All You Need To Know Going Into Trade On Sept. 17

Asian stocks slipped at the open as investors assessed heightened geopolitical risks in the aftermath of the strike on Saudi Arabia’s crude production that sent oil prices soaring.

Benchmarks were modestly lower in Japan, Australia and South Korea. S&P 500 futures were flat after U.S. stocks slipped on Monday. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.13 percent to 10,992.50 as of 7 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.

Here is all that could influence equities today:

• Oil pulled back slightly after soaring 15 percent the previous session. The dollar maintained gains against peers.
• Saudi Aramco now faces weeks or months before the majority of output is restored at the giant Abqaiq processing plant, adding a fresh headwind for the global economy.
• The pound held on to a retreat after no signs of progress in Prime Minister Boris Johnson’s first face-to-face meeting on Brexit with European Commission President Jean-Claude Juncker.

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Indian ADRs

Stocks To Watch

• KKR Group acquired a 10 percent stake in CG Power & Industrial Solutions for Rs 89 crore via open market transactions. Seller for these shares for the company’s publish shareholder Vistara ITCL, which held a stake of 21.63 percent for June quarter. In March, CG Power said that creditors invoked 6.76 crore pledged equity shares held by one its promoters Avantha Holdings. Vistara ITCL on behalf of debenture holders BOI AXA Credit Risk Fund, KKR India Financial Services and KKR India Debt Opportunities Fund II - had invoked the shares.
• Tata Consultancy Services and General Motors have launched a new partnership with General Motors for Global Vehicle Engineering. The information technology company will acquire GM’s technical center in Bengaluru and partner with General Motors over the next five years.
• DLF has sold nine acres of land to American Express for building its office campus for Rs 288 crore.
• GVK Power & Infra’s transportation arm has terminated concession agreement with NHAI on account of material breach and defaults on the part of the road authority. The company has handed over the toll operations of Deoli Kata Project to NHAI.
• State Bank of India: Staff Unions have called for a strike by Bank Employees from Sept. 26-27. Bank’s work maybe impacted to some extent because of the strike.
• Kaveri Seed: Board to consider share buyback on Sept. 24.
• NBCC signed a memorandum of understanding with Utkal University, Odisha for a construction contract worth Rs 390 crore.
• Glenmark Pharma received orphan drug designation from the U.S. Food and Drug Administration for bispecific antibody for the treatment of multiple myeloma. (Bloomberg News)
• Rico Auto Industries has closed a joint venture with Singapore’s Ultra Fairwood to manufacture different variants of e-vehicles due to lack of clear policies of the Government.
• SMS Pharmaceuticals: U.S. FDA has issued design for manufacturing information request to the company and requested to prove information to demonstrate that company’s Ranitidine API manufacturing process does not contain N-Nitrosodimethylamine impurity.
• Bayer Cropscience: Group has closed Monsanto integration in India. Monsanto products will retain their brand names and become a part of Bayer’s product portfolio. Shareholders of Monsanto India will get two equity shares of Bayer CropScience for every three equity shares held by them.
• NACL: Arbitrator has pronounced the order of Rs 24 crore to the company pertaining to company’s insurance claim to a fire accident at its Srikakulam Plant in 2012 against Oriental Insurance.
• Pharma Stocks: Allergan said proposed generic versions of treatment for irritable bowel syndrome with diarrhea by Aurobindo Pharma, Alkem Labs, Hetero, MSN Laboratories, Sun Pharmaceutical and Zydus Cadila infringe as many as six patents for Viberzi. Allergan is seeking a court order blocking copies until after the patents have expired, and to collect cash compensation if copies are made before then, according to complaint filed Friday in federal court in Wilmington, Delaware. (Bloomberg News).
• Lemon Tree Hotels has signed a license agreement for a 80 room hotel in Durgapur. Hotel is expected to be operational by January 2023.
• Morepen Laboratories to consider raising funds on Sept. 19.
• IL&FS Transportation Networks defaulted in payment of non-convertible debentures interest worth Rs 3.4 crore, which were due on Sept. 2016.
• Wipro has inked a strategic partnership with German based company Industrie 4.0 Maturity Centre for digital solutions.
• Allahabad Bank: Board has approved amalgamation of the Bank into Indian Bank.
• Corporation Bank: Board has given in-principle approval for amalgamation of the Bank into Union Bank of India.
• Aavas Financiers: Board has approved allotment of NCDs up to Rs 345 crore to International Finance Corporation.
• Syndicate Bank: S&P Rating Agency has revised the Long-Term Issuer Credit Rating to Positive from Stable.
• Quess Corp: EGM for approval of shareholders for amalgamation of 4 wholly owned arms into the company to be held on Oct. 10.
• Pidilite Industries has incorporated an arm to carry in business of manufacturing materials used in the construction industry.

Brokerage Radar

UBS on Asian Paints

• Maintained 'Buy'; hiked target price to Rs 1,900 from Rs 1,750.
• Market share gains and high-end paints to be the main growth driver.
• Distribution expansion to help gains in low-end portfolio.
• Potential market share gains and return on invested capital improvement is not priced in.

CLSA on Bharti Airtel

• Maintained 'Buy'; hiked target price to Rs 415 from Rs 390.
• Focus on ramping up 4G data subscribers.
• An unlikely disruption of fixed-line broadband.
• Gearing comfortable; no compulsion of asset sale.

UBS on Infosys

• Downgraded to 'Neutral' from 'Buy'; hiked target price to Rs 900 from Rs 850.
• Rally prices in better revenue and margin visibility.
• Financial year ending 2020 to remain strong; slowing trends in second half of current financial year/financial year ending 2021 to cap upside.
• Expect more structural market gains which should help medium-term outperformance.

UBS on Pidilite Industries

• Downgraded to 'Neutral' from 'Buy'; hiked target price to Rs 1,500 from Rs 1,425.
• Valuation driven downgrade; should continue to lead in adhesive.
• Could lose market share in waterproofing but growth likely to remain robust.
• Premiumisation holding up despite slowdown in the overall market.

Credit Suisse on Cement

• Industry in a weak spot; price discipline may be tough to sustain due to weak demand.
• Demand growth to be weak as several underlying drivers seem to be losing momentum.
• Trend of earnings per share cuts may continue as demand disappoints versus expectations.
• UltraTech: Initiated 'Underperform' with target price of Rs 3,400.
• ACC: Initiated 'Neutral' with target price of Rs 1,500.
• Ambuja: Initiated 'Neutral' with target price of Rs 195.

Morgan Stanley on Titan

• Upgraded to 'Overweight' from 'Equal-weight'; hiked target price to Rs 1,300 from Rs 1,100.
• Using windfall margins from recent customs duty hike to invest in demand generation.
• Ongoing marketing and promotion spends are unprecedented and consumers are responding.
• Strong growth in difficult macro environment should be rewarded by re-rating.
• Channel checks suggest growth in the second half of August was strong at 20 percent year-on-year.

Investec on FMCG

• Changing dynamics favour large players.
• Lesser impact of an evident slowdown.
• Long-term drivers remain intact.
• Benign inflation and lower competitive intensity will aid earnings growth.
• Britannia: Initiated 'Hold' with target price of Rs 2,831.
• Colgate: Initiated 'Sell' with target price of Rs 1,162.
• Dabur: Initiated 'Buy' with target price of Rs 522.
• Emami: Initiated 'Hold' with target price of Rs 329.
• Godrej Consumer: Initiated 'Hold' with target price of Rs 657.
• HUL: Initiated 'Buy' with target price of Rs 2,086.
• ITC: Initiated 'Buy' with target price of Rs 285.
• Jyothy Lab: Initiated 'Buy' with target price of Rs 186.
• Marico: Initiated 'Hold' with target price of Rs 412.
• Nestle: Initiated 'Hold' with target price of Rs 13,343.

Nomura on ICICI Prudential

• Maintained 'Buy' with target price of Rs 510.
• Robust protection growth versus sluggish savings business momentum.
• Major surprise on protection growth; value of new business to driven by protection.

Trading Tweaks

• Astral Poly Technik record date for bonus share issue at 1:4.
• Patel Engineering ex-date for Rights Issue at 7:5 at a premium of Rs 8 per share
• Tata Communications ex-date for Demerger.
• Pricol, Aditya Birla Money, SMS Lifesciences, Williamson Magor to move into short term ASM Framework.
• Gravita, Navkar Corporation, Nitco price band revised to 10 percent.

Pledge Share Details

• Ajanta Pharma promoter Ravi Agrawal Trust released pledge of 10 lakh shares on Sept. 12.
• JSW Steel promoter Danta Enterprises created a pledge of 3 lakh shares on Sept. 5.
• JSW Energy promoter Danta Enterprises created a pledge of 25 lakh shares on Sept. 5.

Who’s Meeting Whom

• MCX to meet JP Morgan Asset Management on Sept. 17.
• Greaves Cotton to meet Wellington Management and Amansa Capital on Sept. 19.
• Bharat Forge to meet Canara Robeco, Mirabilis Investment Trust and other investors from Sept. 17-20.
• Rallis India to meet IDFC Securities and Securities Investment Management on Sept. 18.
• Mahindra Lifespace Developers to meet Invesco on Sept. 17.
• Mahindra & Mahindra to meet Nomura Asset Management on Sept. 17.
• Shriram City Union Finance to meet Duro Capital on Sept. 17.
• Voltas to meet Elara Securities, Limiar Capital Management and other investors from Sept. 18-19.

Insider Trading

• Mangalam Cement promoter Vidula Consultancy Services acquired 1.25 lakh shares on Sept. 12.
• Anant Raj promoter Ashok Sarin acquired 52,500 shares from Sept. 9-12.
• Jagran Prakashan promoter group Devesh Gupta acquired 41,600 shares on Sept. 12.

Money Market Update

• The rupee snapped a seven-day winning streak to close at 71.60/$ versus 70.93/$ on Friday.

F&O Cues

September Futures

• Nifty Sept. futures closed at 11,017 premium of 13.7 points versus 29.6 points.
• Nifty futures open interest up 5 percent, adds 7.6 lakh shares in open interest.
• Bank Nifty Sept. futures closed at 27,889.9, premium of 34.9 points.
• Bank Nifty futures open interest down 5 percent, sheds 78,800 shares in open interest.

Options

• Nifty PCR at 1.16 versus 1.34 (across all series)

Nifty Weekly Expiry: Sept. 19

• Max open interest on call side at 11,100 (27.2 lakh shares).
• Max open interest on put side at 11,000 (19.5 lakh shares).
• open interest addition seen at 11,100C (+9.2 lakh shares), 11,000C (+8.8 lakh shares).
• open interest shedding seen at 11000P (7.3 lakh shares).

Nifty Monthly Expiry: Sept. 26

• Max open interest on call side at 11,200 (31 lakh shares).
• Max open interest on put side at 10,800 (30.2 lakh shares).