Indian stock market morning report by Keynote Capitals (October 15, 2008, Wednesday, 7.00 a.m. GMT)
Economic and Corporate Developments
- The rupee fell sharply this morning to 48.40 per USD, from yesterday’s close of 48.04/06, due to the fall in Asian markets, which is likely to depress local markets today.
- In order to enable companies to raise funds easily from overseas markets, India is likely to further relax pricing rules for ADRs and GDRs. The government is also considering further relaxation in the overseas borrowing rules for companies, as part of efforts to improve the liquidity crunch in the domestic market.
- Tata Motors’s UK subsidiary, Tata Motors European Technical Centre Plc, has bought a 50.3% stake in Norwegian electric vehicle firm Miljoe Grenland/Innovasjon for Rs9.4Cr ($2mn). The Norwegian firm will produce electric vehicles based on Tata Motors's products. The first product to be launched is the Indica EV in Europe during 2009.
- Spot prices of steel shot up by Rs 1,500 per tonne in Punjab’s Gobindgarh mandi, India’s largest ferrous metalsselling market yard, in the last two days on news of global production cuts and a sudden spurt in construction sector demand. However, JSW Steel is likely to cut product prices by the end of the month, but has no plans to cut production.
- The Rs1100Cr buyback programme of DLF, which was supposed to open today, is being rescheduled to comply with some regulatory requirements
- Hindustan Construction Company (HCC) has claimed equity valuation of its subsidiary Lavasa Corporation (Lavasa) at Rs10000 Cr, based on Bank of India’s investment of Rs150Cr in Lavasa in the form of Convertible Debentures.
- Promoters of Nagarjuna Constructions have raised their stake to 24.16% by acquiring close to 1.2mn shares.
- Reliance Capital has acquired a 15% stake in Hong Kong Mercantile Exchange.
Results to be announced today
L&T, HCL Tech, CMC, Container Corporation of India, ICSA India, Kavveri Telecom, Kingfisher Airlines
US markets overnight
The US markets ended down 0.8% after the government's latest financial relief efforts were offset over fears that the economy still faces challenges. The US treasury announced $250bn will be spent from $US700bn rescue package to buy shares in banks and financial firms. To participate in the program, financial institutions will have to agree to executive compensation limits, including elimination of golden parachutes. Participation is voluntary, though it appears that firms will be taking the Treasury up on its offer. To begin with nine of the largest financial institutions in the world will receive $125bn, including Bank of America, Citigroup, Goldman Sachs, Merrill Lynch, State Street, JP Morgan Chase, Morgan Stanley, Wells Fargo and Bank of New York Mellon. With this relief plan, the financial sector gained 6.4%. In addition, FDIC will guarantee newly issued unsecured debt from banks through June 30, 2012. Credit markets showed signs of improvement, although they remained tight. Dollar Libor, the rate banks charge each other for short-term loans fell. TED Spread fell by 21bps to 4.36%. Earnings were mixed as Johnson & Johnson posted 3Q earnings growth while PepsiCo reported lower-than-expected EPS growth.
Views on markets today
Following cues from the US markets, Asian markets opened weak today. Fresh worries of a slowing global economy have impacted stocks of shipping companies and exporters in Asian markets. While the Nikkei is volatile, the Hang Seng recorded a sharp drop early in the session. Back home, bear dominance is seen rising again. Yesterday the market rally could not sustain, and the Sensex ended up losing a large part of the gains. Increasing recessionary pressures and the liquidity crisis are becoming major issues for the RBI and government. In a major development, RBI has introduced a special liquidity window of Rs20,000Cr to tide over the unprecedented liquidity crisis. It has relaxed the borrowing norms for some funds that have seen huge redemptions in the past few days. It is estimated that recent redemptions from liquid and liquid plus schemes amount to Rs30,000Cr. We may see weakness in the markets today following global cues.
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Indian stock market daily morning report (February 09, 2010, Tuesday)
The Sensex bounced back from the early slide yesterday, closing with marginal gains. The Government’s forecast that the economy would grow by 7.2% this fiscal year, reinforcing expectations of strong industrial growth, along with positive European markets helped markets recover. Most of the buying was seen in capital goods, banking and real estate stocks, whereas metal and auto stocks witnessed selling pressure. Market breadth was marginally weak at around 0.92x. FIIs sold equities worth Rs9.35bn, while domestic institutions bought equities of Rs3.8bn.
Indian stock market and companies daily report (February 09, 2010, Tuesday)
The benchmark indices logged marginal gains after swinging sharply in highly volatile trade. IT stocks played the lead role in the recovery; however, metal pivotals remained subdued, as metal prices fell on the LMEX. Telecom stocks advanced on bargain hunting. Rate-sensitive banking shares recovered from the day's low, while auto stocks were mixed. The BSE Sensex and the NSE Nifty rose by a marginal 0.1% each. The BSE Mid-cap and Small-cap indices were down by 0.1% each. Among the front-liners, Bharti Airtel, RCOM, ONGC, HLL and M&M were up by 2-3%, while Tata Steel, Hindalco, Wipro, Jaiprakash Associates and NTPC were down by 1-4%. In the mid-cap segment Chambal Fertilisers, Nagarjuna Fertilisers, Core Projects, Kansai Nerolac, Procter & Gamble were up by 5-7%, while Indraprashtha Gas, Gujarat NRE Coke, Torrent Pharma, Spice Communications and REI Agro, were down by 4-9%
Indian stock market daily morning report (February 08, 2010, Monday)
The Sensex continued its downward trend last Friday, closing below the 16,000 mark on concern over Europe's sovereign debt, indications of weak US jobs data and a fall in commodity and energy prices. Persistent selling pressure was seen across the board and all sectoral indices closed negative with real estate, metals and capital goods stocks were the worst affected. Auto stock also declined after a government-appointed panel recommended additional duty on diesel-powered vehicles. Indian markets were open for a couple of hours last Saturday, for the purpose of software testing. Market breadth was extreme weak at around 0.21x as investors sold large cap stocks. FIIs sold equities worth Rs17.2bn, while domestic institutions bought equities of Rs11.68bn.
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Godrej Properties IPO review and analysis by Angel Broking, 9 December 2009
Godrej Properties Limited (GPL) intends to develop its projects through joint development agreements with land owners. Under this asset-light model, GPL will enter into revenue, profit or area-sharing agreements with land owners, instead of an outright purchase of the land. This model avoids direct land dealings for GPL and the locking-up of extensive capital in land. Around 80% of GPL's existing land bank will be executed through joint developments with partners. The Godrej brand name has been associated with quality and strong corporate governance. Both of its existing listed entities, Godrej Consumer Products and Godrej Industries have given CAGR Returns of 48% and 77%, respectively, to investors since 2001. We believe that GPL could leverage its parentage brand (with respect to access to the land at Vikhroli and a strong customer preference towards it), assuring a timely delivery of execution. More than 50% of GPL's existing land bank is exposed towards township projects and in one location (Ahmedabad), which will be executed over the next ten years. Any delay in this execution or a fall in property prices in Ahmedabad will impact our NAV estimates, as 50% of our NAV is derived from this project.
JSW Energy Ltd IPO review and analysis by Nirmal Bang, 8 December 2009
JSW Energy Ltd. (JSWEL) is a power project development company, which is developing, and will operate and maintain, power projects in India. The company has two thermal power projects under operation, with a combined installed capacity of 860 MW. JSWEL is a part of the JSW Group, a leading business group in India. JSW Group has a presence in high growth sector like Steel, Energy, Aluminium, Cement, Infrastructure and Logistics. Post IPO holding of Promoter and Promoter Group would be 78.12%
JSW Energy IPO review and analysis by Angel Broking, 7 December 2009
JSW Energy (JSWEL) currently has operational capacity of 995MW and is in the process of executing projects with capacity of 2,655MW. In addition, the company has 7,740MW power generation projects at an early stage of development. A major portion (2,145MW) of JSWEL’s upcoming capacities is expected to be operational by FY2011E thereby providing near-term visibility. Out of the plants under construction, the company expects to commission 570MW by end FY2010E, while another 1,575MW is expected to get operational in FY2011E. Thus, a robust portfolio and near-term Revenue visibility is a major positive for the company.
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Indian auto sector monthly update (January 2010), 5 February 2010
Indian Banking Report January-February 2010, 4 February 2010
Indian telecom monthly update (December 2009), 3 February 2010
Third quarter review of Indian monetary policy 2009-10, 1 February 2010
Indian Banking fortnightly report (January 2010), 18 January 2010
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