2019: Issue 696, Week: 12th - 16th August

A Weekly Update from SMC (For private circulation only)




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From The Desk Of Editor


n the week gone by, global markets came under pressure as investors’ worries rose I on account worsening trade tensions between U.S. and China. China allowed its currency to fall in response to the President Trump order to impose 10% tariffs on about $300 billion worth of Chinese goods wef. from 1st September 2019. Chinese stock markets tumbled to the lowest seen in five months after Washington designated Beijing a currency manipulator escalating its trade war. Japanese stock recovered during the week after data showed that the economic expansion for the quarter ending June 2019 came higher at 1.8 percent backed by higher consumer and government spending.

Back at home, on expected lines Reserve Bank of India (RBI) axed Repo rate but with a bit higher magnitude of 35 bps breaking convention of tinkering with 25 bps. RBI also increased the ceiling for a bank’s exposure to a single NBFC to 20% of its Tier I capital from 15% earlier. The move is expected to complement the announcement made by Finance Minister in the budget encourage public sector banks to buy high-rated pooled assets of up to Rs 1 trillion of financially sound NBFCs for which the government will provide one time six months' partial credit guarantee to PSBs for first loss of up to 10%. Indian stock markets recovered sharply during the end of the week as expectations rose that the Indian authorities would come out with some measures to soothe out concerns pertaining to surcharge on foreign portfolio investors. Also Finance Minister Meetings with various stakeholders during the week raised hopes among the market participants that the government would come out with measures to grapple with the slowdown that is being experienced by the industry in the wake of falling demand.

It was a historic week in which we saw big moves in many commodities owing to many political tensions amid some important economic releases. Overall CRB closed in negative as commodities reacted negative on US and China trade tensions though the downside was capped on better Chinese trade data. Gold saw massive move across the board but it was magical in India as sharp depreciation in INR added extra premium in it, made a new historical high of 38488. Gold(Oct) may trade higher and may test 39000 level in MCX while taking support near 36500 level while silver can test 45000 level while taking support near 41800 level. Base metal counter may trade on mixed path amid uncertainty regarding US China trade dispute. German ZEW Survey Expectations and GDP, Euro-Zone ZEW Survey and GDP, CPI, Retail Sales Advance and Retail Sales Advance of US, CPI of UK, Unemployment Rate of Australia, are few strong triggers in this week for commodities.

(Saurabh Jain)

SMC Global Securities Ltd. (hereinafter referred to as “SMC”) is a registered Member of National Stock Exchange of India Limited, Bombay Stock Exchange Limited and its associate is member of MCX stock Exchange Limited. It is also registered as a Depository Participant with CDSL and NSDL. Its associates merchant banker and Portfolio Manager are registered with SEBI and NBFC registered with RBI. It also has registration with AMFI as a Mutual Fund Distributor.

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SMC or its associates including its relatives/analyst do not hold any financial interest/beneficial ownership of more than 1% in the company covered by Analyst. SMC or its associates and relatives does not have any material conflict of interest. SMC or its associates/analyst has not received any compensation from the company covered by Analyst during the past twelve months. The subject company has not been a client of SMC during the past twelve months. SMC or its associates has not received any compensation or other benefits from the company covered by analyst or third party in connection with the research report. The Analyst has not served as an officer, director or employee of company covered by Analyst and SMC has not been engaged in market making activity of the company covered by Analyst.

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• RBI cutthe repo rate by 35 basis points to 5.40 percent and keptthe door open for lowering rates further by retaining an “accommodative” policy stance, but flagged worries over weakening growth prospects. This was the fourth repo rate cutin as many policies since February 2019.

Mining & Minerals

• NMDC will have SPVs with the governments of Jharkhand and Karnataka to set up steel factories. Its SPV in Jharkhand has already selected the site and applied for allocation of land, water and power. In Karnataka, NMDC says, it has acquired around 2,800 acres.

Oil & Gas

• Adani Enterprises Limited (AEL) has committed capital expenditure (capex) worth roughlyRs 10,000 crore forits airportbusiness tobe incurredoverthe next 7 years. AEL has also committed an investment of Rs 7,000 crore for coalandminingbusinessduringthecurrentfiscal2019-20.


• Maruti Suzuki India cut its production in July by 25.15 per cent, making it the sixth month in a row that the country's largest car maker reduced its output. The company produced a total of 1,33,625 units in July, compared with 1,78,533 units in the year-ago month.


• Aurobindo Pharma is confident of growth in the key US market despite recent hiccups on the regulatory front. The company said that it expected all-round growth in the US market with a significant expansion in the company's injectables portfolio going forward.

• Lupin has received an Establishment Inspection Report (EIR) from the US health regulator for its Aurangabad facility in Maharashtra. The facility was inspected by the US Food and Drug Administration (USFDA) between May 6-15, 2019.


• Indian Hotels Co plans to dispose of certain budget inns in the nation’s non-metro areas and lease them back for a fee. The chain, which operates New York’s The Pierre and St. James Court in the U.K., has been reducing debt in the past few years by selling assets including apartments purchased for Tata Group’s executives.


• Reliance Industries Ltd is partnering with iconic US-based luxury jeweller Tiffany & Co to open a line of stores in the country, adding yet another marquee name to its growing portfolio of brands. Tiffany, popular for its engagement rings and robin's egg blue boxes, plans to open stores in New Delhi and Mumbai in the second half of fiscal years 2019 and 2020 respectively.


• US jobless claims dipped to 209,000, a decrease of 8,000 from the previous week's revised level of 217,000. Economists had expected jobless claims to come in unchanged compared to the 215,000 originally reported for the previous week.

• US factory orders rose by 0.6 percent in June after tumbling by a downwardly revised 1.3 percent in May. Economists had expected factory orders to climb by 0.8 percent compared to the 0.7 percent drop originally reported for the previous month.

• US trade deficit narrowed slightly to $55.2 billion in June from a revised $55.3 billion in May. Economists had expected the deficitto narrowto $54.6 billionfromthe$55.5billionoriginallyreportedforthepreviousmonth.

• China's consumer price inflation rose to 2.8 percent in July from 2.7 percent in June, the National Bureau of Statistics reported. The rate was forecast to remain unchanged at 2.7 percent.

• Japan's gross domestic product gained a seasonally adjusted 0.4 percent on quarter in the second quarter of 2019. That beat expectations for an increase of 0.1 percent following the upwardly revised 0.7 percent gain in the previous three months (originally 0.6 percent).


Stocks *Closing Price Trend Date Trend Changed Rate Trend Changed SUPPORT RESISTANCE Closing S/l
S&P BSE SENSEX 37582 UP 08.02.19 36546 36300 35300
NIFTY50 11110 UP 08.02.19 10944 10900 10600
NIFTY IT 15821 UP 21.07.17 10712 15200 14800
NIFTY BANK 28432 UP 30.11.18 26863 27700 27000
ACC* 1575 DOWN 14.06.19 1549 - 1600
BHARTIAIRTEL 371 UP 15.03.19 338 345 335
BPCL 346 DOWN 12.07.19 346 370 380
CIPLA 485 DOWN 02.08.19 516 520 530
SBIN 291 DOWN 02.08.19 308 315 325
HINDALCO 176 DOWN 17.05.19 192 195 200
ICICI BANK 420 UP 02.11.18 355 400 390
INFOSYS 790 UP 14.12.18 706 730 710
ITC 254 DOWN 31.05.19 279 270 275
L&T 1365 DOWN 02.08.19 1370 1440 1470
MARUTI 6100 DOWN 26.04.19 6 6843 6100 6300
NTPC 124 UP 08.03.19 127 124 120
ONGC 131 DOWN 12.07.19 149 142 146
RELIANCE 1162 DOWN 26.07.19 1214 1250 1280
TATASTEEL 362 DOWN 10.05.19 487 400 410

*ACC has breached the resistance of 1570

Closing as on 09-08-2019


1) These levels should not be confused with the daily trend sheet, which is sent every morning by e-mail in the name of "Morning Mantra ".

2) Sometimes you will find the stop loss to be too far but if we change the stop loss once, we will find more strength coming into the stock. At the moment, the stop loss will be far as we are seeing the graphs on weekly basis and taking a long-term view and not a short-term view.


Meeting Date Company Purpose
12/8/2019 Century Textiles Quarterly Results
12/8/2019 Muthoot Finance Quarterly Results
12/8/2019 Bharti Infra. Interim Dividend
13/08/2019 Reliance Infra. Quarterly Results
13/08/2019 Apollo Hospitals Quarterly Results
13/08/2019 Sun Pharma.Inds. Quarterly Results
13/08/2019 O N G C Quarterly Results
13/08/2019 Manappuram Fin. Quarterly Results,Interim Dividend
13/08/2019 Coal India Quarterly Results
13/08/2019 Power Fin.Corpn Quarterly Results
14/08/2019 Grasim Inds Quarterly Results
14/08/2019 IDBI Bank Quarterly Results
14/08/2019 Jindal Stee Quarterly Results
14/08/2019 Indraprastha Gas Quarterly Results
14/08/2019 GMR Infra. Quarterly Results
Ex-Date Company Purpose
13/08/2019 NTPC 25% Final Dividend
14/08/2019 HindalcoInds. 120% Final Dividend
14/08/2019 Maruti Suzuki 1600% Final Dividend
14/08/2019 HCLTechnologies 100% 2nd Interim Dividend
14/08/2019 Divi's Lab. 800% Final Dividend
16/08/2019 LIC Housing Fin. 380% Dividend
19/08/2019 Power Grid Corpn 25% Final Dividend
19/08/2019 Container Corpn. 171% Final Dividend
19/08/2019 Petronet LNG 45% Final Dividend
19/08/2019 PIndiabullsHous. 400% Interim Dividend
20/08/2019 Bharat Electron 170% Final Dividend
20/08/2019 Sun Pharma.Inds. 275% Dividend
21/08/2019 B P C L 80% Final Dividend
21/08/2019 I O C L 10% Final Dividend
22/08/2019 O N G C 15% Final Dividend





Beat the street - Fundamental Analysis



Target Price:650



Face Value (Rs.) 2.00
52 Week High/Low 586.80/387.60
M.Cap (Rs. in Cr.) 24657.20
EPS (Rs.) 49.02
P/E Ratio (times) 9.97
P/B Ratio (times) 1.52
Stock Exchange BSE


Investment Rationale

• LIC Housing Finance, backed by Life Insurance Corporation of India is one of the largest housing finance companies in India, having one of the widest networks of offices across the country.

• In the quarter ended June 30, 2019, total disbursements were Rs 10261 cr as against Rs 9594 cr for the corresponding period in the previous year registering a growth of 7%. Out of that, disbursements in the individual home loan segment was Rs 7871 cr against Rs 7260 cr, whereas total disbursements in project loans were Rs 829 cr as against Rs 889 crfor quarter ended June 30, 2018.

• The total loan portfolio stood at Rs 197768 cr as against Rs 169866 cr a growth of 16%. The Individual loan portfolio stood at Rs 184155 cr as against Rs 161467cr, showcasing a growth of 14%. Out of that home loan portfolio registered a growth of 12.4%.Developer loan portfolio stood at Rs 13614 cr as on June 30, 2019 as against Rs 8399 cr as on June 30, 2018.

• The company's total revenues from its operation increased to Rs 4,815.57 crore for Q1 FY20 as compared to Rs 4,068.93 crore YoY, while the net interest income for Q1 FY20 came in at Rs 1181 cr, as against Rs 1008 cr YoY, registering a growth of 17%. Net profit after tax stood at Rs. 610.68 cr as compared to Rs. 567.94 cr during the same period previous year registering a growth of 8%. • Net Interest margins for Q1 ended June 30, 2019 stood at 2.35% as against 2.32% during the same period previous year. Exposure at Default (EAD)

Stage 3 stood at 1.98% as against 1.54% as on 31st March, 2019. Consequently, the provisions for Expected Credit Losses stood at Rs 253.33cr for the quarter as against Rs 160.96 cr YoY.


• Regulatory changes to lending and borrowing norms

• Asset Liability mismanagement in shorter tenure Valuation

The business environment continues to be quite challenging. However, the company’s outstanding loan book grew consistently, especially on the home loan segment. The company has also performed quite well in the affordable segment. The company is focusing on asset quality and recovery aspect and the management is confident of addressing the situation in the current year. Thus it is expected that the stock will see a price target of Rs. 650 in 8-10 Months time frame on one year average PB multiple of 1.81 times its FY20E BVPS of 359.28.



Target Price:4192



Face Value (Rs.) 10.00
52 Week High/Low 4160.00/2830.00
M.Cap (Rs. in Cr.) 10672.26
EPS (Rs.) 145.15
P/E Ratio (times) 24.79
P/B Ratio (times) 3.94
P/BDividend Yield (%) 0.42
Stock Exchange BSE


Investment Rationale

• It is leading manufacturer for key protection and performance chemicals.The company has planned for capex of Rs. 400 crore, which is expected to be completed by second half of current financial year. Capex includes 30% expansion in aromatic compound, para-Cresolwhereithas40%market share.

• On the development front, the company recently expanded its phosgene capacity by five times and is now working towards vertical integration of the phosgene value chain.The management has approved a caustic-chlorine project which will supply chlorine usedinthemanufactureofphosgene.

• The main userindustries, namelyAgriculture and Crop ProtectionChemicals, are growingwell because ofthe need to feed a growing population under constraints of related resources. The Company will participate in this growth by building a strong sales and marketing organisation and broadening and deepening its presence in other countries, particularly inAfrica and South America, promoting its brand sales, improving its manufacturing and working capital efficiencies, generating and adding capacities and introducing new productsandformulations.

• Atul Ltd. and AkzoNobel are entering into a partnership agreement with regards to production of monochloro acetic acid (MCA), at its plant in Gujarat with capacity of 60,000 metric tonne per annum (MTPA). Global Market Insights, Inc., claims monochloroacetic acid market to surpass a revenue of USD 1.2 billion by 2024, with a projected CAGR of 4% over 2017-2024.

• During Q1FY20, it has reported good numbers

despite growth headwinds prevailing for the sector and economy. Its consolidated revenue grew by 14% driven by double digit growth for both life science and specialty chemical. Margin improved due to lower expenses.


• Slowdown in domestic and international demand for end-markets

Currency fluctuation


The company has repaid its entire fund-based debt and strengthening of its leverage as reflected by improvement in its overall gearing (including acceptances). Moreoverit had strong liquidity indicators marked by healthy current ratio, negligible working capital limit utilization and has adequate capacity to meet this improving demand. Thus, it is expected that the stock will see a price target of Rs.4192 in 8 to 10 months time frame on a five year average P/Ex of 23.71x andFY20earningsofRs.176.81.

Source: Company Website Reuters Capitaline

Above calls are recommended with a time horizon of 8 to 10 months.



Beat the Street-Technical Analysis


The stock closed at Rs 1351.75 on 09th August, 2019. It made a 52-week low of Rs 895 on 09th October 2018 and a 52-week high of Rs. 1358.65 on 09th Aug 2019. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 1176.21.

As we can see on chart that stock is trading in higher highs and higher lows sort of “Rising Wedge” on weekly charts, which is bullish in nature. It has given the breakout of pattern and also has managed to close above the same along with high volume so buying momentum can continue for coming days. Therefore, one can buy in the range of 1320-1330 levels for the upside target of 1420-1450 levels with SL below 1270.


The stock closed at Rs 265.50 on 09th August, 2019. It made a 52-week low at Rs 177.05 on 11th February 2019 and a 52-week high of Rs. 277.40 on 27th June 2019. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 233.51.

Short term, medium term and long term bias are looking positive for the stock as it is forming an “Inverted Head and Shoulder” pattern on weekly charts, which is bullish in nature. Apart from this, it is comfortably trading above 200DEMA on daily charts which also gives positive outlook for coming days. Therefore, one can buy in the range of 260-262 levels for the upside target of 280-284 levels with SL below 252.




Nifty indices bounced back sharply from its key support levels of 10800, and ended the week above 11100 levels on back of sharp short covering. Hefty call unwinding at 10900 & 11000 call strike was observed along with fresh put writing which supported the up move in the week gone by. The Implied Volatility (IV) of calls was up and closed at 14.39% while that for put options closed at 15.07%. The Nifty VIX for the week closed at 16.09% and is expected to remain volatile. PCR OI for the week closed at 1.12, which indicates OTM put writing. Now, in coming week, we expect Nifty to trade with sideways bias along some volatility on cards as we have limited trading sessions. On higher side, 11200 will act as key resistance for Nifty while on downside, 11000 should act as a strong support. From technical front, 28750-28800 levels should as key supply zone for Bank Nifty as long term moving averages are placed over there.














**The highest call open interest acts as resistance and highest put open interest acts as support.

# Price rise with rise in open interest suggests long buildup | Price fall with rise in open interest suggests short buildup

# Price fall with fall in open interest suggests long unwinding | Price rise with fall in open interest suggests short covering




This week,turmeric futures (Sept) may show an upside momentum towards 7100 levels, taking support near 6700-6750 levels. The correction phase in this commodity mighttake a pause as the spot are stabilizing on the reports of heavy rains in Sangli,the major-growing districtin Maharashtra may have damaged the crop. The flood situation in parts Sangli continues to be critical with increasing discharge from all the dams. The Krishna and Bhima river basins have received 300% rainfall above average in just 10 days, as a result of which 32 of 38 dams in the region are full,resulting in floods in Kolhapur and Sangli. Jeera futures (Sept) is expected to give respectto 17100 & gain to test 17700-17800 levels. Looking at revivals of monsoon & overflowing dams across the country damaging the crops, the market participants are closely keeping a watch over the Narmada Dam in the state of Gujarat. It is reported that the water level in Sardar Sarovar Dam over Narmada has increased to 129.65 meters,the highestin lasttwo years, with an inflow of 6 lakh cusecs. The level has been on the rise for the past 15 days following good rainfall in the catchment areas. Dhaniya futures (Sept) is likely to trade with an upside bias & recovertowards 6200-6300,taking support near 5925 levels. Lower arrivals & stockiestlooking for bargain buying may liftthe prices on the spot markets as well during the day’s ahead. Cardamom futures (Aug) is expected to trade in the broader range of 3390-3840 with an upside bias. The delay in the new crop and the likely shortage may increase the prices further in the coming days.


Bullion counter may continue to extend its swift rally upside amid safe haven buying amid monetary easing by central banks and concerns of slowing global growth increased coupled with fresh concerns about the U.S.-China trade dispute. Gold continued to rise to its highest level breaching the level of $1500 on COMEX first time in six years and crossed lift time high of 38000 in MCX. All the major central banks are getting dovish and are ready to cut their interest rates. Central banks in New Zealand, Thailand and India stunned financial markets with a series of surprising interest rate cuts last week. Gold(Oct) can trade higher and can test 39000 level in MCX while taking support near 36500 level while silver can test 45000 level while taking support near 41800 level. US President continued his accusations on Fed by saying that everyone around is ready to cut rates and Fed is taking their own time to make any changes, this continued tussle is an added benefit to gold. Trade tensions between the United States and China further escalated after a report that Washington is delaying a decision about licenses for U.S. firms to restart trade with Huawei Technologies. Market participants are seen building bets that the U.S. central bank will cut rates three more times by year-end, according to the CME FedWatch tool. Policymakers at the Fed are next scheduled to discuss monetary policy settings in mid-September, with two more meetings to follow in October and December.


Soybean futures (Sept) is likely to recover towards 3800, maintaining support near 3650 levels. This oilseed will be tracking gains of the U.S soybean, falling prey to weather disturbances in key growing regions due to rains, posing a threat on the standing crop. Late planting of the crop in the US this year due to excess rains and flooding in the Midwest is likely to hurt yields. The market participants would be closelywatching theUSDA'snext set of cropestimates tobepublishedonMondayby USDA as well as the season-average price forecasts on Thursday. These reports are likely to provide a short-term focus amid widely differing market assessments of this year's crop estimates. Following the footsteps, any increase in US soybean prices could push up the edible oil prices globally. Additionally, there is news that China is planning to remove soybean oil, rapeseed oil and palm oil from its import tariff quota management. Giving a positive reaction, Malaysian palm oil futures is trading near three-month high & more upside is likely to happen. Referring to the above fundamentals, soy oil futures (Sept) as well as CPO futures (Aug) are looking bullish to test 760 & 555 respectively. Mustard futures (Sept) may underperform in the oilseeds pack & trade sideways to down in the range of 3900-3400. The reason being is thatthe demand from millers is slowing down amid negative crush margin. Since the beginning ofthis year,the crushing figure has come down from 9.50 lakhs MTto5.25lakhsMTinthemonthof July.Thetotal stockswithfarmers,Govt.onMSP (NAFED & HAFED), processors as well as with stockiestis estimated to be 43.25 lakh tons.


Crude oil prices may witness volatile movement as one the side it is supported by expectations of more production cuts by OPEC but U.S.-China trade row could lead to a global slowdown, curbing demand for crude. Crude oil may take support near 3500 levels while taking resistance near 4100 levels. Saudi Arabia, the world’s biggest oil exporter, had called other producers to discuss the recent slide in crude prices as oil prices have still lost more than 20% from their peaks reached in April. Saudi Arabia, de facto leader of the Organization of Petroleum Exporting Countries (OPEC), planned to maintain its crude oil exports below 7 million barrels per day in August and September to bring the market back to balance and help absorb global oil inventories, a Saudi oil official stated recently. Crude production grew 100,000 bpd to 12.3 million bpd, just under its weekly record high at 12.4 million hit in May. In EIA ShortTerm report it forecast U.S. crude oil production to average 12.3 Mb/d in 2019 and 13.3 Mb/d in 2020, both of which would be at record levels. Natural gas may under selling pressure as it can test 140 while taking resistance near 160. U.S. gas futures recently collapsed to a three-year low, while spot prices were on track to post their weakest summer in over 20 years. The weather is expected to be cooler than normal in the east coast and mid-west over the next 8-14 days which should reduce cooling demand during the heart of the summer.


Cotton futures (Aug) is likely to see 20600-20800 on the higher side if trades & sustains above 20300 levels. On the ICE, cotton may recover towards 62 cents per pound helped by a positive export sales data. The catalyst for this rally is China could be China for the new crop. The country may not buy a lot of cotton, but the psychology of having China in the market buying U.S. cotton during this crisis period of trade war may prove to be price friendly. On a cautious note, the market participants would be cautious ahead of the release of the U.S. Department of Agriculture's (USDA) monthly World Agriculture Supply and Demand Estimates (WASDE) report, due on August 12 & weekly export sales on August 15. Guar seed futures (Sept) is expected to stay above the strong support zone near 4320, while guar gum may hold on to 8400 levels. These duos are likely to trade with a strong upside bias in days to come towards 4500 & 8810-8985 levels. The market participants have a reason to cheer with Argentina recently approving phyto-sanitary protocol to allow import of the commodity from India. Guar gum will help Argentine oil and gas industry replace sand water during drilling of shale oil wells. Castor seed futures (Sept) may trade with a bullish bias & test 5760, taking support near 5625 levels. The overall sentiment remains bullish due to a fall in acreage of the oilseed. As of Aug 8, area under castor in the country was at 1.89 lakh hectares ha, as compared to 2.43 lakh hectares last year, according to farm ministry data. In the major markets of Gujarat, there is robust demand from domestic stockists and oil millers.


Base metal counter can trade on mixed path amid uncertainty regarding US China trade dispute. Copper may find support near 435 levels while facing resistance near 455 levels. LME Copper stocks have more than doubled this year to 277,975 tonnes and those in ShFE warehouses have risen 40% to 155,971 tonnes. Imports of copper ores and concentrates surged 41% to 2.074 million tonnes in July, the highest on record. Meanwhile, Lead may recover towards 160 while taking support near 150 levels. Zinc may remain on weaker side as it can test 180 levels while taking resistance near 188 levels. The zinc market was in deficit by 123,000 tonnes over the first five months of the year, according to the ILZSG. January-May zinc mine production hit 5.27 million tons, up 1.4% from 5.20 million tonnes during the equivalent five-month period in 2018. Nickel prices can move with sideways to upside bias as it can move in rage of 1080-1180 levels. Indonesia relaxed a ban on ore exports in 2017, but said at the time the moratorium would last only five years and that export would be restricted again in 2022. Indonesia's nickel miners association (APNI) urged the government not to bring forward a ban on raw mineral exports from 2022. Aluminium can trade with weak bias as it can take test 138 levels while facing resistance near 145 levels. Russian aluminium giant Rusal stated that lifting the share of high value-added products in its sales might prove to be tough in coming months due to the weaker market for the metal.





COPPER MCX (AUG) contract closed at Rs. 442.75 on 8th Aug’19. The contract made its high of Rs. 464.65 on 29th Jul’19 and a low of Rs. 432.30 on 5th Aug’19. The 18-day Exponential Moving Average of the commodity is currently at Rs. 436.67. On the daily chart, the commodity has Relative Strength Index (14-day) value of 53.035.

One can buy between Rs. 436-438 for a target of Rs. 455 with the stop loss of Rs. 429.

TURMERIC NCDEX (SEP) contract closed at Rs. 6694.00 on 8th Aug’19. The contract made its high of Rs. 7288.00 on 16th Jul’19 and a low of Rs. 6546.00 on 5th Aug’19. The 18-day Exponential Moving Average of the commodity is currently at Rs. 6948.30. On the daily chart, the commodity has Relative Strength Index (14-day) value of 52.000.

One can buy near Rs. 6750 for a target of Rs. 7200 with the stop loss of Rs. 6525.

DHANIYA NCDEX (SEP) contract was closed at Rs. 6014.00 on 08th Aug’19. The contract made its high of Rs. 7397.00 on 16th Jul’19 and a low of Rs. 5902.00 on 07th Jul’19. The 18-day Exponential Moving Average of the commodity is currently at Rs. 6900.00. On the daily chart, the commodity has Relative Strength Index (14-day) value of 30.114.

One can buy near Rs. 6050 for a target of Rs. 6350 with the stop loss of Rs 5900.




• SEBI has directed all stock exchanges dealing in commodity derivatives to set up a product advisory committee for each group or complex of commodities, to be represented by value chain participants.

• The daily turnover in bullion derivatives on the MCX hit a one-month high of 187.97 bln rupees on 5th August as gold hit a new high in the domestic market amid growing economic and geopolitical tensions.

• Since Jun 1, the country has received 512.0 mm rainfall, 2% below the normal weighted average of 525.1 mm, according to the IMD data.

• The water level in India's 91 key reservoirs was nearly 42% higher on week at 76.845 bcm today, according to data released by the Central Water Commission.

• OPEC’s seaborne crude exports nosedived last month, returning to May levels after a small rebound in June.

• Russian aluminium producer Rusal suspended operations at its Achinsk alumina plant and evacuated all but essential staff after a fire broke out a nearby Russian military base.

• U.S. oil output is expected to rise 1.28 million barrels per day to 12.27 million bpd this year, the U.S. Energy Information Administration stated.


It was the historic week; big moves in many commodities were seen owing to many political tensions amid some important economic releases. Overall CRB closed in negative as commodities reacted negative on US and China trade tensions though the downside was capped on better Chinese trade data’s. Oil prices tumbled up to 5% on Wednesday to a fresh sevenmonth low, on an unexpected build in US crude stockpiles and fears of lower crude demand due to deepening US-China trade tensions. US crude stockpiles rose last week by 2.4 million barrels, US crude oil inventories are about 2% above the five-year average for this time of year. On Thursday prices revived from lower levels due to expectations that falling prices may lead to production cuts. Reports that Saudi Arabia, the world's biggest oil exporter, had called other producers to discuss the slide in oil prices might also have supported the market. Brent has plunged more than 12% after additional tariff to China news by US. Natural gas tried to make a base near 149 levels and saw pause in the fall after a decline of three weeks. Gold saw massive move in across the board but it was magical in India as sharp depreciation in INR added extra premium in it. It made a new historical high of 38488. Gold soared more than 2% on Wednesday to breach the $1,500 ceiling for the first time in over six years as investors rushed to safe havens, spooked by a host of uncertainties including U.S.-China trade and a slowing global economy. Other precious metals also caught the rally and silver broke the level of $17 in COMEX. Base metals saw some revival except zinc which continued its downward trend. Some revival in export import data of China also cushioned up base metals prices amid some fall in dollar index.

It was a good week for soyabean, refined soya and crude palm oil; all of them saw good revival tracking a steep rise in Chicago soybeans, on worries that forecasts for dry weather in the U.S. Midwest could harm the soybean crop. Mustard noticed some weakness though the spot prices of mustard are showing a steady to firm trends due to improved demand from local crushers. In spices, it was only turmeric which showed some strong moves, other spices traded weak. The sentiments of jeera dampened because of high moisture content in the spice, due to rainfall in the key producing areas of Gujarat. It is being anticipated that this winter crop will be good this year as rains are just as farmers wanted







SPOT PRICES (% change)

Brent Crude...........Fuel of Growth

Crude oil , the world’s most important energy, is the most reliable indicator of global growth. So the smooth availability of oil and its prices play an importantrole in industrial and economic development. Crude oil is also an essential raw material for manufacturing plastics and also used in cosmetics, fertilisers, detergents, paints and medicines. There are different types of crude oil. The most important type of crude oil used in Europe is Brent Crude.Here we talk about brent crude oil as the leading exchange of India, NSE, has launched trading in brent crude oil a few months back. India is the 3rd largest consumer of crude oil in the world, afterUnited States and China.

Brent Crude as a benchmark pricing

The Brent Crude is extracted from the North Sea and its prices serves as a benchmark price for purchases of oil worldwide. Brent crude oil, classified as sweet light crude, has relatively low sulfur content and a relatively high gravity on the American Petroleum Institute’s standard scale. The lower the sulfur contents the easier and cheaper it is to refine into various products. Therefore, they tend to fetch higher prices on commodity markets. This large North Sea Brent crude deposit is bounded by the United Kingdom, Norway, the Netherlands, Germany, France, Denmark, and Belgium. The pricing mechanism for Brent dictates the value for roughly two-thirds of the world's crude oil production. OPEC, a group of 14 of the most powerful oil exporting countries, uses Brent as their pricing benchmark.

Factors affecting Crude prices recently

Recently Crude oil prices traded negatively despite central banks like U.S., India, New Zealand and Thailand cut their interest rates. The oil market took the rate cuts as just another sign that global oil demand will fall as markets are worried that the demand side of the oil trade will take a hit from tariffs and a slowdown in world economies. Generally, global central bank easing is not bearish for oil, however bullish. Even during the 2008 recession, rate cuts and the Fed’s quantitative easing provided one of the biggest oil price rebounds in history. The market is even ignoring the data from the different sources that suggests that U.S. oil supplies are falling at the fastest pace in years. The API reported U.S. crude supply recently fell by 3.43 million barrels, which is the eighth crude draw in a row, the longest stretch of supply drops since January of 2018. The brewing Sino-U.S. trade war is weighing on global growth and could further dampen demand-of oil this year.



The market is also not taking notice of sanctions against Iran. However, tensions in the Middle East remain high after Iran seized a number of tankers in recent weeks in the Strait of Hormuz, a major chokepoint for oil shipments. The deeper production cuts at leading producer Saudi Arabia, lower output at sanctions -hit Iran, and outages in Libyaand Venezuela sent OPEC’s crude oil production in July falling to its lowest level since 2011.




Currency Table

News Flows of last week

5th AUG Centre scrapped Article 370, bifurcated J&K into two Union Territories.
5th AUG China retaliated to Trump’s new tariffs, suspended imports of agricultural products.
6th AUG RBI should borrow only long term fund from overseas market – Bimal Jalan.
7th AUG RBI cut repo rate to nine-year lows by 35 bps.

Market Stance

Indian Rupee fell sharply over 1.5 % this week against US dollarlaid by ripple effect of Chinese renminbi, which fell below 7.00 to a dollar mark; it was recorded the lowest level seen since global financial crisis in 2008. The weakness in both onshore/offshore yaun hitthe entire financial markets which emerged from the extended trade tensions between US and China. To recap, three and half years ago when China de-valued its own currency to help factories owners/exporters for betterrealization back-fired the entire financial markets amid capital flight from China and emerging nations. After one year China spent over 500bn USD from its giant FX reserves to pump-up renminbi to bring financial stability. Additionally this week RBI slashed repo rate which was widely expected but by 35 bps and not 25 bps, although market priced-in of such unconventional quantum cuts as far as monetary easing is concerned.Additionally RBI revised down growth rate projection of 6.9% for FY20 against expectations of 6.5% for the same fiscal which is hardly 10 bps lower than what market participants assumed which may bring modest caution for further easing from RBI. Meanwhile Indian yield curve lifted to steepen as longer duration positions in bonds are expecting floorin rate cut phase. Recently Indian Rupee reversed some of its losses after reports unfolded that government is planning to exempt FPI from an increase in taxes that was announced in budget speech by FM Nirmala Sitharaman.

USDINR is likely to stay within the range of 70.80 and 70.10 in the next week

Economic gauge for the next week

Technical Recommendation

USD/INR (AUG) contract closed at 70.8025 on 8th Aug’19. The contract made its high of 71.2925 on 7th Aug’19 and a low of 70.1550 on 5th Aug’19 (Weekly Basis). The 14-day Exponential Moving Average of the USD/INR is currently at 69.95

On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 70.82. One can sell at 70.80 for the target of 70.20 with the stop loss of 71.10.

EUR/INR (AUG) contract closed at 79.3725 on 8th Aug’19. The contract made its high of 80.13 on 6th Aug’19 and a low of 78.2150 on 5th Aug’19 (Weekly Basis). The 14-day Exponential Moving Average of the EUR/INR is currently at 78.30

On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 63.61. One can sell at 79.45 for a target of 78.85 with the stop loss of 79.75.

GBP/INR (AUG) contract closed at 86.0375 on 8th Aug’19. The contract made its high of 86.7575 on 6th Aug’19 and a low of 85 on 5th Aug’19 (Weekly Basis). The 14- day Exponential Moving Average of the GBP/INR is currently at 85.81

On the daily chart, GBP/INR has Relative Strength Index (14-day) value of 47.23. One can sell at 86.10 for a target of 85.30 with the stop loss of 86.50.

JPY/INR (AUG) contract closed at 66.8375 on 8th Aug’19. The contract made its high of 67.20 on 7th Aug’19 and a low of 66.0450 on 6th Aug’19 (Weekly Basis). The 14-day Exponential Moving Average of the JPY/INR is currently at 65.31

On the daily chart, JPY/INR has Relative Strength Index (14-day) value of 75.37. One can sell at 66.80 for a target of 66.20 with the stop loss of 67.10




'Hints of LIC's entry in the markets a positive step by the government'

With the Government moving towards disinvestment in the public sector units (PSUs), many are looking forward to grab this opportunity in various industries. One of the proposed agendas of the Modi Government 2.0 is to do aggressive fund-raising by means of disinvestment with a target of Rs 1.05 lakh crore in the current fiscal year. ‘Insurance Industry Behemoth’, Life Insurance Corporation of India (LIC), which holds 74 percent of the market share in the month of June is thinking of coming up with an IPO as per the current talks in the government. Former Finance Minister, Arun Jaitley, said that Life Insurance Corporation of India would perhaps be the country's most valuable company if it were listed on the stock exchanges as it has maintained its market leadership despite the constraints of functioning of state-run companies. LIC is the largest investor in the nation's growth, with over Rs 4 lakh crore in investments in key sectors of the economy. Insurance Regulatory Development Authority of India (IRDAI) is the regulatory body for all the insurance companies in India including LIC but apart from IRDAI, the company is also governed by the LIC Act.

Sterling and Wilson Solar closes IPO with 92% subscription

Sterling & Wilson Solar successfully closed its IPO on August 8, backed by marquee global institutional investors. Overall the issue was subscribed 92 percent, including anchor investors portion.. The initial public offer has been subscribed 85 percent as the Rs 3,125-crore IPO has received bids for 1.89 crore equity shares against the total offer size of 2.21 crore shares (excluding anchor investors' portion), as per data available on NSE. The reserved category for qualified institutional buyers (QIBs) subscribed 1.02 times while non-institutional investors saw 89 percent subscription and retail individual investors 29 percent. Due to the recent market conditions and changes in the application process, the retail portion was not fully subscribed, sources said. The issue, which was opened for subscription on August 6, comprised an offer for sale by promoters Shapoorji Pallonji (Rs 2,083.33 crore) and Khurshed Yazdi Daruvala (Rs 1,041.67 crore). Sterling and Wilson Solar, on August 5, raised Rs 1,406 crore from anchor investors. The price band was fixed at Rs 775-780 per share. The promoters will utilise a portion of issue proceeds towards funding full repayment of the loans. Shares of Sterling and Wilson, a solar engineering, procurement and construction solutions provider, are proposed to be listed on the BSE and the NSE.

Affle India shares mark remarkable debut, closes with 17.5% premium

Shares of mobile marketing company Affle India, on August 8, zoomed nearly 17.5 percent in its debut trade against the issue price of Rs 745. The scrip made a robust debut as it opened the day at Rs 929.90, a huge gain of 24.81 percent from its issue price on the BSE. During the day, it rallied 28.63 percent to Rs 958.30. It finally closed 17.46 percent higher at Rs 875.10. In terms of the traded volume, 8.62 lakh shares were traded on the BSE and over 83 lakh units on the NSE during the day. The company's market valuation was at Rs 2,231.19 crore on the BSE. The Rs 459-crore initial public offer of Affle India was a huge hit among investors as it was subscribed 86.49 times last week. Price range for the offer was fixed at Rs 740-745 per share. ICICI Securities and Nomura Financial Advisory and Securities (India) Pvt Ltd were the managers to the offer.





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AMFI monthly report: Credit risk funds continue to bleed in July; equity fund inflows up 6.7% MoM

The 44-player mutual fund industry witnessed a whopping Rs 3,411 crore worth of outflows from credit risk funds for the fourth consecutive month in July. Credit risk funds recorded outflows of Rs 2,695 crore in June, according to data released by the Association of Mutual Funds in India (AMFI). Under the income/debt-oriented schemes, another category that saw a significant drop was medium-duration funds that registered outflows of Rs 956 crore in July. On the other hand, in the same category, liquid funds which are used by companies to park surplus cash witnessed inflows of Rs 45,441 in July compared to outflows Rs 1.52 lakh crore in June. After six months of outflows, balanced funds category saw inflows of Rs 674 crore in July. This category had witnessed outflows of Rs 1,910 crore in June. Equity funds saw inflows of Rs 8,092 crore in July, up 6.7 percent month-onmonth. Overall, the industry witnessed inflows of Rs 87,087.71 crore in July and the AUM of the industry stood at Rs 24.53 lakh crore.

SEBI wants MFs to invest only in listed securities; exposure to unrated debt to be capped at 5%

With an aim to safeguard mutualfund investors from high-risk assets,regulator SEBI wants fund houses to shift alltheirinvestments to listed orto-be-listed equity and debt securities in a phased manner and reduce their exposure to unrated debtinstruments from 25 percentto only 5 percent. Exposure to risky debt securities has emerged as a majorrisk forthe capital marketinvestors, including those coming through the mutual fund space, and the regulator has been making efforts to enhance its regulatory safety net against such risks. Taking forward certain decisions approved by SEBI's board earlier in June, the regulator has now finalised the draft amendments to the prudential norms for mutualfund schemes forinvestmentin debt and money marketinstruments.

Aditya Birla Sun Life, Franklin Templeton funded Amaravati project via investor inflows into Mfs

Amid questions being raised on the future of the $715-million Amaravati Sustainable Infrastructure and Institutional Development Project, data from Mutual Funds India reveals that two big asset management companies (AMCs) -- Franklin Templeton Asset Management (India) Pvt and Aditya Birla Sun Life Asset Management Co (ABSL) -- have invested around Rs 1,300 crore in these bonds as of June-end. Amaravati Bonds 2018 were issued by the Andhra Pradesh government's nodal agency -- Capital Region Development Authority (CRDA). These 10-year bonds had a five-year moratorium clause, or the waiting period beforeprincipalrepayments start.With guarantee fromthe state government anda low-risk rating fromagencies,thedebtinstrumentwas oversubscribed1.53 times, raising Rs 2,000 crore for the project. CRISIL, Brickwork Ratings and Acuité Ratings & Research had rated the bonds as A+(SO), AA-(SO) and AA-(SO), respectively,withstableoutlook.Now,mutualfundswillbeunabletoredeemtheprincipalamountbecauseofthefive-yearmoratoriumperiod.


  • Scheme Name
  • Fund Type
  • Fund Class
  • Opens on
  • Closes on
  • Investment Objective
  • Min. Investment
  • Fund Manager
  • Yes Overnight Fund - Regular Plan (G)
  • Open-Ended
  • Growth
  • 19-Aug-2019
  • 20-Aug-2019
  • To generate returns commensurate with low risk and providing high level of liquidity, through investments made in overnight securities having maturity of 1 business day.
  • Rs.10000/-
  • Piyush Baranwal
  • Scheme Name
  • Fund Type
  • Fund Class
  • Opens on
  • Closes on
  • Investment Objective
  • Min. Investment
  • Fund Manager
  • DHFLPramerica Overnight Fund - Regular Plan (G)
  • Open-Ended
  • Growth
  • 12-Aug-2019
  • 26-Aug-2019
  • To provide reasonable returns commensurate with low risk and providing a high level of liquidity, through investments made primarily in overnight securities having maturity of 1 business day.
  • Rs.5000/-
  • Kumaresh Ramakrishnan / Kunal Jain
  • Scheme Name
  • Fund Type
  • Fund Class
  • Opens on
  • Closes on
  • Investment Objective
  • Min. Investment
  • Fund Manager
  • BNP Paribas Global Innovative Technology Fund - Regular Plan (G)
  • Open-Ended
  • Growth
  • 16-Aug-2019
  • 30-Aug-2019
  • The scheme seek capital appreciation by investing predominantly in units of Parvest Disruptive Technology Fund.

  • Rs.5000/-
  • Karthikraj Lakshmanan / Abhijeet Dey
  • Scheme Name
  • Fund Type
  • Fund Class
  • Opens on
  • Closes on
  • Investment Objective
  • Min. Investment
  • Fund Manager
  • ITI Long Term Equity Fund - Regular Plan (G)
  • Open-Ended
  • Growth
  • 15-Jul-2019
  • 14-Oct-2019
  • The Scheme seeks to provide long-term capital appreciation by investing predominantly in equity and equity related securities.
  • Rs.5000/-
  • Pradeep Gokhale / George Heber Joseph


Performance Charts

EQUITY (Diversified)
TAX Fund
Due to their inherent short term nature, Short term funds have been sorted on the basis of 6month returns

Note:Indicative corpus are including Growth & Dividend option . The above mentioned data is on the basis of 08/08/2019 Beta, Sharpe and Standard Deviation are calculated on the basis of period: 1 year, frequency: Weekly Friday, RF: 7%

*Mutual Fund investments are subject to market risks, read all scheme related documents carefully


Mr. S C Aggarwal (CMD, SMC Group), Mr. Mahesh C Gupta (Vice CMD, SMC Group) & other key directors along with SMC Employees celebrating “MCX Gold august contracts highest delivery of 5158 kg since inception out of which more than 98% (5150 kg) is contributed by SMC “ on 06th August, 2019 at SMC Head Office, New Delhi

Hair Check Up Camp organised by SMC for employees in association with Richfeel to rejuvenate held on 2nd & 3rd August at SMC Head Office, New Delhi.

Mr. M K Gupta (Senior Vice President- Head Distribution, SMC Global Securities Ltd.) & Mr. Sushil Kumar Joshi (Vice President- Distribution, SMC Global Securities Ltd.)inaugurating SMC's new branch at Nashik, Maharashtra on Thursday, 25th July, 2019.

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