All You Need To Know Going Into Trade On September 28
Asian markets have begun the new trading week with modest gains as investors weigh signs of recovery in China against a further outbreak of Covid-19 in some parts of the world.
The U.S. Dollar is steady against most of its peers, as are treasuries.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, rose 0.7% to 11,118 as of 7:45 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:
- Benchmark indices in Japan and South Korea have opened with modest gains while those in Australia are declining.
- Futures on the Dow Jones are currently trading higher by 100 points. The index ended 1.3% higher on Friday.
- Technical indicators suggest that stocks in Hong Kong may be poised for a rebound.
- Global equities remain on course for their first monthly loss since March amid rising signs that the pace of economic recovery from Covid-19 will be slow.
- Data over the weekend showed that profits at China's industrial companies grew for the fourth straight month in August.
- The first U.S. presidential debate will take place between President Donald Trump and democratic nominee Joe Biden.
- The final round of scheduled talks between the U.K. and the European Union on a post-Brexit deal take place today.
- West Texas Intermediate crude fell 0.4% to $40.1 per barrel while Gold was little changed at $1,860.8/Oz.
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Stocks To Watch
- Lakshmi Vilas Bank: The bank in a statement on Sunday evening said that its Liquidity Coverage Ratio is currently at 262% as compared to a minimum 100% required by the RBI. The bank continues to enforce cost reduction measures of both direct and indirect costs. Provision Coverage Ratio at 72.6% as compared to 70% prescribed under the Prompt Corrective Action framework. The bank will continue to evaluate proposed amalgamation of the 'Clix Group' with itself. This comes after shareholders rejected the appointment of seven directors, including the CEO at its AGM on September 25. The bank has assured depositors that its senior management along with the Board of Directors will continue to run the day-to-day operations of the bank until a new Managing Director is appointed.
- Vodafone Idea: The government of India said that it will study the arbitration case award in the Vodafone International case. In a separate instance, the telecom regulator TRAI has dropped its probe against the company in the priority plan matter, after it withdrew contentious claims on faster speed and modified its offering.
- Escorts: Says joint venture with Kubota Corporation has begun commercial production of Kubota Tractors from September 25.
- Berger Paints: CEO Abhijit Roy stated that sales for Q2FY21 will be higher than the previous quarter while Q3 sales will be better than the second quarter. He also said that sales in the upcountry markets have been better than metro cities and that the company is not scaling back capex plans.
- Reliance Industries: Reliance Retail gets subscription amount of Rs 7,500 crore from Silver Lake for 1.75% stake.
- Coffee Day Enterprises: Says no negotiation with Tata Consumer has taken place for its vending machine business. Bloomberg News had reported on Thursday that Coffee Day is looking at a valuation of Rs 2,000 crore for its vending machine business.
- Tata Steel: Exercised the right to acquire 34.9 lakh equity shares through a warrant conversion in Tata Metaliks. Pricing for the Warrant conversion is Rs 642 per warrant worth Rs 224.2 crore. Tata Steel's stake in the company will rise to 60.03% from 55.06% earlier.
- Dr Reddy's Laboratories: Launched Tecfidera tablets in the U.S. markets.
- ITD Cementation: MIT increased its stake to 5.95% from 4.96% on September 24.
- Indoco Remedies: Launched Favipiravir tablets used in the treatment of Covid-19.
- Tanla Solutions: CMD Uday Reddy at the company's AGM said that its Blockchain Platform, Trubloq, went commercially live on September 1. He also said that an enterprise grade platform, for which the company has been granted a patent, has passed the Alpha and Beta phases and is ready for launch in October. The company has taken a strategic desition to invest, build & position itself as a platforms company.
- NCL Industries: Has terminated the agreement to establish a JV with China's Qingdao Xinguangzheng Steel Structure to manufacture pre-engineered steel structures in India. The agreement was signed in August 2019.
- Ceat: The board has approved raising Rs 250 crore via NCDs and has also authorised the banking committee to approve raising another Rs 250 crore through NCDs on a private placement basis.
- JSW Energy: Arm JSW Solar received a Letter of Award for total blended wind capacity of 810 MW from Solar Energy Corporation to set up 2,500 MW ISTS-connected blended wind power projects.
- NALCO: Signs agreement with Numaligarh refinery for long-term supply of CP Coke to ensure raw material security.
- Central Bank of India: Board approves QIP closure on September 25. The issue price of Rs 15.38 per share is a 5% discount to the floor price. The lender has raised Rs 255 crore through the issue.
- Thomas Cook: Board has withdrawn the proposal of share buyback due to Covid-19. The board in February had approved a share buyback of 6.9% of total equity worth Rs 150 crore.
- State Bank of India: Board to consider proposal of raising Additional Tier-1 (AT-1) bonds to the extent of Rs 5,000 crore via Basel-III compliant debt instruments on September 30.
- Premier Explosives: Gets arms license from the Arms License Issuance Authority department to manufacture all types of warheads and fuses. The license enables the company to enter into new businesses.
- Deepak Fertilisers: Securities committee to meet on September 30 to consider the allotment of second tranche of Foreign Currency Convertible Bonds worth $15 million.
HSBC On Lupin
- Hold rating maintained
- Price target raised to Rs 925 from Rs 780
- Likely to see short-term benefits of temporary exit of a competitor for gProAir and re-entry in metformin ER market
- Execution remains key for meaningful benefits from critical U.S. & EU launches
- Look for FDA clearance of affected facilities and operational turnaround
- Rally in last six months largely factors in potential upside from significant market share gains for gProAir and LT4
- Revise FY21-23 estimates on the current outlook for key business segments
- Upgrade FY21e/FY22e EPS by 4.6% and 2.3% respectively
Emkay On Bandhan Bank
- Upgrade to buy from hold
- Price target of Rs 390
- Improving collection trends, strong provision buffer
- Strong liability profile and low cost of funds provide flexibility to diversify asset base without diluting NIMs, profit
- Re-orienting business verticals, management structure to gear for next level of growth
- Risk-reward turning favourable
Haitong Securities On Colgate Palmolive
- Outperform rating maintained
- Price target of Rs 1,590
- Volume market share up 70 basis points year-on-year in H1CY20
- Market share in e-commerce channel improved 100 basis points in Q2CY20, while that in modern trade improved 130 basis points
- Ground checks indicate demand for products is strong
- Built-in revenue CAGR of 8.2% over FY20-23, driven by volume growth of 5%
- Build-on EPS CAGR of 10.7% led by margin expansion of 140 basis points over FY20-23
Jefferies On Jubilant Foodworks
- Initiate coverage with buy rating
- Price target of Rs 2,650
- Industry faces severe headwinds led by Covid-19 concerns
- Increased customer focus on hygiene & quality augurs well for branded players like Jubilant
- Industry share of QSR restaurants is abysmally low at < 5% but should gain over time
- Tough macro will result in 14% decline in FY21 SSG
- Valuations are at a significant premium to history
- See 25%+ EPS CAGR over FY20-23E
- Key Risks: Continued disruption from Covid-19, stiff competition from food aggregators, reversal of delivery fees and weak consumer sentiment
Pledged Share Details
- Majesco: Promoters released pledge of 1.04 crore shares on September 21.
- Max Financial Services: Promoter Max Ventures Investment Holdings released pledge of 84.4 lakh shares between September 23-25.
(As reported on September 25)
Who’s Meeting Whom
- Indo Count Industries: To meet Motilal Oswal Financial Services on September 29.
- Symphony: To meet ENAM Securities on September 28.
- Tata Steel: To meet Pinpoint Asset Management on September 29.
- Tata Motors: To meet Fidelity International on October 1.
- Advanced Enzyme Tech: To meet HDFC AMC, MK Ventures and other investors between September 29-30.
- Avanti Feeds: To meet ICICI Securities on September 28.
- Eris Lifesciences: Kuwait Investment Authority acquired 14.54 lakh shares (1.07%) at Rs 540 per share and Promoter Himanshu Shah sold 18 lakh shares (1.33%) at Rs 540.05 per share.
- Andhra Paper: Promoter International Paper Investments sold 11.13 lakh shares (2.8%) at Rs 177.51 per share and Sundaram Mutual Fund acquired 5.2 lakh shares (1.31%) at Rs 177.5 per share.
- AGM Date: Alphageo, Acrysil, Apex Frozen Foods.
- Fund Raising: Shalby.
- Record Date For Share Buyback: Dhanuka Agritech.
- Record Date For Bonus Issue: Suven Pharma (Bonus 1:1).
- Price Band Revision From 20% To 10%: Route Mobile.
- Move Into Short Term ASM Framework: CL Educate, PG Electroplast, Ashima, Gyscoal Alloys, 8K Miles Software Services, Expleo Solutions, Kuantum Papers, Ujaas Energy.
- Move Out Of Short Term ASM Framework: Indoco Remedies, Aegis Logistics, Ausom Enterprise.
Delivery Buying & Selling
- Alkyl Amines: The stock ended with gains of 7% on Friday. 45% of the total shares traded were marked for delivery
- IndiaMART InterMESH: Shares gained 9% on Friday with 43% of the total shares traded marked for delivery.
- Varroc Engineering: The stock gained 9.5% on Friday with 41% of the total shares traded marked for delivery.
- Vinati Organics: The stock gained 10% on Friday with 37% of the total shares traded marked for delivery.
- NCC: The stock gained 14% on Friday with 32% of the total shares traded marked for delivery.
Money Market Update
- The currency ended with gains at 73.61 against the U.S. Dollar as compared to Thursday's close of 73.91.
- Despite posting weekly losses, the rupee was the third best performing currency in Asia for the week.
- Nifty October futures ended at 11,032; discount of 18 points from premium of 36 points
- Nifty October futures shed 3% and 2.3 lakh shares in Open Interest
- Nifty Bank October futures ended at 20,936; discount of 46 points from premium of 83 points
- Nifty Bank October futures shed 8% and 1.3 lakh shares in Open Interest
- Nifty Put-Call Ratio at 1.28
Nifty: October 1 Expiry
- Maximum Open Interest on Call side at 11,500 strike (25.4 lakh shares)
- Maximum Open Interest on Put side at 10,900 strike (21.2 lakh shares)
- Active Options: 11,500 Call (+12.4 lakh shares) and 10,900 Put (+9.6 lakh shares)
Nifty: October 29 Expiry
- Maximum Open Interest on Call side at 11,500 strike (15.8 lakh shares)
- Maximum Open Interest on Put side at 10,500 strike (33.1 lakh shares)