A train travels across a bridge as the sun rises over the LG corp. twin buildings in the Yeouido financial district of Seoul, South Korea. (Photographer: SeongJoon Cho/Bloomberg)
At 9 AM tomorrow morning, I'll share a small video message with my fellow Indians.
कल सुबह 9 बजे देशवासियों के साथ मैं एक वीडियो संदेश साझा करूंगा।Markets across Asia have opened higher on Friday while U.S. futures are trading lower post Thursday's surge.
Oil prices are paring thursday's 22 percent gains after U.S. President Donald Trump said that both Russia and Saudi Arabia will cut production.
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, rose 0.87 percent to 8,230 as of 7:25 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's a quick look at all that could influence equities today
- Markets in Japan, South Korea and Australia are trading with gains while the Yen and Euro are declining.
- U.S. Markets ended higher on Thursday led by Energy shares due to the rise in oil prices.
- U.S. President Donald Trump on Thursday tweeted that he expects Russia and Saudi Arabia to cut oil production by almost 10 million barrels per day.
- Jobless claims in the U.S. doubled from last week to a record 6.6 million. More people in the U.S. have now lost their jobs than the whole 2008-09 recession.
- West Texas Intermediate Crude trades 4.7 percent lower at $24.15 per barrel after a 22 percent rise on Thursday.
- Yield on the 10-year treasury in the U.S. was little changed at 0.6 percent.
Get your daily fix of the global markets here.
Stocks To Watch
- RBL Bank Q4 Update: Net Interest Margin at all-time high. Net Interest Income grew higher than advances and balance sheet growth. Liquidity Coverage Ratio for March at 127 percent. Reduction in bulk deposits from government entities / corporation. Asset quality position in the legacy book remains consistent with the guidance given in Q3FY20.
- HUL-GSK Health Merger Concall: This is an all-equity merger. GSK Plc to hold 5.7 percent in HUL while Unilever's stake to fall to 61.9 percent from 67.2 percent. April 17 will be the record date for issuance of fresh shares. HUL to not pay any brand royalty.
- Aurobindo Pharma: The deal to acquire Sandoz's U.S. generic oral solids and dermatology business has been mutually terminated. The decision was taken as approval from the U.S. Federal Trade Commission for the transaction was not obtained within the anticipated timeline.
- Reliance Industries: To raise Rs 25,000 crore via NCDs.
- JSW Steel: Promoters pledge additional 2.3 percent stake
- OMCs: Given the current crisis, the companies will not pass on the cost incurred to produce BS-VI fuel. The companies were earlier supposed to hike prices by Rs 0.5-1 per litre. OMCs have incurred a capex of Rs 35,000 crore.
- SBI: Managing Director CS Shetty said that he has given an assessment of Covid-19 emergency credit lines to operational level executives. In working capital facilities, the deferred dues will be collected immediately after the three month period. The one-time settlement scheme and Rin Samadhan scheme were ending by March 31 has been extended these schemes by another 3 months.
- ICICI Bank: Reduces interest rate on savings bank accounts and term deposits less than Rs 2 crore. Interest rates on savings accounts below Rs 50 lakh cut by 25 basis points to 3.25 percent. Interest rate on accounts above Rs 50 lakh too cut by 25 basis points to 3.75 percent. The changes will be effective from April 9.
- KIOCL: The company's production of pellets increased by 6 percent to 2.375 million tons and dispatches increased by 7 percent to 2.356 million tons, for FY20.
- ONGC: Moody's Investors Service has downgraded the company's local and foreign currency issuer ratings to Baa2 from Baa1. The outlook on all ratings remains negative.
- Adani Green Energy: Competition Commision of India approves formation of JV with Total S.A. in the solar power generation business in India.
- Tata Power: Has completed a sale of its entire 50 percent stake in its South African joint venture for Rs 659.7 crore or ZAR 1,550 million.
- CreditAccess Grameen: Increased its stake in Madura Micro Finance by 0.42 percent to 76.06 percent.
- Shilpa Medicare: Finished dosage formulation facility in Telangana got EU GMP certification by the Austrian authority. The inspection was held between January 13-17. The company's affiliates have registered their products (Oral Solid & Injections) with European authorities for commercial distribution.
- Welspun Enterprises: Names Ved Mani Tiwary as deputy CEO.
- CSB Bank: Reduces repo linked lending rate from 5.15 percent to 4.4 percent.
- Jammu And Kashmir Bank: RBI extended the term of RK Chhibber as Chairman and Managing Director for a period of three months with effect from April 10, or till the appointment of a successor, whichever is earlier.
- Ashiana Housing: ICICI Prudential MF increases stake by 0.29 percent to 7.27 percent on March 27.
- IIFL Finance: CDC Group acquires 15.46 percent stake in the company post the corporate arrangement scheme for IIFL group companies. It brought back its own secured notes listed at SGX-ST, amounting to $15 million through open market and further initiated cancellation of notes.
- Indiabulls Ventures: To acquire 58 percent stake in Transerv for Rs 76.06 crore. The target company is in the business of issuing pre-paid instruments. The remaining 42 percent stake in the afore-mentioned company is held by Indiabulls Consumer Finance.
- Gateway Distriparks: The proposed sale of the company's entire holding in Snowman Logistics to Adani logistics was not completed by March 31. Both parties are in discussion for the completion of the transaction.
- Cipla: Announced the successful completion of Phase-3 clinical study for a generic version of GSK's Advair Diskus®. According to IQVIA (IMS Health), Advair Diskus® and its generic equivalents had U.S. sales of approximately $2.9 billion for the 12 months through February 2020.
- Reliance Infra: Has defaulted on payment of interest obligation amounting to Rs 29.89 crore. The company said its total financial indebtedness stood at Rs 6,190 crore as on March 1, 2020.
- Cadila Healthcare: Received the final approval from the U.S. FDA to market Lamotrigine Extended-Release Tablets. This medication is indicated for the treatment of certain types of seizures and will be manufactured at the group's manufacturing facility at SEZ, Ahmedabad.
- Jubilant FoodWorks: Partners with ITC Foods to deliver everyday grocery essentials offered by ITC Foods.
- Future Retail: Fitch cuts long-term Issuer Default rating to B- and placed it under Rating Watch Negative.
- Cyient: Has been providing the Telangana State Police with drone-based surveillance technology to implement the Covid-19 lockdown.
- Pharma Companies: U.S. FDA has issued letters to all manufacturers of Ranitidine across dosage forms requesting withdrawal of all prescription and over-the-counter ranitidine drugs from the U.S. market.
- Honda Siel Products: The board approved the resignation of Siddharth Shriram as Chairperson and Independent Director of the company. The company has also terminated a joint venture agreement entered between Japan's Honda Motor and Usha International. Takahiro Ueda has been appointed as Chairperson of the company.
Covid-19 Impact
- Sterlite Technologies: Stated in its con-call that the company's China plant is operating at pre-Covid utilisation levels. The Brazil plant has been operational, while the Italian plant is expected to restart by April 6. The company is not carrying a significant amount of inventory and services projects in India are on a temporary pause. The company reported an additional order book of Rs 1,500 crore from clients.
- Indian Oil Corporation: Has invoked force majeure to defer some cargoes for the month of April. It has sought to defer 4 VLCC cargoes from the Middle-East.
- Apollo Tyres: Hungarian plant has been closed down.
- Seamec: Contract with Posh Subsea for the company's vessel concluded on March 31 due to Covid-19, causing difficulties in operation in the offshore field.
March Auto Sales
- Tata Motors: Domestic sales fell 84 percent to 11,012 units. Commercial Vehicle sales fell 87 percent to 7,123 units. Passenger Vehicle sales fell 68 percent to 5,676 units. The company will henceforth stop reporting monthly wholesale numbers from next month (i.e. April 2020) and instead report quarterly wholesale and retail numbers.
- Eicher Motors: Total Royal Enfield sales fell 41 percent to 35,814 units. Exports rose 33 percent to 3,184 units.
- Atul Auto: Sales down 76 percent to 1,091 units.
- Hero MotoCorp: Total sales fell 42 percent year-on-year to 3,34,647 units.
- TVS Motor: Total sales fell 55.5 percent year-on-year to 1,44,739 units.
Brokerage Radar
Kotak Securities On Axis Bank
- Upgrade to buy from reduce
- Price target cut to Rs 620 from Rs 740
- Setting the stage for a meaningful bounceback
- Positives: Asset mix, loan growth and liabilities
- See Axis Bank as a strong player in the financial services space in the long-term
Investec On Hindustan Unilever
- Buy rating maintained
- Price target of Rs 2,522
- Horlicks acquisition by HUL and not Unilever will reduce aggregate royalty payout
- Potential taxation benefits on goodwill amortisation will likely outweigh the marginal negatives on financials
HSBC On Bajaj Finance
- Buy rating maintained
- Price target cut to Rs 3,750 from Rs 4,860
- Recent fall in stock price the sharpest ever in the past decade
- Fall due to concerns over slower growth, higher credit costs
- Cut earnings estimates to factor in lockdown impact
- Still remains best positioned among peers
IDFC Securities On Hindustan Unilever
- Outperformer rating maintained
- Price target of Rs 2,324
- Acquisition gives another large opportunity of market development
- Gains will be imminent given strong brands, low penetration and HUL's playbook of driving premiumisation and reach
Investec On Cipla
- Buy rating maintained
- Price target of Rs 625
- Approval / launch of Advair in FY23 as we expect at least one round of queries from the FDA
- Big opportunity considering the complexity around development and high capital outlay
- Expect Cipla to generate annual sales of $80-100 million in a four player market
Daiwa Capital On Coal India
- Buy rating maintained
- Price target of Rs 290
- Key concern is subdued demand for coal
- Missed production and dispatch target for FY20
- Risk of coal inventory catching fire due to summer heat
- Has to reduce coal production volumes in the coming months
Credit Suisse On Aurobindo Pharma
- Downgrade to underperform from neutral
- Price target cut to Rs 345 from Rs 450
- Sandoz deal call-off exposes stock to FDA risk on Unit-IV and Unit-VII
- Deal was accretive and an important catalyst
- Largest drug Ertapenem also witnessing high competition
BOBCAPS On Aurobindo Pharma
- Upgrade to buy from add
- Price target cut to Rs 500 from Rs 560
- Sandoz deal termination alleviates leverage concerns
- Deal cancellation raises growth concerns for U.S. business in medium-term
- Risk of multiple downgrades subsides with comfort on leverage returning and resilient margins
Morgan Stanley On RBL Bank
- Underweight rating maintained
- Price target of Rs 240
- Bank said deposit outflows mainly from government, corporates
- Stable corporate asset quality
- See some rise in NPAs in SME, retail due to lockdown
Bulk Deals
- Paisalo Digital: Antara India Evergreen Fund acquired 2.65 lakh shares (1.04 percent) at Rs 159 per share and Davos International Fund sold 2.65 lakh shares (1.04 percent) at Rs 159 per share.
Who's Meeting Whom
- Tata Steel to meet Legal & General Investment Management on April 3
- Great Eastern Shipping to meet UTI MF, Pramerica and One Up Financial on April 3
Trading Tweaks
- Ircon International: ex-date for share split (from face value at Rs 10 to Rs 2 per share)
- Sadhna Nitrochem: ex-date for share split (from face value at Rs 5 to Rs 1 per share)
- Price Band Revised From 20 Percent To 10 Percent: Cholamandalam Financial Holdings, Blue Star
- Price Band Revised From 10 Percent To 5 Percent; Mangalam Organics, KRBL, Aavas Financiers, Finolex Cables, Indo Rama Synthetics, Himatsingka Seide
Insider Trading
- Sobha: Promoter Ravi Menon acquired 1.13 lakh shares between March 30-31
- GMR Infra: Promoter GMR Enterprises acquired 1 crore shares between March 26-30
- HFCL: Promoter Anant Nahata acquired 21.75 lakh shares on March 31
- NOCIL: Promoter Suremi Trading acquired 5 lakh shares between March 30-31
- Mahindra CIE Automotives: Promoter P.I.A. Dos acquired 1.25 lakh shares between March 30-31.
- JMC Projects: Promoter Kalpataru Power Transmission acquired 6.05 lakh shares on March 31
(As Reported On April 1)
F&O Cues
Index Futures
- Nifty April futures closed at 8,257.3, a premium of 3.5 points
- Nifty April futures Open Interest down 3 percent, shed 2.7 lakh shares.
- Nifty Bank April futures closed at 18,171.2, a discount of 37 points versus 8.5 points
- Nifty Bank April Futures Open Interest rises 0.4 percent, adds 3,900 shares
Options
- Nifty Put-Call Ratio at 1.25 versus 1.19 across all series.
Nifty Weekly Expiry: April 9
- Maximum Open Interest on Call Side at 12,000 strike (13.8 lakh shares)
- Maximum Open Interest on Put side at 8,000 strike (9.4 lakh shares)
- Open Interest addition seen in 12,000 Call (+13.2 lakh shares), 8,500 Call (+5.9 lakh shares), 8,000 Put (+5.5 lakh shares)
Nifty Monthly Expiry: April 30
- Maximum Open Interest on Call Side at 9,000 strike (15.1 lakh shares)
- Maximum Open interest on Put Side at 8,000 strike (21.4 lakh shares)
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