All You Need To Know Going Into Trade On Sept. 30

Stocks in Asia declined as investors weighed the latest signs of trade tensions and China’s economy continued to show weakness in manufacturing.

Japanese equities led losses, while shares in South Korea posted a modest retreat and Chinese equity futures slipped. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.1 percent to 11,573.50 as of 6:50 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’s all that could influence equities today.

• Brent crude futures nudged up 0.3 percent, after a 1.3 percent slide on Friday to finish its worst week since early August.
• The S&P 500 retreated on Friday to end at three-week low, after Bloomberg reported the Trump administration is considering sweeping limits to capital-market investments.
• In China, it’s the final day of trading before a week-long holiday.

Get your daily fix of global markets here.

Key Events/Data To Watch

• India fiscal deficit data for April-August period.
• India eight infrastructure industries index for August, prior 2.1 percent.
• India Q2 current account balance, Bloomberg estimate at - $16.0 billion, prior -$4.6 billion.

Indian ADRs

Stocks To Watch

• Lakshmi Vilas Bank clarified on Religare Finvest’s complaint with Economic Offences Wing that mere registration of FIR against the bank does not mean anything at this stage. “The Bank is committed to cooperate with the investigating agencies and regulatory authorities apparently in order to bring out the malicious attempts of Religare Finvest to mislead the public to cover up massive fraud indulged by their own promoters/ employees/ group companies,” according to its statement. Besides, the Reserve Bank of India put the bank under Prompt Corrective Action framework. The bank clarified that PCA does not mean moratorium for the bank. There are no restrictions on operations by depositors. Bank can also undertake lending activities to all segments except corporates and other stressed and high risk sectors.
• Indiabulls Housing Finance said that public interest litigation filed by Citizens Whistle Blower Forum came up for hearing before Delhi High Court on Sept. 27 when the court was informed that the arguments made in the petition are a pack of lies motivated by vested interest and has been filed without any research even on publicly available records of the Company. The matter is listed for hearing on Dec. 13. The company also said that it has filed an application before the Delhi High Court for Perjury and misrepresentation under oath against Prashant Bhushan for willfully filing a PIL full of false and incorrect information and thereby causing wilful reputational loss to the Company. The Perjury petition against Prashant Bhushan will come up for hearing next week. Even a criminal defamation case against Prashant Bhushan has been filed.
• Reliance Capital: announced the completion of 21.54 percent stake sale in its mutual fund arm Reliance Nippon Life Asset Management Ltd. to joint venture partner Japan's Nippon Life Insurance for Rs 3,030 crore. The company will further monetise its balance 4.28 percent stake in RNAM worth Rs 700 crore. Besides, Reliance capital sold subsidiaries Reliance Capital Trustee Co. and Reliance Capital AIF Trustee Company to Nippon Life Insurance Company for Rs 1.8 crore.
• Sundaram Multi Pap said that ECL Finance Ltd. has disbursed Loan of Rs 25 crore to the company and further it has repaid the entire outstanding of Term Loan & Cash Credit facilities of SBI & Cash Credit facilities of IDBI Bank and hence company is successfully released from the restructuring of banking limits.
• Tata Power’s solar arm won 105 MWP bid for floating solar project worth Rs 343 crore.
• Seamec has entered into charter party worth $1 million with Posh Subsea.
• Gujarat Alkalies & Chemical: Board to appoint expert to explore the options relating to capital restructuring in the best interest of increasing the value of investment of shareholders. Till that time, the decision of split of equity shares of the Company and other consequential matters was deferred.
• Allcargo Logistics: The National Company Law Tribunal approved amalgamation of the company’s shipping arm with self.
• Union Bank of India said that Rs 6,216 crore has been remitted by the Government on Sept. 27.
• IDBI Bank: Board has granted in-principle approval to divest 6.23 crore equity shares, or 19.18 percent stake on Asset Reconstruction Company (ARCIL).
• Cox & Kings: Statutory Auditor DTS & Associates have resigned with effect from Sept. 26, citing that there has been an absence of any committed timelines for publishing the first quarter’s result for the current financial year 2020. Besides, the International Air Transport Association has terminated its license to the company for selling tickets and has asked company to surrender IATA ID Card. The company has as requested the IATA authorities to reinstate the Company’s IATA License against clearance of dues. The company also signed Term sheet with EBIX Software and will move business travel corporate clients to EBIX. The deal was done after after IATA ended ticket licence.
• Voltas: Board approved amalgamation of wholly owned arm Universal Comfort Products with the company.
• Bandhan Bank: NCLT Kolkata approved amalgamation of Gruh Finance with Bank. The scheme was already sanctioned by NCLT Ahmedabad. Scheme of Amalgamation will become effective upon the filing of the orders passed by both NCLT Kolkata and NCLT Ahmedabad with the respective jurisdictional Registrar of Companies.
• Mcnally Bharat Engineering has entered into a collaboration agreement with Turkish company Kaylon.
• Punjab & Sind Bank received Rs 787 crore from Government of India in connection with the capital infusion.
• Jain Irrigation Systems said that Working Capital Lenders in India have signed an Inter Creditor Agreement on Sept. 27.
• Syndicate Bank to link all new floating rate for personal, retail and MSMEs to the Repo Rate with effect from Oct. 1.
• Indian Overseas Bank has received a capital infusion of Rs 3,857 crore from the Government of India.
• V-Mart Retail has opened three new stores across Madhya Pradesh and West Bengal.
• 63 Moons Technologies has completed sale of 55.35 percent stake in Atom Technologies to NTT Data. The company continues to hold 36 percent stake in Atom Technologies and will have one-third representation on board as well.
• UCO Bank: Board to consider Issue of equity shares against Capital Infusion of Rs2,130 crore from Government of India.
• United Bank of India has received Rs 1,666 crore capital infusion from the Government of India. Board has proposed to secure the shareholders' approval to the proposed preferential allotment by a Special Resolution by convening an Extraordinary General Meeting/ conducting Postal Ballot shortly.
• Central Bank of India has received Rs 3,353 crore capital infusion from Government of India.
• Future Consumer acquired 50 percent stake in Genoa Rice Mills, thus making it the company’s wholly owned arm.
• Punjab National Bank has received a capital infusion of Rs 13,091 crore by the Government.
• DHFL defaulted in payment bonds and interest worth Rs 5 crore to PNB Gilts, according to Bloomberg report.
• Cipla: U.S. Food and Drug Administration Current Good Manufacturing Practice inspection was completed at the company’s Goa plant and 12 observations were issued. None of them were none related to data integrity. The inspection was conducted from Sept. 16-27.
• Aster DM Healthcare: The company acquired additional 9.49 percent stake in its subsidiary Sri Sainatha Multispeciatility. The total stake in subsidiary was increased to 67.5 percent from 58 percent.
• Inox Leisure: The NCLT approved scheme of merger with Swanston Multiplex Cinema with the company.
• GMR Infra: The Board approves allotting of four Optionally Convertible Debentures to Doosan Power Systems. The company will raise Rs 290 crore via issue of four OCD’s.

New Offering

• IRCTC IPO opens today. The government plans to raise close to Rs 638 crore by selling 2 crore shares, or 12.6 percent stake, at Rs 315-320 apiece through the IRCTC IPO, according to a red herring prospectus.

Trading Tweaks

• Aarti Industries record date for bonus share issue at 1:1.
• Monsanto record date for amalgamation.
• Snowman Logistics, GATI, Themis Medicare, Dai-Ichi Karkaria to move into short term ASM Framework.
• Pioneer Distilleries price band revised to 10 percent.
• Manpasand Beverages, Ruchi Soya Industries, Vikas EcoTech, Reliance Naval and Engineering to move out of ASM Framework.

Brokerage Radar

Morgan Stanley on Titan

• Maintained ‘Overweight’; hiked price target to Rs 1,450 from Rs 1,300.
• Corporate tax cuts will increase Titan's earnings by above 5 percent.
• Expect sharp increase in dividend payout and improvement in return ratios.
• Strong growth in difficult macro environment can help sustain high stock valuations.

Nomura on Lupin

• Maintained ‘Buy’ with a price target of Rs 913.
• Tarapur FDA observations are procedural; do not expect an escalation.
• 4 of Lupin’s manufacturing sites are classified as OAI.
• 100 ANDAs are pending approval from these sites.

Morgan Stanley on Asian Paints

• Downgraded to ‘Equal-weight’ from ‘Overweight’; hiked price target to Rs 1,820 from Rs 1,600.
• Balanced risk reward at current prices; reluctant to push valuation multiples beyond certain levels.
• Remains one of favourite long term plays on consumption growth in India.
• Superior near-term growth, faster market share gains and better cost absorption can make us positive.

BofAML on Hero Moto

• Maintained ‘Buy’ with a price target of Rs 3,150.
• Inventory levels should ease with festive demand uptick.
• Hero ready for BS-VI change; new launches to fill gaps.
• Expect good monsoon, stable crop prices to boost rural consumption in 2020-21

UBS on LIC Housing Finance

• Maintained ‘Neutral’; cut price target to Rs 450 from Rs 550.
• Neutral on mortgage spread and asset quality concerns.
• NIM could be at risk from aggressive pricing by government banks.
• Asset quality outlook remains challenging.

CLSA on Reliance AMC

• Maintained ‘Buy’ with a price target of Rs 300.
• Nippon Life now 75 percent owner; management team expected to stay largely intact.
• Key benefit would be if the transition can help the AMC to reclaim market share.
• Nippon could also help the company secure international mandates for fund management.
• Improvement here would support better core growth and improvement in its valuation.

CLSA on Indian Metals

• Weakening global growth weighing on commodity prices.
• The falling cost curve weakens the case for a steel price rally.
• Base metal prices also under pressure; retain cautious view on India metals.
• Reiterated ‘Sell’ on Tata Steel, JSW Steel, Hindalco & Vedanta; ‘Buy’ on Coal India.

Credit Suisse on IndiGo

• Maintained ‘Outperform’ with a price target of Rs 2,000.
• Several structural positives remain in place; watch out for passenger growth, planes and yields.
• Extended rains may have an impact on seasonal improvement in yields.
• Positives: growth opportunity, strong balance sheet and cash flows, dominant market share and fleet advantage.

IDFC Securities on YES Bank

• Maintained ‘Underperform’; cut price target to Rs 35 from Rs 75.
• Top three stress loan exposures are 85 percent of net worth and two times the existing base of GNPAs.
• Sharply cut earnings estimates on higher credit cost, higher dilution and lower margins.
• Given huge capital shortage, believe merger with large state owned bank is the only way out.

On L&T

Macquarie

• Maintained ‘Outperform’; hiked price target to Rs 1,936 from Rs 1,853.
• Contracting capacity severely constrained which augurs well for margins.
• Order inflows and execution have held up in the second quarter.
• Hyderabad Metro traffic to beat current expectations.

Morgan Stanley

• Maintained ‘Overweight’; cut price target to Rs 1,753 from Rs 1,786.
• Tide seems to be in favour of industrials as a thrust on public capex continues.
• See domestic private capex revival following the big corporate tax cut announcement.
• L&T remain top pick with demand revival on anvil and lower interest rates.

Who’s Meeting Whom

• ACC to meet Millennium Partners on Sept. 30.
• Mahindra & Mahindra Financial Services to meet Citigroup Global Markets, Goldman Sachs Asset Management and other investors from Sept. 30-Nov. 20.
• Shriram City Union Finance to meet Sundaram Asset Management on Sept. 30.

Insider Trading

• Advanced Enzyme Technologies promoter Atharva Green Ecotech acquired 6.29 lakh shares on Sept. 26.
• Vakrangee promoter Dinesh Nandwana acquired 5.22 lakh shares on Sept. 27.
• GFL promoter Inox Leasing & Finance acquired 1 lakh shares on Sept. 25.
• Anant Raj promoter Amar Sarin acquired 2.15 lakh shares from Sept. 24-25.
• Zee Media Corporation promoter 25FPS Media sold 1.04cr shares from July 26-Sept. 20.

F&O Cues

October Futures

• Nifty October futures closed at 11579.5, premium of 67.5 points versus 59.6 points.
• Nifty futures open interest down 2 percent, sheds 2.3 lakh shares in open interest.
• Nifty Bank Oct futures closed at 30,080.9, premium of 204 points versus 222 points.
• Nifty Bank futures open interest up 9 percent, adds 78 lakh shares in open interest.

Options

• Nifty PCR at 1.19 versus 1.32 (across all series).

Nifty Monthly Expiry: Oct. 3

• Max open interest on call side at 11,600 (20.6 lakh shares).
• Max open interest on put side at 11,500 (12.3 lakh shares).
• Max open interest addition seen at 11,600C (+10.5 lakh shares), 11,700C (+6.2 lakh hares).

Nifty Monthly Expiry: Oct. 31

• Max open interest on call side at 11,500 (17.2 lakh shares).
• Max open interest on put side at 11,000 (18.2 lakh shares).