lobal markets saw declines as investors were cautious after U.S. President Gsaid that he may raise tariff on another $325 billion of Chinese goods by the end of this month. To alleviate growth concerns as a consequence of trade war, central bankers including U.S. Federal Reserve and European Central Bankindicated to easier policies in response to deterioration in outlook. Expectations of rate cut by U.S. is continuously rising and global monetary policy seems to be on the loosening side just after when some of central bankers showed their intent to shift away from the policies initiated in the past decade. Japan saw contraction in exports for the consecutive fifth month adding pressure on central bank.
Back at home, to give a boost to the sagging economy, the Reserve Bank of India (RBI) has lowered its repo rate to a nearly nine-year low of 5.75 percent and changed its monetary policy stance to accommodative, leaving space for future rate cuts. However market closed the week on a flat note as the RBI did not make any announcement to tackle liquidity stress facing by NBFC. Furthermore, the sentiment soured on the back of weak global cues. The fall witnessed in crude prices as a consequence of sharp deterioration in demand outlook and rise in U.S. inventories is expected to be positive for Indian markets in the sense that it would ease out pressure on external trade, fiscal pressure and last but not the least fuel induced inflationary pressures. Going forward market will keep close eye on the outcome of FED meeting, which is scheduled next with amid inflation and IIP data from home. Besides crude oil prices, foreign fund inflow and outflow, progress of monsoon will be closely watched.
On the commodity market front, there was a prominent turnaround in trend of commodities in the month of May. S&P GSCI was down 8.2% for the month but remained up 8.5% YTD. Dow Jones Commodity Index was down only by 3.6% in May, reflecting its lower energy weighting. With the present ambiguity across commodity and equity markets, we saw strong buying in gold; silver too benefitted to some extent. Bullion counter can continue its upside momentum amid safe haven demand on fear of global recession due to trade war and talks of rate cut by fed. Crude oil prices, which has witnessed steep fall in past few weeks, may see some short covering at lower levels as prices have fallen rapidly in quick span of time. In base metal counter, prices may witness lower levels buying but upside will remain limited. CPI of China, ECB President Draghi Speaks in Frankfurt, CPI, Retail Sales Advance and U. of Mich. Sentiment of US, Unemployment Rate of Australia, etc are few important data to be released this week which may give significant direction to the commodities.
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• The RBI Monetary Policy Committee unanimously cut repo rate — the rate at which it lends to banks — by 25 basis points from 6 per cent to 5.75 per cent. The bank also changed the monetary policy stance from neutral to accommodative. The reverse repo rate and bank rate have been adjusted at 5.50 and 6.0 per cent respectively.
• According to a survey results from IHS Markit, India's service sector expanded at a weaker pace in May as uncertainty ahead of elections weighed on new orders. The Nikkei services purchasing managers' index, or PMI, fell to 50.2 in May from 51.0 in April. However, any reading above 50 indicates expansion in the sector.
Pharmaceuticals• Aurobindo Pharma has received 10 observations from the US health regulator for its Unit 3 in Hyderabad. The company will be responding to the USFDA within the stipulated time.
• Aurobindo Pharma has received 10 observations from the US health regulator for its Unit 3 in Hyderabad. The company will be responding to the USFDA within the stipulated time.
• Natco Pharma announced the completion of a regulatory inspection from the United States Food and Drug Administration (USFDA) for its Formulation facility in Kothur Village, near Hyderabad, India.
• Lupin announced the completion of the Good Manufacturing Practices (GMP) inspection of its Mandideep facility (Unit-2), by the Pharmaceutical and Medical Devices Agency (PMDA), Japan. The inspection was conducted between 14 May, 2019 and 17 May 2019.
• Bharat Heavy Electricals has received order from Indian Railways for 25 nos. Broad Gauge 5000 HP AC Electric Locomotives of type WAG-7 with regenerative feature.
• Jindal Stainless was eyeing Rs 200 crore revenue and a 25 per cent share of the growing e-rickshaw market in India over the next 2 years. The company is in talks with manufacturers to produce stainless steel e-rickshaws.
• State Bank of India (SBI) has targeted to grow 10-12 per cent in the current financial year, on the back of green shoots of revival in credit demand and better recoveries of loans.
• United Spirits, the country’s biggest liquor maker, earned more than 10% of its operating profit for the last fiscal year from cricket even as its team Royal Challengers Bangalore languished at the bottom of the popular Indian Premier League twenty20 cricket tournament.
• Gujarat Industries Power Co has successfully commissioned 75 MW Solar Power Project at Gujarat Solar Park, Village Charanka, Dist. Patan, Gujarat.
• US productivity in the first quarter was downwardly revised to 3.4 percent from 3.6 percent, although the growth still reflects a notable acceleration from the 1.3 percent increase in the fourth quarter.
• US trade deficit narrowed to $50.8 billion in April from a revised $51.9 billion in March. Economists had expected the deficit to widen to $50.7 billion from the $50.0 billion originally reported for the previous month.
• US initial jobless claims came in at 218,000, unchanged from the previous weeks revised level. The report said the less volatile fourweek moving average edged down to 215,000, a decrease of 2,500 from the previous weeks revised average of 217,500.
• The International Monetary Fund cut China's growth forecast for this year and next, citing downside risks and high uncertainty surrounding trade tensions, and said more policy easing may be needed if the conflict escalates. The lender lowered the growth forecast for this year to 6.2 percent from 6.3 percent seen in April. The projection for next year was trimmed to 6 percent from 6.1 percent.
• US factory orders slumped by 0.8 percent in April after jumping by a downwardly revised 1.3 percent in March, after reporting a substantial increase in new orders for manufactured goods in the previous month.
|Stocks||*Closing Price||Trend||Date Trend Changed||Rate Trend Changed||SUPPORT||RESISTANCE||Closing S/l|
|S&P BSE SENSEX||39616||UP||08.02.19||36546||36300||35300|
Closing as on 07-06-2019
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.
|10-Jun-19||S H Kelkar and Company||Buyback/Other business matters|
|12-Jun-19||Alembic Pharmaceuticals||Fund Raising|
|14-Jun-19||Alok Industries||Financial Results/Other business matters|
|17-Jun-19||Somany Ceramics||Other business matters|
|28-Jun-19||Reliance Home Finance||Financial Results/Other business matters|
|10-Jun-19||Monsanto India||Dividend - Rs 25 Per Share|
|11-Jun-19||Syngene International||Bonus 1:1|
|11-Jun-19||Essel Propack||Dividend - Rs 1.25 Per Share|
|12-Jun-19||The Indian Hotels Com.||Dividend Rs 0.50 Per Share|
|13-Jun-19||Asian Paints||Dividend Rs -7.65 Per Share|
|13-Jun-19||Infosys||Dividend- Rs 10.50 Per Share|
|13-Jun-19||Torrent Power||Dividend - Rs 5 Per Share|
|13-Jun-19||Torrent Pharmaceuticals||Dividend Rs 4 Per Share|
|13-Jun-19||Kansai Nerolac Paints||Dividend - Rs 2.60 Per Share|
|18-Jun-19||Triveni Engg & Industries||Buyback|
|18-Jun-19||MAS Financial Services||Dividend Rs -3.60 Per Share|
|19-Jun-19||Rallis India||Dividend - Rs 2.50 Per Share|
|19-Jun-19||Shriram Transport Fin Com||Dividend - Rs 7 Per Share|
|20-Jun-19||Bandhan Bank||Dividend - Rs 3 Per Share|
|20-Jun-19||Hindustan Unilever||Dividend - Rs 13 Per Share|
|20-Jun-19||HDFC Bank||Dividend Rs 15 Per Sh|
|20-Jun-19||Adani Ports and SEZ||Buyback|
|27-Jun-19||BSE||Dividend - Rs 25 Per Share|
|27-Jun-19||Graphite India||Dividend Rs 35 Per Share|
|28-Jun-19||Tata Chemicals||Dividend - Rs 12.50 Per Share|
Target Price: 156
|Face Value (Rs.)||10.00|
|52 Week High/Low||146.25/106.75|
|M.Cap (Rs. in Cr.)||134565.98|
|P/E Ratio (times)||11.45|
|P/B Ratio (times)||1.25|
|Dividend Yield (%)||4.47|
• NTPC is India's largest energy conglomerate with presence in the entire value chain of the power generation business.
• It is setting up 400 EV charging stations across various cities and highways and already MOU has signed with major city administration, vehicle aggregators, fleet operators and state governments. It has signed MOU with East Delhi Municipal Corporation setting up Waste to Energy (WTE). The plant to process 200 tones of municipal waste per day.
• NTPC has signed a supplementary JV agreement with GE power Systems for foray into EPC market for setting up FGD systems for state utilities sector and Waste to Energy project. These two areas are emerging markets of the country. NTPC qualified for submission of RFQ for 600 MW PV project on west of Nile river in Egypt.
• The company has added about 1960 MW in Q4FY19 thus taking the standalone installed capacity to 47325 MW. The group capacity as end of March 31, 2019 was at 55126 MW. Addition to commercial capacity during Q4FY19 was about 1160 MW with standalone commercial capacity as end of March 31, 2019 stand at 45725 MW and that of Group at 52682 MW.
• In Q4FY19 the company participated in 250 MW SECI tender for solar park and got mandate for setting up 100 power plant at a levellized tariff of Rs 2.91/units applicable for 25 years. The unit will be set up under EPC mode by the company and add to the RE capacity of the company. With this the company's solar capacity won under TBCB mode has gone up to 345 MW. Investment approval was given for 85 MW of Bilal Solar PV park won by the company in Feb 2019.
• The total installed capacity of Rihand Super Thermal Power Project has become 3000 MW (6x500MW) and the company plans to become 128,000 MW plus company by 2032.
• Out of the total capacity under implementation, 1329 MW is based on diversified sources of renewable energy. The Company is quickly moving towards its ambition of achieving a solar portfolio of 10 GW, out of the 100 GW target of GoI by 2022.
• Risks related to coal mining
• Delay in execution of projects
The company is the most preferred power company and rationalization of movement of coal to reduce electricity costs, and rationalization of coal grades based on Gross Calorific Value for correct tariff fixation would give further boost to the financials of the company. Thus we expect the stock to see a price target of Rs 156 in 8 to 10 months time frame on 1 year expected P/E of 12.05x and FY20E earnings of Rs.12.98.
BHARAT ELECTRONICS LIMITED
Target Price: 155
|Face Value (Rs.)||1.00|
|52 Week High/Low||124.20/72.55|
|M.Cap (Rs. in Cr.)||26059.36|
|P/E Ratio (times)||13.81|
|P/B Ratio (times)||2.83|
|P/BDividend Yield (%)||3.18|
• Bharat Electronics Limited (BEL) is engaged in design, manufacture and supply of electronics products/systems for the defense requirements, as well as for nondefense markets. The company's principal products/services include weapon systems, radar and fire control systems, and communication.
• BEL reported order inflow of Rs. 6929 Crores mainly from ‘smart city’ and homeland security systems. It currently has an order book of Rs. 51800 Crores which provides strong revenue visibility for next some years. The management has guided for revenue growth at 13-15% for FY20E and at a similar level for FY21E. BEL is setting up utility scale solar power plants for captive consumption in the estates of ordinance factories at 17 locations across eight states for total capacity of 150 MW.
• Q4 FY19 witnessed continued order booking in projects like Integrated Air Command and Control System (IACCS), weapon locating radar, electronic warfare systems and communication equipment. To increase contribution from this segment, BEL has already set up an office in Vietnam and is planning offices in Sri Lanka and Myanmar. The export order book as at end Q4 FY19 was at Rs. 816 Crores
• Q4 FY19 revenue was up 7.7% YoY at Rs 3884.64 Crores. EBITDA margin expanded 185 bps YoY to 23.9% led by 485 bps YoY expansion in gross margin. Other income was up 362% YoY at Rs Rs. 128.79 Crores. Net profit grew by 9% to Rs 642.26 Crores. EVM/VVPAT, IACCS, WLR, Tropo upgrade, Land based EW, Schilka upgrade were the key orders executed in FY19.
• The management has clear focus on recoverability of receivables which has led to efficient working capital management. Strong execution in FY20E21E coupled with steady capex of 600-650 crore in the next two to three years will help avert any debt on the books of BEL.
• Delay in finalization of defense orders.
•• Increasing competition from private players
BEL is well positioned to benefit from the rising defense expenditure, supported by strong manufacturing base and execution track record, relationship with defense and government agencies, strategic collaboration with foreign technology partners for new product development, in-house R&D capabilities and increased focus on exports to friendly countries. We expect the stock to see a price target of Rs 155 in 8-10 months time frame on a two year average PEx of 20.94 times and FY20E earnings per share of Rs. 7.41.
Source: Company Website Reuters Capitaline
Above calls are recommended with a time horizon of 8 to 10 months.
The stock closed at Rs 357.10 on 07th June, 2019. It made a 52-week low of Rs 253.99 on 22nd October 2018 and a 52-week high of Rs. 366.06 on 01st Aug 2018. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 318.19
As we can see on weekly chart that stock is trading in higher highs and higher lows and also has given the breakout of 200 WEMA, which is considered to be bullish. Last week, stock ended over 2% gains and also has breached its earlier resistance of 355 along with high volumes which indicates buying is aggressive for the stock. So one can initiate long in the range of 350-355 levels for the upside target of 380-390 levels with SL below 335.
The stock closed at Rs 265.55 on 07th June, 2019. It made a 52-week low at Rs 211.40 on 14th Feb 2019 and a 52-week high of Rs. 299.75 on 28th August 2018. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 249.54
Short term and medium term bias are looking positive for the stock as it was formed an “Inverted Head and Shoulder” pattern on weekly charts which is bullish in nature. Last week, stock gained around 5% and has given the breakout of pattern, also has managed to close above the same so follow up buying can continue for coming days. Therefore, one can buy in the range of 258-261 levels for the upside target of 280-286 levels with SL below 244.
Disclaimer : The analyst and its affiliates companies make no representation or warranty in relation to the accuracy, completeness or reliability of the information contained in its research. The analysis contained in the analyst research is based on numerous assumptions. Different assumptions could result in materially different results.
The analyst not any of its affiliated companies not any of their, members, directors, employees or agents accepts any liability for any loss or damage arising out of the use of all or any part of the analysis research.
SOURCE: CAPITAL LINE
Charts by Spider Software India Ltd
Above calls are recommended with a time horizon of 1-2 months
Nifty dragged down due to liquidation of long positions. Recent data has turned cautious and is indicating probability of further profit booking. Call writing and put unwinding are seen in recent trading sessions. Call writes were active in 12000, 11900 strike calls indicating limited upside. This clearly indicates lack of buying interest and discomfort in the market. The levels of 12000 will remain crucial for this week as indicated by option open interest concentration. If Nifty falls below the 11800 mark, it could correct to 11700 levels on the back of further selling. On bounce, the index will face strong resistance at 11950-12000 levels. The options open interest concentration is at the 12000-strike calls with the highest open interest of above 38 lakh shares; among put options, the 11800-strike taking the total open interest to 34 lakh shares, with the highest open interest among put options. The Implied Volatility (IV) of calls closed at 13.52% while that for put options closed at 13.00%. The Nifty VIX for the week closed at 15.53% and is expected to remain sideways. The PCR OI for the week closed at 1.39 which indicates put writing. Next support is placed around 11800-11770 levels.
**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
Turmeric futures (July) may witness further correction towards 6600-6500 levels. The sentiments of the market participants related to this spice are pessimistic because of weak demand from stockists amid higher arrivals of the spice in the spot markets. Additionally, the outlook for turmeric is seen bearish as sowing of the spice has begun in Sangli, and it will begin from the upcoming week in parts of Telangana. Taking a look at the weekly charts, it is observed that jeera futures (July) is facing resistance near 18000 levels & reversing its gains owing to profit booking. This week also is it expected that the counter may see further selling & move lower towards 17250-17030 levels. The fundamental attached to this weakness is the sideways movement of Rupee & giving a higher closing against Dollar. This phenomenon is capping the export demand & elevating supplies in the spot markets. It is reported that arrivals at the benchmark market in Unjha, Gujarat, are steady at 10,000 bags (1 bag = 55 kg). The bullish trend of cardamom futures (July) is likely to take a pause & the upside may remain capped near 2390 levels. The reason is that the India Meteorological Department foresights that conditions are favourable for the onset of the southwest monsoon over Kerala in the next 48 hours. The projections of sufficient rains may aid to the crop growth & send bearish signals to the counter in days to come. Dhaniya futures (July) is trading near 9 weeks low & this downtrend may extended towards 6575 levels. On the spot market of Ramganj, Rajasthan is witnessing higher amount of arrivals near to 7000 bags (1 bag = 40 kg) on daily basis.
Bullion counter may continue its upside momentum amid safe haven demand on fear of global recession due to trade war and talks of rate cut by fed and falling global stock markets. Also supporting gold price is dovish tilt of major central banks and increasing economic uncertainty amid growth slowdown and trade conflict. Meanwhile, ECB indicated willingness to take measures to support economy while delaying possibility of first rate hike until mid-2020. Fed officials have indicated that they may act if trade concerns hurt US economy. This has increased expectations that the central bank may cut interest rate soon. U.S. officials had held talks on trade and migration amid reports U.S. President Donald Trump might delay the imposition of tariffs that was due this week. However, the White House stated that it is standing firm on its position that Mexico must make take significant new steps to halt the surge of Central American migrants or face tariffs on its exports to the United States. Gold can take support near 31800 levels and recover towards 33000 levels while silver can test 37800 levels while taking support near 36200 levels. U.S. Vice President Mike Pence stated that he was encouraged that Mexican officials were willing to do more to curb migration flows to the United States, but it was up to President Trump to decide if they went far enough to avert threatened tariffs. Meanwhile Trump stated that he would decide whether to carry out his threat to hit Beijing with tariffs on at least $300 billion in Chinese goods.
Soybean futures (July) may witness a steep correction towards 3550-3500 levels due to lack of demand side fundamentals. Indian soybean exporters have asked the government to issue guidelines about the system of payments for exports to Iran because they are unable to sign contracts in the absence of clarity after the US ended India’s waiver from sanctions against Iran. The exporters have been exporting 1 lakh tons soymeal every month, which has now come to a standstill because of no clarity on remittance. On CBOT, U.S. soybean futures (July) is facing resistance near $8.94 a bushel as the market participants are cautious ahead of the World Agricultural Supply and Demand Estimates data release by the U.S Department of Agriculture on Tuesday. The potential of switching acres to soybeans and the ongoing threat of African swine fever reducing overall demand, is keeping prices in a limited range. Soy oil futures (July) might follow the bearish footsteps of soybean & trade with a negative bias in the range of 725-740 levels. CPO futures (July) will probably break the support near 508 & plunge further towards 500-495 levels. The outlook of Malaysian palm oil futures is bleak owing to bearish trend of oil prices & a stronger ringgit deterring the positive sentiments. Traders are also stay cautious ahead of a stockpiles report next week, which could weighed on the palm oil prices. Mustard futures (July) may show some weakness towards 3890 if breaks the support near 3950-3935 levels. The demand for this oilseed from the crushers is slowing down due to lack of fresh supplies. Stocks with farmers, processors, stockists and state-run agencies were at 5.5 million tons in May, compared with 4.4 million tons last year.
Crude oil prices, which has witnessed steep fall in past few weeks, may see some short covering at lower levels as prices have fallen rapidly in quick span of time. Crude oil may take support near 3500 and can recover towards 3900 in near term. Recently Brent and WTI sank to their lowest levels since mid-January after U.S. crude production hit a new record-high and stockpiles climbed to their highest since July 2017. Prices had been supported by supply curbs by the Organization of the Petroleum Exporting Countries (OPEC) and some allies including Russia. Supply has also been limited by U.S. sanctions on oil exports from Iran and Venezuela. Disappointing US ADP jobs report earlier last week, IMF’s warning about impact of trade war on growth and Mexican rating downgrade on back of trade issues has fueled concerns about health of major economies. But supporting crude oil price are increased expectations that OPEC may extend production cuts at its next meeting. Lower price, higher inventories and demand uncertainty makes a case for OPEC to continue with production cuts however Russia remains uncertain. However, weighing on crude oil price is unexpected rise in US crude oil stocks and record high US crude oil production. Also weighing on price are demand concerns amid slowdown in growth in major economies and concerns about US led global trade war. Natural gas may remain under selling pressure on feeble demand as it can test 150 levels by facing resistance near 175 levels. On weather front, US forecaster NOAA says below normal temperatures expected in most of central and eastern US while higher chances of warmer weather in western US.
In cotton futures (June), we may see lower level buying near 21300, while the upside may get extended to 22200 levels. The fundamentals of the domestic market are tight as the gap between demand & supply is widening. The Foreign Agricultural Service of the US Department of Agriculture has scaled down its estimate for India's cotton production in 2018-19 (Aug-Jul) to 33.9 mln bales (1 bale = 170 kg) from 35.0 mln bales projected in April. The closing stock for 2019-20 has been scaled down to 11.23 mln bales from 12.00 mln bales projected earlier. In addition to this, the most important factor to watch will be the price movement of cotton in the international market amidst the various developments of the ongoing trade war. In a recent update, the International Cotton Advisory Committee said that the global cotton prices may remain under pressure due to escalating concerns over the US-China trade spat and on expectations of higher stocks. The trend of cocud futures (July) has reversed & is indicating that more steep correction is on the way till 2530-2450 levels. Profit booking from higher levels & withdrawal of inventories from the exchange accredited warehouses may add to the bearishness in days to come. Guar seed futures (July) is likely to break the long term support level near 4210 & descend to test 4100-4050 levels, while guar gum futures (July) may plummet further towards 8200 levels due to the bearish trend of oil prices in the international market & southwest monsoon knocking the doors of Indian farmers, which may induce the market participants to stay on the sell side.
In base metal counter, prices may witness lower levels buying but upside will remain limited. US-China trade concerns are however not abating with US considering imposing tariffs on remaining Chinese goods after the G20 summit in June. IMF reduced its outlook for China, saying the trade war is tilting the balance of risks to the downside. Copper may recover lower towards 420 while taking support near 400. On copper front, unions at Chile's Chuquicamata copper mine expressed disappointment in state-run miner Codelco's latest contract offer but agreed to extend negotiations in hopes of averting a strike. Meanwhile Lead may recover towards 157 levels while taking support near 150 levels. Lead prices edged up after Nyrstar NV stated that it has halted production at the Port Pirie smelter in Australia and declared force majeure on shipments to customers. LME lead stocks fell to 66,550 tonnes, the lowest since April 2009. Nickel can trade with sideways bias as it can support near 845 while resistance near 880. Nickel remains pressurized by recent rise in stocks at LME warehouses along with weaker demand from the stainless steel sector. Aluminium may test 148 levels while taking support near 140 levels. Zinc may trade with sideways to upside bias as it can test 212 levels while taking support near 200 levels. Tightness in physical market has also underpinned zinc price. LME Cash to three month premium stood at $138.5 but is off the two decade high of $161 hit recently. According to the ILZSG, zinc is forecasted to be in deficit this year, with demand exceeding supply by 121,000 tonnes.
LEAD MCX (JUNE) contract closed at Rs. 151.55 on 06th Jun’19. The contract made its high of Rs. 152.65 on 06th Jun’19 and a low of Rs.147.35 on 06th Apr’19. The 18- day Exponential Moving Average of the commodity is currently at Rs. 135.68.On the daily chart, the commodity has Relative Strength Index (14-day) value of 77.29.
One can buy at Rs. 149 for a target of Rs. 160 with the stop loss of Rs. 145.
SILVER MCX (JULY) contract closed at Rs. 36866 on 06th Jun’19. The contract made its high of Rs. 38281.00 on 26th Apr’19 and a low of Rs. 35826.00 on 28th May’19. The 18-day Exponential Moving Average of the commodity is currently at Rs. 37775.00 On the daily chart, the commodity has Relative Strength Index (14-day) value of 55.34.
One can buy at Rs. 36800 for a target of Rs. 38800 with the stop loss of Rs. 35800.
DHANIYA NCDEX (JULY) contract was closed at Rs. 7017 on 06th Jun’19. The contract made its high of Rs. 7791 on 22nd May’19 and a low of Rs. 6967 on 07th Jun’19. The 18- day Exponential Moving Average of the commodity is currently at Rs. 7393.33 on the daily chart, the commodity has Relative Strength Index (14-day) value of 34.39.
One can sell at Rs. 7220-7250 for a target of Rs. 6700 with the stop loss of Rs 7500.
• US ADP Non-Farm Payrolls rose by 27,000 last month as against market expectation of 188,000; the slowest pace in more than nine years.
• The ECB ruled out raising interest rates in the next year and even opened the door to cutting them or buying more bonds.
• U.S.-China tariffs could slash global economic output by 0.5% in 2020, the International Monetary Fund (IMF) warned.
• India's gold imports in May jumped 49% from a year earlier to 116 tonnes.
• India commodity F&O turnover is up by 9% YoY at 13 trillion rupees in Apr-May, 2019.
• India's gold imports from Switzerland were at a near-two year high of 58.6 tons in April.
• The government has so far sold 44,150 tons of the 1.6- mln-tn wheat on offer under its open market sale scheme for 2019-20 (Apr-Mar).
• There is about a 60-65% probability of the weak El Nino condition in the tropical Pacific Ocean region persisting during Jun-Aug, and is likely to decrease to 50% from September onwards. - World Meteorological Organization
• The National Agricultural Cooperative Marketing Federation of India bought 13,832 tons of urad harvested in the 2018-19 (Jul-Jun) Rabi season, as of 27th May, 2019.
• NCDEX has modified the specification of cotton (29 MM) contract by increasing the trading unit to 100 bales (1 bale = 170 kg) from 25 bales, w.e.f 10th June, 2019.
• The export of oilmeals during May 2019 provisionally reported at 58,549 tons compared to 263,644 tons in May, 2018 i.e. down by 78%.
In the week gone by, CRB saw correction for second straight week on massive fall in crude oil prices. Base metal prices dipped down further on trade war tension amid some weak economic data. Fall in dollar index capped the downside of some commodities though. U.S. dollar slipped after data showing weak private-sector job creation in May strengthened expectations of an interest rate cut from the Federal Reserve. Prices of safe-haven gold rose for a seventh-straight day on Thursday, getting some residual support by expectations that the Federal Reserve will have to cut rates this year to maintain economic growth. Gold made a high of 32834 in MCX while in COMEX; it hit the higher side of $1348. Silver was just few points shy away from 37000 levels. India's gold imports in May jumped 49% from a year earlier to 116 tonnes as a correction in local prices during a key festival boosted retail demand Silver also managed to trade up despite fall in base metals prices. Copper prices on the Shanghai Futures Exchange (ShFE) dropped to their lowest in two years, as weak Chinese factory data and a U.S. threat to impose tariffs on Mexican goods sparked fears of weaker global growth and demand for metals. Oil has entered a bear market as fears of an economic downturn mount. It made a low of $50.6 in NYMEX and 3522 in MCX. The EIA report was exceptionally weak, showing a strong build in crude oil (+6.8 million barrels), gasoline (+3.2 million barrels) and distillates (+4.6 million barrels). Natural gas prices were remained in bearish territory on comparatively lower demand.
In agri commodities, cotton prices slipped as unfavorable planting weather for grains increased the likelihood of increased cotton planting, while U.S.-China trade talk concerns loomed. Mostly oil seeds and edible oil turned weak last week on dull trade. According to a source, China will stockpile up to 7 million tonnes of soybeans bought from the United States during an earlier truce in the trade war between the nations, rather than crush them for immediate sale as a feed ingredient. In spices, jeera prices augmented further due to heavy purchases being made by the exporters and wholesalers. Good news for India's cumin exporters is that its yield in Syria will be lower this year & the crop usually comes in the middle of June. Cardamom futures trend is bullish on account of crop losses over last couple of years & expectation of decline in arrivals in the coming days.
The 3rd Advance Estimates of production of major crops for 2018-19 have been released by the Department of Agriculture, Cooperation and Farmers Welfare on 03rdJune, 2019. As per 3rd Advance Estimates for 2018-19, total Food grain production in the country is estimated at 283.37 million tonnes which is higher by 17.62 million tonnes than the previous five years’ (2013-14 to 2017-18) average production of food grain. Although the cumulative rainfall in the country during the monsoon season (June to September, 2018) has been 9% lower than Long Period Average (LPA), most of the major crops producing states have witnessed normal monsoon rainfall. Accordingly, the production of most of the crops for the agricultural year 2018-19 has been estimated higher than their normal production.
• Total production of Rice d u r i n g 2 0 1 8 - 1 9 i s estimated at record 115.63 million tonnes. Production of rice has i n c r e a s e d b y 2 . 8 7 million tonnes than the production of 112.76 million tonnes during 2017-18. It is also higher by 7.83 million tonnes than the five years’ average production of 107.80 million tonnes.
• Production of Wheat, estimated at record 101.20 million tonnes, is higher by 1.33 million tonnes as compared to wheat production of 99.87 million tonnes achieved during 2017-18. Moreover, the production of wheat during 2018-19 is higher by 6.59 million tonnes than the average wheat production of 94.61 million tonnes.
• Production of Nutri / Coarse Cereals estimated at 43.33 million tonnes is marginally higher by 0.24 million tonnes than the average production.
• Total Pulses production during 2018-19 is estimated at 23.22 million tonnes which is higher by 2.96 million tones than the Five years’ average production of 20.26 million tonnes.
• Total Oilseeds production in the country during 2018-19 is estimated at 31.42 million tonnes. The production of oilseeds during 2018-19 is higher by 1.77 million tonnes than the Five years’ average oilseeds production.
• With an increase by 20.46 million tonnes over 2017-18, total production of Sugarcane in the country during 2018-19 is estimated at record 400.37 million tonnes. Moreover, the production of sugarcane during 2018-19 is higher by 50.59 million tonnes than the average sugarcane production of 349.78 million tonnes.
• Production of Cotton estimated at 27.59 million bales (of 170 kg each) and Production of Jute & Mesta estimated at 9.79 million bales (of 180 kg each).
Although the bumper production spells good for farmers, government and for better economic growth, but not always guarantee for cheering farmers. Adequate supply of agriculture produce keep food inflation under check, but it also weigh on prices to slide below the production cost that increase the misery of farmers. The government is also facing a daunting task of ensuring farmers a fair and remunerative price for their produce. The lack of procurement processes and infrastructure are forcing farmers to distress sell their produce in the open market. Meanwhile, he Centre has implemented many procurement mechanisms so that most of the notified crops can be procured at MSP-a move, which may help farmers
|3rd JUN||Indian Manufacturing PMI rose to 52.7, fastest in three months.|
|4th JUN||UK manufacturing activity declined further amid Brexit uncertainty.|
|5th JUN||India’s services PMI slips to sinks to one-year low in May.|
|6th JUN||RBI delivers 3rd rate cut in a row, shifts policy stance to “accommodative”.|
|6th JUN||UK PM will be installed by 22nd July.|
Indian Rupee appreciated by half-a-percent this week amid Reserve Bank of India (RBI) cut its repo rate from 6.00% to 5.75%. Furthermore RBI hinted that policy will be loosened further in the second half of this year. Inflation has been edging higher gradually but at sub-3%, readings are still below the 4% target, providing room for RBI to focus on growth concerns. Euro remains subdued after the measures announced by the ECB yesterday were underwhelming. The Bank strengthened its forward guidance slightly by saying that interest rates will be left unchanged at “at least through the first half of 2020” rather than just until the end of this year, but the terms of TLTRO-III were slightly less dovish than those of the previous round. President Draghi revealed that the Governing Council had a more “granular” discussion of which policy tools would be used, if adverse contingencies materialized. Admittedly Euro gained this week against Dollar after weak US-ISM manufacturing and Fed’s speaker comment for rate cut. Next week growth numbers from UK and retail sales from US are the important economic releases to watch-out for.
USDINR is likely to stay below 69.65 and move lower towards 68.80.
USD/INR (JUN) contract closed at 69.4125 on 6th Jun’ 19. The contract made its high of 69.8650 on 3rd Jun’19 and a low of 69.1950 on 4th Jun’19 (Weekly Basis). The 14-day Exponential Moving Average of the USD/INR is currently at 69.84
On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 38.22. One can sell at 69.65 for the target of 69.05 with the stop loss of 69.95.
EUR/INR (JUN) contract closed at 78.1225 on 6th Jun’ 19. The contract made its high of 78.4350 on 4th Jun’19 and a low of 77.75 on 3rd Jun’19 (Weekly Basis). The 14-day Exponential Moving Average of the EUR/INR is currently at 78.36
On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 41.35. One can sell at 78.60 for a target of 78 with the stop loss of 78.90.
GBP/INR (JUN) contract closed at 88.2825 on 6th Jun’ 19. The contract made its high of 88.40 on 6th Jun’19 and a low of 87.72 on 4th Jun’19 (Weekly Basis). The 14-day Exponential Moving Average of the GBP/INR is currently at 88.90
On the daily chart, GBP/INR has Relative Strength Index (14-day) value of 30.79. One can sell at 88.65 for a target of 88.05 with the stop loss of 88.95.
JPY/INR (JUN) contract closed at 64.2225 on 6th Jun’ 19. The contract made its high of 64.50 on 3rd Jun’19 and a low of 64.13 on 3rd Jun’19 (Weekly Basis). The 14-day Exponential Moving Average of the JPY/INR is currently at 64.09
On the daily chart, JPY/INR has Relative Strength Index (14-day) value of 54.46. One can buy at 63.80 for a target of 64.40 with the stop loss of 63.50.
Penna Cement Industries gets Sebi nod for Rs 1,550-cr IPO
Penna Cement Industries has got markets regulator Sebi's go ahead for its Rs 1,550-crore initial public offering (IPO). The IPO of Penna Cement comprises fresh issue of up to Rs 1,300 crore and an offer for sale of up to Rs 250 crore by the company's promoter, PR Cement Holdings Limited. In November last year, Penna Cement Industries had filed draft papers with Sebi to raise Rs 1,550 crore through IPO. The company obtained the regulator's "observation" on May 31, 2019, as per the latest update with the capital markets watchdog. Sebi's observation is necessary for any company planning to launch public issues. The Hyderabad-based firm plans to utilise the proceeds from the IPO for repayment/ pre-payment, in full or in part, of certain borrowings availed by the company and other general corporate purposes. Edelweiss Financial Services, IIFL Holdings, JM Financial and YES Securities are the book running lead managers to the issue. Penna Cement has four integrated manufacturing facilities and two grinding units spread across Andhra Pradesh, Telangana and Maharashtra.
Shyam Steel Industries files IPO papers with Sebi
Shyam Steel Industries has filed draft papers with markets regulator Sebi for its initial public offering. The IPO consists of fresh issue of up to Rs 200 crore and an offer for sale of up to 66.70 lakh shares, comprising up to 11.60 lakh shares by the promoter selling shareholders and up to 55.09 lakh shares by other selling shareholders, according to the Draft Red Herring Prospectus (DRHP). Market sources said the IPO size is estimated to be around Rs 500 crore. The Kolkata-based firm proposes to utilise the net proceeds from the IPO towards repayment/prepayment of certain borrowings of the company and its subsidiary Shyam Steel Manufacturing and for other general corporate purposes. Axis Capital, Edelweiss Financial Services, SBI Capital Markets and IIFL Holdings are the book running lead managers to the issue and Link Intime is the registrar. Shyam Steel Industries is a thermo mechanically treated rebar (TMT Rebar) player having integrated steel plants. The company operates all its steel manufacturing plants in West Bengal. The equity shares of the company are proposed to be listed on BSE and NSE.
Shapoorji Pallonji Group’s first IPO looks to raise Rs 4,500 crore
The 150-years-old privately held conglomerate, Shapoorji Pallonji Group, is planning to make its first initial public offering with a Rs 4,500 crore issue of arm Sterling & Wilson Solar. The IPO may hit the capital market by the third quarter of FY20. The $8.1 billion Shapoorji Pallonji Group, which has run most of its businesses privately, is exploring various ways to unlock value and deleverage balance sheet, as it faces rising cost pressures and sluggish sales volumes. The IPO of Sterling & Wilson Solar, the group’s solar power engineering, procurement and construction (EPC) business, could be the first on this front. The issue is an offer for sale by the company’s promoters and chairman, Khurshed Daruvala. Proceeds from the issue will be used by the promoters to capitalise the parent company, which can in turn repay the loans it has taken from Sterling & Wilson Solar, making it a zero-debt company. Getting listed will also help us in enhanced bank limits and better brand recognition .The group is headed by Shapoor Mistry, who along with brother Cyrus Mistry owns a 18.6 per cent stake in the Tata Group’s holding company, Tata Sons. Solar EPC is a relatively new business for the Shapoorji Pallonji Group which has presence in engineering and construction, energy and infrastructure, real estate, textiles, financial services and water.
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Nippon Life increases stake in Reliance Mutual Fund to 75%
Reliance Capital has signed binding definitive agreements with Nippon Life Insurance of Japan to exit its stake in Reliance Nippon Life Asset Management Ltd (RNAM). Both partners currently hold 42.88% each in the company, while the rest is with public shareholders. Pursuant to the agreements, Nippon Life will also make an open offer to the public shareholders of RNAM at Rs 230 per share, as required under SEBI regulations, and reach the maximum permissible promoter shareholding of 75% for listed companies. The transaction price represents a premium of 15.5% to the minimum 60-day price as specified under the SEBI Takeover Regulations. Reliance Capital will receive proceeds of approximately Rs 6,000 crore (US $ 860 million) through sale of its shareholding to Nippon Life Insurance at Rs 230 a share, and the simultaneous Offer For Sale (OFS) to other financial investors. The entire proceeds of approximately Rs 6,000 crore (US $ 860 million) will be utilized to reduce Reliance Capital’s outstanding debt by 33%. Sundeep Sikka will continue as the CEO and there will be no change in management team and structure.
Motilal Oswal Mutual Fund announced the change in the composition of fund management structure
Motilal Oswal Mutual Fund announced the change in the composition of fund management structure for Motilal Oswal Multicap 35 Fund (MOF35), Motilal Oswal Long Term Equity Fund (MOFLTE), Motilal Oswal Dynamic Fund (MOFDYANAMIC) and Motilal Oswal Focused 25 Fund (MOF25). Akash Singhania is the new fund manager for MOF35, MOFLTE and MOFDYANAMIC, and Siddharth Bothra is the new fund manager of MOF25 effective May 17, 2019.
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) along with Mr. Amitabh Kant (CEO, NITI Aayog) during Fintech Summit organised by ASSOCHAM held on Thursday, 30th May, 2019 at Hotel The Taj Mahal, Mansingh Road, New Delhi.
Memento been presented to Mr. Pravin Aggarwal (Whole Time Director, SMC Insurance Brokers Pvt. Ltd) & Mr. Dhiraj Bhalla (Associate Director, SMC Insurance Brokers Pvt. Ltd) by Mr. Venkatesh Naidu (Director, Exide Life Insurance) for Last Year Biz held on Tuesday, 4th June, 2019 at SMC Insurance, Pratap Nagar office.
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