Indian stock market morning report by Keynote Capitals (October 23, 2008, Thursday, 7.00 a.m. GMT)
Economic and Corporate Developments
- The rupee dropped to a record low of 49.68/69 per USD this morning, following the sharp decline in Asian markets.
- Crude oil prices fell more than 5% to $66.89 per barrel.
- In another effort to ease liquidity crunch by Indian companies, the RBI has eased ECB norms, allowing companies to borrow up to $500mn for rupee expenditure under the automatic route for permissible end uses. It has removed the minimum average maturity period of 7 years for loans of over $100mn for rupee expenditure by infrastructure firms.
- The government will inject fresh capital up to Rs3000Cr in 7 PSBs to improve CAR of banks by over 12%. According to RBI data, banks which have low CAR at the end of March 2008 were UCO Bank (10.09%), Andhra Bank (11.61%), Central Bank of India (10.42%), Bank of Maharashtra (10.26%), Dena Bank (11.09%), Vijaya Bank (11.22%) and Indian Overseas Bank (11.96%). The finance minster also stated that the central government may fail to meet Budget targets for the fiscal and revenue deficit for the current fiscal year 2008-09.
- Moody's has downgraded outlook on Tata Steel from stable to negative, due to pressure on cash flow generation of Tata Steel's UK subsidiary which could impact the company's consolidated performance. However, the rating for the company remains the same and only the outlook has changed to negative.
- According to the CEO of TCS, the company is pursuing about 20 large deals despite the global economic turmoil and has a healthy deal pipeline.
- Reliance Infrastructure plans to borrow Rs17000-18000Cr ($3.4 - 3.65 bn) over the next five to six years for funding ongoing projects.
- Is PE returning to RE? Orient Global, a Singapore-based PE fund, has invested Rs120Cr to buy stakes in HDIL and Indiabulls Real Estate (IRE) via the open market. The fund acquired 32.5 lakh shares & 56.5 lakh shares of HDIL and IRE respectively.
Results to be announced today
ACC, Bajaj Auto, Binani Cement, Birla Power, Cummins, Dabur Pharma, Dr Reddy’s Labs, Deepak Fert, Everest Kanto, Exide Inds, GAIL, Garware Offshore, Gateway Distriparks, Grasim, Jagran Prakashan, Jyothy Labs, KEC Int, Nirma, Praj Inds, Punj Llyod, Sterlite Inds
US markets overnight
The US market had its 7th largest drop in history, ending down 5.7%. The fall was on account of weak corporate results, gloomy outlook and fall in commodity prices. Improvement in lending rates failed to bring relief. Most (56%) of the companies reported better-than-expected earnings for the latest quarter but outlook remains negative. On the corporate front, McDonald's was a bright spot after reporting strong quarterly earnings due to robust global sales growth. The fast food chain expects sales to remain strong as consumers seek cheaper food options during economic downturn. Wachovia reported 3Q loss of $23.9bn on real estate write-downs. Merck plans to cut 7,200 jobs (13% of its total workforce) and Yahoo plans to lay off 1,500 employees (10% of its workforce). Libor in dollars fell 16bps to 1.12%, the lowest level since June 2004. Crude continues to slide settling around $67/barrel.
Views on markets today
Asian markets plummeted this morning on fears of a global recession. A major sell off in the exporter stocks pulled the Nikkei down to its lowest level in over five years. The Hang Seng is trading below its sentimentally crucial support level of 14,000. Back home, Indian markets are seen following global cues. Yesterday, the Sensex dropped 5% from its high of 10455. TCS reported 8.5% growth in topline and 1.5% in bottomline in Q2, which was far below expectations. TCS is cautious about FY09 due global financial turmoil. We may see momentum in large cap IT sector counters. A few major results will keep market volatile today. Results of cement majors ACC, Grasim and Madras Cement would be keenly awaited by traders. However, markets would be more interested in Reliance Industries results, also to be announced today. The counter has witnessed a sharp drop of 31% over the last one month. Last but not least, the announcement of WPI based inflation data which may continue its slide for this week as well. Overall, we may see huge volatility persist in the markets today with a weakness due to weak 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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