Indian stock market morning report by Keynote Capitals (October 21, 2008, Tuesday, 7.00 a.m. GMT)
Economic and Corporate Developments
- The rupee opened close to the 49 per USD mark this morning.
- Crude oil prices moved up to $74.78/barrel.
- The prime minister, who is also a former finance minister, has cautioned that India's economic growth may decelerate to 7.5% in FY09. due to the ripple effects of the global financial crisis and liquidity crunch.
- RBI cuts repo rate by 100bps to ease liquidity. On back of the repo rate cut, the government also cancelled its Rs 10,000-crore bond auction as after deciding to bring down the cost of borrowings for banks, it does not make sense for the government to borrow at a higher rate.
- Idea Cellular will spin off its cellular phone service licences in two operating service areas to comply with the telecom M&A guidelines. Idea earlier this year acquired Spice Communications which provides services in the Punjab and Karnataka service areas. While Idea also has its own licences in these service areas, as per regulations, one company cannot own more than 10% in two competing licences within a service area.
- IFCI suffers Rs120Cr loss on Hindalco & Tata Motors rights issues. It had sub-underwritten about Rs400Cr for the rights issues of Hindalco & Tata Motors and is now saddled with these shares that have a current market value of less than Rs280Cr.
- The Indian aviation industry continues to witness a slump with domestic air traffic in September decreasing by almost 20% (y-o-y) In August, traffic had decreased by 16%(y-o-y)
- Daiichi Sankyo has acquired 8.19crore shares (52.5%) from Ranbaxy promoters. Ranbaxy now becomes a subsidiary of Daiichi Sankyo. The promoter stake has been transferred as an off-market transaction & it will pay tax on transaction as per the applicable rate.
- Corus has announced plans to cut production in Europe by up to 1mn tonnes over the next 3 months due to slowing demand. On back of the slowing demand has China’s leading steelmaker Baosteel has decreased its ex-works prices for December contracts by between $59-154/ per tonne.
- Thermal plants face coal shortage as more than 60% of India’s coal-based power plants are running with less than a week’s consumption of coal, threatening to affect power availability at a time when India’s peak deficit is hovering at around 15%.
Results to be announced today
Hero Honda, Crompton Greaves, Tech Mahindra, Hindustan Zinc, Indiabulls Financial Services, Zee Entertainment, Wockhardt, United Spirits, Power Finance Corp, Jaiprakash Associates and Ashok Leyland.
US markets overnight
The US markets ended up 4.7% as investors welcomed positive developments in credit markets and Fed Chairman Bernanke supporting the idea of a 2nd fiscal stimulus package. Bernanke feels that 2nd fiscal package should be targeted to boost overall spending and economic activity, aimed at improving credit for consumers, home buyers, business and other buyers and limit long-term effects on the government's budget deficit. All the 10 sectors posted a gain with financials ending up 2.8%; however, thin volumes were traded. Credit markets showed improvements as LIBOR declined across all terms. The difference between what banks pay each other for three-month loans and what the government pays, known as TED Spread, declined 65 bps to 2.96%. Leading economic indicators were up by 0.3% in September, first gain since April.
Views on markets today
Following the strong overnight close of the US markets, the Asian markets have followed suit this morning. The market’s reaction to the repo rate cut by RBI is largely positive. However, the prime minister has warned of slower economic growth during the current year. We believe stocks have been oversold over the last week in particular, and the relief rally seen yesterday may continue in the early part of the session today. However, possibility of some profit taking towards the close of the session cannot be ruled out.
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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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