIFL AMC, HSBC MF and other investors on Nov. 19.
• Eris Lifesciences to meet ICICI Securities on Nov. 19.
• Finolex Industries to meet Haitong Securities on Nov. 20.
• Tata Elsxi to meet JP Morgan AMC, Neuberger Berman and other investors from Nov. 20-Dec. 5.
• Future Retail to meet JP Morgan AMS, Ward Ferry Management and other investors from Nov. 21-22.
• Eicher Motors to meet Somerset Capital Management, SBI MF and other investors from Nov. 19-20.
• Great Eastern Shipping to meet Equirius Securities on Nov. 19.
• Shriram City Union Finance to meet HSBC Securities on Nov. 19.
• Magma Fincorp to meet IDFC MF on Nov. 19.
• Tata Global Beverages to meet Halo, Hermes and other investors from Nov. 21-22.
• Mahanagar Gas to meet Somerset Capital on Nov. 22.

Insider Trading

• Ultratech Cement promoter group sold 1.27 lakh shares on Nov. 13.
• Music Broadcast promoter Jagran Prakashan acquired 46,000 shares from Nov. 14-15.

Money Market Update

Sovereign bond traders will keep an eye on sale of Rs 9,700 of bonds by states. The government-run banks sold Rs 3,300 crore of sovereign bonds on Monday while foreign banks bought 6 billion, CCIL data show.

Yesterday, yield on the 10-year government bond dropped four basis points at 6.48 percent amid optimism the government will be able to meet the deficit targets.

In the current market, the rupee is expected to open weaker today in line with Asian currencies as investors await signs of progress in the U.S.-China trade negotiations. The implied opening from forwards suggest rupee may start trading at 71.95 to the dollar.

Rupee traders will watch the flows from CA Emerald Investments' plan to raise $393 million dollars in SBI Life placement.

F&O Cues

Index Futures

• Nifty November futures closed at 11,920.9, premium of 36.4 points versus 47.2 points.
• Nifty November Futures open interest down 0.1 percent sheds 21,000 shares in open interest.
• Nifty Bank November futures closed at 31,017.8, premium of 25.7 points versus 43.8 points.
• Nifty Bank November futures series open interest down 0.6 percent, sheds 10,000 shares in open interest

Options

• Nifty PCR at 1.31 versus 1.39 (across all series).

Nifty Weekly Expiry: Nov. 21

• Max open interest on call side at 12,000 (25.9 lakh shares).
• Max open interest on put side at 11,800 (18.2 lakh shares).
• open interest addition seen at 11,950C (+5.4 lakh shares) 12,000C (+5.2 lakh shares), 11,800P (+2.3 lakh shares).

Nifty Monthly Expiry: Nov. 28

• Max open interest on call side at 12,000 (2,37,000 shares).
• Max open interest on put side at 11,600 (21.5 lakh shares).