Traders work as a screen overhead shows coverage of the Indian general election on the trading floor of the Motilal Oswal Financial Services Ltd. office in Mumbai, India. (Photographer: Vivek Prakash/Bloomberg)

Stocks To Watch: Ashoka Buildcon, Kansai Nerolac, Lemon Tree, United Bank of India

Wall Street’s wild afternoon rebound failed to carry through to Asia on Friday, with Japanese shares dropping at the open and U.S. futures sliding. The yen edged up, heading for its best two-week advance since February.

Equity benchmarks fell in Tokyo, and saw modest gains in Sydney and Seoul after the S&P 500 Index erased a drop of almost 3 percent in its afternoon rebound -- the biggest upward reversal since 2010. It’s been a week of superlatives for stock traders, after American shares climbed the most in more than nine years on Wednesday.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.18 percent to 10,780.50 as of 7:10 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 Are The Stocks To Watch Out For In Today’s Trade

  • Lemon Tree Hotels entered into a joint venture with private equity firm-Warburg Pincus affiliate ‘Magnolia Grove Investment’ with a primary focus on co-living. This joint venture marks the entry of the company into a new business segment for rental housing accommodation for students and working professionals. The Joint Venture partners will initially invest Rs 1,500 crore in equity over a period of time, with an option to invest another Rs 1,500 crore. Warburg Pincus will hold 68 percent stake while Lemon Tree Hotels will hold 30 percent stake and the balance stake will be held by Patanjali Keswani.
  • United Bank of India: Government said it would infuse Rs 2,159 crore in the equity capital via preferential allotment. (Here’s how much other banks are expected to get)
  • Kansai Nerolac entered in to share-purchase agreement with Perma Construction Aids for Rs 29.1 crores. The target company belongs to construction chemicals industry and the paint company says the acquisition will be completed by Jan. 28.
  • Hindustan Construction Company raised Rs 498 crore via rights issue. The promoter stake in the company has increased from 27.8 percent to 33.12 percent.
  • Majesco’s U.S. Insurance arm announced Jan. 7 as record date for rights offering to its shareholders at $7.1 per share. The company says it will use the net proceeds from this offering to fund the remainder of the Exaxe acquisition, pay off debt and accelerate cloud growth.
  • Ashoka Buildcon’s board approved raising Rs 150 crore via non-convertible debentures.
  • WABCO India clarified that the news of Wabco signing $950 million supply pact with commercial vehicle maker is for its parent company and not for the Indian arm.
  • Corporation Bank appointed Canara Bank’s Executive Director PV Bharathi as its Managing Director and Chief Executive Officer till March 2020.

Also read: Lemon Tree, Warburg Pincus Form Joint Venture To Develop Co-Living Platform

Indian ADRs

Stocks To Watch: Ashoka Buildcon, Kansai Nerolac, Lemon Tree, United Bank of India

Who’s Meeting Whom

  • Mahindra Holidays & Resorts to meet HDFC Securities on Dec. 28.
  • Container Corporation of India to meet Morgan Stanley on Dec. 28.

Insider Trades

  • Grasim Industries promoter Pilani Investment and Industries acquired 7.6 thousand shares on Dec. 26.
  • Jindal Stainless promoter Abhuday Jindal acquired 48.5 thousand shares from Dec. 24 to Dec. 26.

Trading Tweaks

  • Coal India ex-date for interim dividend at Rs 7.25 per share.
  • Rites record date for interim dividend at Rs 4.75 per share.
  • Sayaji Industries record date for stock split from Rs 10 to Rs 5.
  • Triveni Turbine record date for share buyback.
  • Ruchi Soya Industries price band revised to 5 percent.

F&O Cues

  • Nifty January futures closed trading at 10,810, premium of 30 points.
  • Maximum open interest for January series call at 11,000 strike price, open interest at 23.9 lakh shares.
  • Maximum open interest for January series put at 10,500 strike price, open interest at 29.1 lakh shares.

Stocks In F&O Ban

  • Adani Power

Put-Call Ratio

  • Nifty PCR at 1.54 from 1.39.
  • Nifty Bank PCR at 0.89 from 1.16.
Stocks To Watch: Ashoka Buildcon, Kansai Nerolac, Lemon Tree, United Bank of India

Brokerage Radar

Nomura on Banks

  • PSU banks require Rs 1 lakh crore of capital versus Rs 83,000 crore of government plans.
  • Planned capital infusion should broadly be enough to cover capital needs of PSU banks.
  • Latest capital infusion of Rs 28,000 crore to address 50 percent capital needs of PCA banks.
  • Continue to prefer corporate private banks followed by SBI.

HSBC on Tata Motors

  • Maintained ‘Hold’; cut price target to Rs 200 from Rs 210.
  • JLR’s weakness looks set to bottom out in 2019; absolute valuations appear undemanding.
  • Upside triggers are missing with multiple worries over long-term business outlook.
  • Cash flows to remain stretched for the foreseeable future.

Edelweiss on Hero MotoCorp

  • Maintained ‘Hold’ with a price target of Rs 3,162.
  • Management says availability of liquidity is not concerning for two wheelers, but channel inventory is high.
  • Management to focus on features over pricing as a sustainable business strategy.
  • Stock re-rating likely to be driven by success of recent as well as upcoming launches.

Emkay on Two-Wheelers

  • Subdued festive season behind; two wheeler volumes to recover gradually
  • Volume growth seen at 11 percent and 5 percent for the next two financial years respectively.
  • Eicher Motors: Upgraded to ‘Buy’ from ‘Accumulate’; hiked price target to Rs 27,700 from Rs 25,700.
  • Hero Moto: Downgraded to ‘Hold’ from ‘Buy’; cut price target to Rs 3,350 from Rs 3,560.
  • TVS: Maintained ‘Accumulate’; hiked price target to Rs 595 from Rs 590.
  • Bajaj Auto: Maintained ‘Accumulate’; hiked price target to Rs 2,910 from Rs 2,870

On Ashok Leyland

Stewart & Mackertich

  • Initiated ‘Accumulate’ with a price target of Rs 113.
  • See limited market share gains due to Tata Motor’s aggressive pricing strategy.
  • See pre-buy of commercial vehicles in the next financial year in due to BS-VI; volume de-growth in 2020-21 highly expected.
  • Scrappage policy to create additional demand, but still no clarity on the same.

Emkay

  • Downgraded to ‘Hold’ from ‘Buy’; cut price target to Rs 113 from Rs 152.
  • Channel check indicate a reversal in MHCV sales cycle driven by surplus capacity, increasing cost of ownership, selective financing by NBFCs and high base.
  • Product mix turned adverse after implementation of new axle-load norms.
  • Competitive intensity increased due to subdued volumes and aggressive marketing by Tata Motors.