n the week gone by, bulls across the globe looked cheerful as economic stimulus I around the world eased fears of economic deceleration. Also, resumption of trade dialogues between the US and China for the first time in nearly two months boosted the investors' sentiment. Meanwhile, the Organisation for Economic Cooperation and Development (OECD) reduced its global growth forecast to 2.9 percent slowing from 3.6 percent recorded in previous year as protectionist policies take an increasing toll on confidence and investment, and risks continue to mount on financial markets. In the past few weeks, central banks including U.S. Federal Reserve, European Central Bank and The People’s Bank of China have eased policies to shore up the growth and have even urged the governments to give fiscal stimulus to ensure that their efforts won’t go ineffective.
Back at home, domestic markets saw sharp gains after Finance Minister Nirmala Sitharaman proposed to slash corporate tax for domestic companies and new domestic manufacturing companies. She also announced that the enhanced surcharge shall not apply to the capital gains by FPIs and buyback tax for listed companies that have announced buybacks pre-July 5 is exempted. Markets looked satisfied with the measures announced by finance minister as this is sure to give a major boost to the economy and to create a surplus in the hands of corporate, ease liquidity concerns and allowing corporate to make fresh new investments. Meanwhile, monsoon rains in India in the week through to Wednesday were above average for a third straight week. Going forward, it is expected that market will continue to track global as well as domestic factors, inflow and out flow of the foreign funds, crude oil prices and movement of the domestic currency among others.
On the commodity market front, the week started with massive wild swings owing to attack on oil field in Saudi Arabia. CRB surrendered some of its gain amid geopolitical tension. Bullion counter may trade with ambiguity as Fed decided to cut rates by 25bps but commentary was not as dovish as expected. Gold can test 37000 levels while taking resistance near 38000 levels while silver can test 45600 levels while taking resistance near 47300 levels. Crude oil prices may trade with wild swings in both sides as supply disruptions regarding Saudi Arabia oil installations and uncertainty regarding geopolitical tensions in Middle East will keep investors jittery. Crude oil may take support near 4100 levels while taking resistance near 4550 levels. Base metal counter can witness some recovery at lower levels amid positive development in US and China trade war. German Manufacturing PMI, German Ifo Business Climate Index (Sep), Consumer Confidence (Sep), Interest Rate Decision of Newzeland, New Home Sales and GDP of US etc are few very important triggers for the week.
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• Finance Minister Nirmala Sitharaman announced cut in corporate tax rate. The current corporate tax rate has been brought down to 22% from 30%. The effective tax rate will be 25.17% inclusive of all surcharges and cess for such domestic companies. For new manufacturing companies the existing tax rate is 25% which has been brought down to 15%. The effective tax rate after surcharges and cess will be 17%. The revenue foregone on reduction in corporate tax and other relief measures will be Rs 1.45 lakh crore annually.
• At a press conference after meeting PSU bank, Finance Minister Nirmala Sitharaman said the government asked banks not to declare any stressed loan account of MSMEs as NPA till March 2020 and work on recasting their debt. Finance Minister Nirmala Sitharaman said there already exists a circular from the Reserve Bank that provides for stressed loan accounts of MSMEs not being declared non-performing assets (NPAs).
• Reliance Jio added 8.5 million subscribers in July, after almost three months of slow addition, even as the older incumbents lost a cumulative six million, according to data from the Telecom Regulatory Authority of India (Trai). Bharti Airtel reported 2.5 million subscribers exiting its network. Vodafone Idea had 3.4 million exits. Jio’s highest reported monthly addition this year has been 9.4 million in March.
• Surya Roshni has received an order worth Rs 79.80 crore for design, manufacture supply, warranty of LED Bulbs and other related works from Energy Efficiency Services through competitive e-bidding.
• Lupin has received warning letter from the U.S. FDA for its Mandideep (Unit-1) facility. This is subsequent to an earlier intimation received from the U.S. FDA in March 2019 wherein the agency had classified its inspection conducted at the said facility in December 2018 as "Official Action Indicated" (0AI).
• Tata Motors unveiled a new powertrain for its electric vehicles that will be deployed in a range of its upcoming models, including the one scheduled for launch early next year, which will help it lower cost by scaling up volume.
• Maruti Suzuki India has achieved the milestone of one millionth car exports from the Mundra Port in Gujarat. An Oxford Blue colour popular sedan Dzire left for Chile from Mundra. Mundra port majorly serves for exports to Latin American, Far Eastern and European markets of Maruti Suzuki.
• DLF Ltd has sold a little over nine acres of land in Sector 74A, Gurugram to American Express for Rs 300 crore. The deal, at a little over Rs 32 crore an acre, is the costliest transaction in the neighbourhood that is about 16 km away from DLF Cyber City.
Casting, Forgings & Fastners
• Bharat Forge completed an investment of €11.35 million (Rs 88.9 crore) to form a 50:50 joint venture with Germany's Refu Electronik GmbH to make components for electric and hybrid vehicles. The company had announced the investment plan in June this year and the transaction was completed today following the completion of due diligence.
• The Federal Reserve cut interest rates by a quarter percentage point for the second time since July, as concerns grow about a potential global slowdown.
• US leading economic index was unchanged at 112.1 in August after climbing by a revised 0.4 percent in July. The index had been expected to remain unchanged compared to the 0.5 percent increase originally reported for the previous month.
• US initial jobless claims inched up to 208,000, an increase of 2,000 from the previous week's revised level of 206,000. Economists had expected jobless claims to climb to 213,000 from the 204,000 originally reported for the previous week.
• US industrial production climbed by 0.6 percent in August after edging down by a revised 0.1 percent in August. Economists had expected industrial production to rise by 0.2 percent compared to the 0.2 percent dip originally reported for the previous month.
• The Bank of England left its monetary policy unchanged amid the heightened uncertainty as the October 31 deadline for the UK's exit from the European Union looms, and warned that the global slowdown and a no-deal Brexit would hurt the economy severely.
• The People's Bank of China set the one-year lending rate at 4.20 percent compared to 4.25 percent in August. The five-year lending rate was maintained at 4.85 percent.
|Stocks||*Closing Price||Trend||Date Trend Changed||Rate Trend Changed||SUPPORT||RESISTANCE||Closing S/l|
|S&P BSE SENSEX||38015||UP||08.02.19||36546||36300||35300|
*SBIN has breached the resistance of 295
Closing as on 20-09-2019
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.
|23-Sep-19||Manappuram Finance||Fund Raising|
|24-Sep-19||Kaveri Seed Company||Buyback|
|24-Sep-19||L&T Finance Holdings||Fund Raising|
|25-Sep-19||BF Utilities||Financial Results|
|26-Sep-19||Punjab National Bank||Fund Raising|
|27-Sep-19||Gujarat Alkalies and Chemicals||Stock Split|
|30-Sep-19||IL&FS Investment Managers||Financial Results|
|19-Oct-19||HDFC Bank||Financial Results|
|23-Sep-19||IL&FS Investment Managers||Dividend - Rs 0.30 Per Share|
|24-Sep-19||Ajmera Realty & Infra India||Dividend - Rs 3.3 Per Share|
|24-Sep-19||Texmaco Rail & Engineering||Rights 19:100 @ Premium Rs 45.70/|
|24-Sep-19||ICRA||Dividend - Rs 30 Per Share|
|25-Sep-19||Hinduja Global Solutions||Dividend - Rs 2.50 Per Share|
|26-Sep-19||Kamdhenu||Dividend - Re 1 Per Share|
|26-Sep-19||Advani Hotels & Resorts (India)||Interim Dividend - Rs 0.80 Per Share|
|27-Sep-19||Aarti Industries||Bonus 1:1|
Torrent Pharmaceuticals Limited
Target Price: 2012
|Face Value (Rs.)||5.00|
|52 Week High/Low||1964.00/1453.00|
|M.Cap (Rs. in Cr.)||28788.55|
|P/E Ratio (times)||36.77|
|P/B Ratio (times)||6.09|
|Dividend Yield (%)||0.76|
• Torrent Pharmaceuticals Limited (Torrent), with annual revenues of more than Rs. 7,000 Crores is the flagship Company of the Torrent Group. Torrent is ranked 7th in Indian Pharmaceuticals Market and is amongst the Top 5 in the therapeutics segments of Cardiovascular (CV), Central Nervous System (CNS), Gastro-intestinal (GI), and Vitamins Minerals Nutritionals (VMN).
• It is specialty-focused company with 75% of its revenue from chronic & sub-chronic therapies. It has a widespread presence in more than 40 countries and is ranked 1st amongst the Indian pharma companies in Brazil, Germany & Philippines. It has eight manufacturing facilities (7 in India & 1 in US), of which five are USFDA approved.
• On the development front, it has entered into a licensing agreement with Glenmark to co-market diabetes drug Remogliflozin Etabonate in India. As per the deal, Glenmark will manufacture and supply Remogliflozin while Torrent will market the drug under its own trademark 'Zucator' in India.
• Domestic branded formulations including CRAMs (contract manufacturing and research services) constitute 48% of sales. The acquisition of Elder Pharma’s branded portfolio has added new therapies like neutraceuticals, gynaecology and helped fill up portfolio gaps. The Unichem acquisition has added branded portfolio comprising some power brands besides achievement of long term synergy benefits
During the Q1FY20, US revenue at Rs.376 crore ( up by 13% YoY). 3 ANDAs were filed during the quarter. As on June 30th 2019, 34 ANDAs yet pending for approval and 11 tentative approvals have been received.
• Strong gross margin of 72.4% (a 220 BPS y-o-y improvement) was reported during the quarter
because of better product mix and relaunch of Losar in the U.S. market.
• The company has repaid Rs. 330 crore of debt in Q1FY2020. Debt- equity ratio as on 31st March 2019 is 1.34:1.
• Slowdown in ANDA approvals and USFDA-related regulatory risks
Delay in product launches in Brazil, Germany and the U.S. could restrict growth
• Currency fluctuation
The company continues to be focused on its specialty driven business, productivity improvement, brand building, maintaining high quality manufacturing practices and investments into R&D for a robust future pipeline. According to the management, India, U.S., Brazil and Germany continue to be the focus markets for growth. The company is well capitalized for growth opportunities. Thus, it is expected that the stock will see a price target of Rs.2012 in 8 to 10 months time frame on an expected P/Ex of 39x and FY20 EPS of Rs.51.58.
NIIT Technologies Limited
Target Price: 1599
|Face Value (Rs.)||10.00|
|52 Week High/Low||1540.50/1031.30|
|M.Cap (Rs. in Cr.)||8527.22|
|P/E Ratio (times)||20.79|
|P/B Ratio (times)||4.11|
|P/BDividend Yield (%)||0.00|
• NIIT Technologies is a leading global IT solutions organization. Its growth momentum and encouraging outlook is driven by its ability to win large deals, deliver on complex projects, and enter into strategic alliances or partnerships.
• The top five clients now contribute 27.2% of the total revenue and the top 10 and top 20 contribute 38.8% and 53% respectively of the total revenue. The broadbased growth is reinforced by the number of million dollar plus clients which stood at 91 this quarter after excluding two of GIS clients. Onsite revenues were stable QoQ at 66% of total revenues.
• The order intake story remains positive. It has secured fresh business of US$175 million during the quarter. This number represents the ninth consecutive quarter of increase in order intake numbers. Out of this US$175 million order intake, the US contributed USD100 million; EMEA as a geographical contributed USD58 million and we secured USD17 million from rest of the world. 11 new customers were added during the quarter. The order book executable over the next 12-months has expanded and it now stands at US$395 million.
• The total headcount at the end of the quarter was 10,297. This includes an addition of 275 on account of WHISHWORKS and a reduction of 363 people due to the GIS business divestment. The net increase in headcount on an organic basis was 122 during the quarter. Utilization during the quarter has risen to 80.5% and attrition stood at 12.9%.
• It has reported a strong revenue growth of 4% QoQ in constant currency terms (excl. GIS business impact) Whishworks acquisition contributed +1.2% to the revenue. EBITDA Margin came in at 14.4%
eroded by 313bps QoQ and 142bps YoY. However, Adj. EBITDA margin stood at 17.1%.
• Management believes that the company continues to plan EBITDA margin at 18% levels and stay aligned to it.
• Trimming of IT costs by Clients
• Margin erosion due to escalated offshore staff costs
The company looks strong with steady revenue growth momentum and sustainable margins. The Company continues to plan predictable, robust and profitable growth in future. Restructuring of leadership, strong compensatory scheme and focused strategy for growth has been the key differentiating in string performance of the company. Strong order wins coupled with healthy order pipeline would give on visibility of revenue growth momentum. Thus it is expected that the stock will see a price target of Rs. 1599 in 8-10 months time frame on the current PE multiple of 20.79 times and FY20E EPS of Rs. 76.91.
Source: Company Website Reuters Capitaline
Above calls are recommended with a time horizon of 8 to 10 months.
The stock closed at Rs 2867 on 20th September, 2019. It made a 52-week low of Rs 2300 on 21st August 2019 and a 52-week high of Rs. 3315 on 05th February 2019. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 2810.78
We can see on chart that stock has given the breakout of downward sloping resistance line along with volume. So, it is expected that momentum may continue for some more days. Apart from this, it was forming a “Bull Flag” pattern on daily charts and has given the breakout of same so we are expecting further upside from current levels. Therefore, one can buy in the range of 2830- 2850 levels for the upside target of 3100-3200 levels with SL below 2700.
The stock closed at Rs 1637.95 on 20th September, 2019. It made a 52-week low at Rs 1212.50 on 24th October 2018 and a 52-week high of Rs. 1774.95 on 26th March 2019. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 1558.56
Short term, medium term and long term bias are looking positive for the stock as it is trading in uptrend from past 3 years. Currently, it has formed an “Inverted Head and Shoulder” on daily charts and likely to give the breakout of same along with the volume so buying momentum may continue for coming days. Therefore, one can buy in the range of 1610-1615 for the upside target of 1720-1730 levels with SL below 1560.
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 again closed near weekly highs, data reflects that at current levels there is lot of outstanding short position in Nifty and Index calls and we can expect another round of short covering. As per current derivative data, Nifty can move towards 11900-11950 mark this week as the market undertone remains bullish with support of consistent short covering. Derivative data indicates bullish scenario to continue with Nifty having multiple strong supports at lower levels around 11750 & 11800 spot. Currently Nifty is moving up, with decent addition in open interest and options put writing, which indicates strength in the current trend. Option writers were seen active in recent rally as we have seen put writing in 11700 & 11600 strikes along with the unwinding in calls. Among Nifty Call options, the 12000 strike call has the highest open interest of more than 40 lakh shares, while in put options 11700 strike hold the maximum open interest of more than 25 lakh shares. The Implied Volatility (IV) of calls closed at 21.73% while that for put options closed at 21.00%. The Nifty VIX for the week closed at 19.41% and is expected to remain volatile. The PCR OI for the week closed at 0.63 which indicates call writing. On the technical front, 11750-11800 spot levels is strong support zone and current trend is likely to continue towards 11900-11950 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 (Oct) is trading near its one month low & this downtrend is likely to continue till 5800-5700, if breaks 6000 levels. The reason is that the yield in the current 2019-20 (Jul-Jun) season is seen higher due to favourable rains in the key producing states. Sluggish demand and sufficient arrivals in the spot market may also weigh on prices. Finger turmeric prices are quoting lower at the Erode Turmeric Merchants Association Salesyard. At the Erode, Turmeric Merchants Association Salesyard, finger turmeric sold at Rs.5,589- 7555 and root variety at Rs.5,314-6,809. Last week, jeera futures (Oct) has witnessed a minor pull back after hitting a 5 month low at 16340. In the week ahead, this short covering may remain capped and it may face resistance near 16900 levels, since the sentiments attached to the counter are bearish. Good rains in Gujarat, the largest producer of jeera, have raised expectations of bigger crop in the upcoming season. Prices in Unjha are trading on a weaker note due to sluggish demand from domestic buyers and sufficient stocks. Dhaniya futures (Oct) may continue to consolidate in the range of 6000-6380 levels. The sentiments are dampened due to increased arrivals and tepid buying from stockists. The badami machine clean variety is being sold at 6,900 rupees per 100 kg&the eagle variety at 7,400 rupees. Reports of rise in imports from Russia and Ukraine and expectations of likely rise in sowing in the upcoming Rabi season due to good progress of rains in Rajasthan is also weighing on the counter.
Bullion counter may continue to remain on sideways path as Fed decided to cut rates by 25bps but commentary was not as dovish as expected. Fed cited “uncertainties” about the outlook and pledged to act as appropriate to sustain the economic expansion. Though the U.S. economy continues growing at a "moderate" rate and the labor market "remains strong," the Fed said in its policy statement that it was cutting rates "in light of the implications of global developments for the economic outlook as well as muted inflation pressures. Also the continuous tweets from President Trump to cut rates so as to support his actions of tariffs, seemed to add more pressure on the Fed. Meanwhile Bank of Japan left the interest rate unchanged but BoJ hinted at possible action in October following a slowdown in the global economy. The progress in Sino US trade war will give direction to the prices as U.S. and Chinese deputy trade negotiators resumed face-to-face talks for the first time in nearly two months, as the world’s two largest economies try to bridge deep policy differences and find a way out of their protracted trade war. Gold can test 37000 levels while taking resistance near 38000 levels while silver can test 45600 levels while taking resistance near 47300 levels. Rising geopolitical tensions in middle east will cap the downside in bullion counter as US President Donald Trump’s stated that it looked like Iran is behind the attack but US would not go for war.
Soybean futures (Oct) is looking bullish towards 3850-3900 levels, taking support near 3750-3720 levels. In recent past weeks, the relentless rains that have been pounding several parts of Madhya Pradesh has dashed the hopes of a good crop this season. Due to late sowing, the soybean crop has just started to bear fruit. Now, with extensive submergence, it has turned pale, with no chance of revival in large tracts standing soybean across Hoshangabad, Mandsaur, Indore, Ujjain, Neemuch, Ratlam and other places. According to the weather office, rainfall in MP has been 28 per cent above normal so far. Between June 1 and September 30, the normal rainfall in the state is 952 mm. This year, till Thursday, it was 1,100 mm. On the CBOT, U.S soybean futures (Nov) may trade range bound within $8.85-9.05 a bushel.The market participants would be looking for chances of a breakthrough in theU.S.-China trade negotiation. Traders hope that recent goodwill gestures from Beijing, includinglong-sought U.S. soybean purchases, may move both economies closer to a deal to end the tradedispute. Soy oil futures (Oct) is expected trade with an upside bias in the range of 758-775 levels. The sentiments are upbeat due to improved demand ahead of festivals due next month coupled with crop concerns on standing soybean crop in Madhya Pradesh. In the contrary, CPO futures (Sept) may selling from higher levels towards 545. The sentiments are bearish tracking a drop in related in CBOT soyoil and slowing Malaysian palm oil exports couled with concerns of higher inventories.
Crude oil prices may trade on volatile path as supply disruptions regarding Saudi Arabia oil installations and uncertainty regarding geopolitical tensions in Middle East will keep investors jittery. Saudi Arabian supply risk came into focus on fears of longer-than-expected supply shortfalls. Saudi assurances to market with certain degree of skepticism as reports that workers have just recently been let into Abqaiq, Saudi Arabia is downplaying extent of disruption and doing everything they can to keep markets balanced and tensions tamped down. Crude oil may take support near 4100 levels while taking resistance near 4550 levels. Saudi Arabia’s energy minister has outlined an ambitious timetable for the early normalization of output by the end of the month. The United States and the International Energy Agency have also promised to make additional oil available from their emergency reserves if necessary, all of which has helped calm fears about shortages. Meanwhile in US, Gulf Coast was hit hard by Tropical Storm Imelda as flooding forced a major refinery to cut production and a key oil pipeline, terminals and a ship channel in Texas were shut. Natural gas may witness further profit booking at higher levels as it can test 170 levels while taking resistance near 195 levels. Recently bigger-than-expected storage build and forecasts for less cooling demand next week knocked prices further off their highest in nearly five months. NOAA also reported that the weather in the North East will be warmer than normal over the next 6 -10 days but become milder during the 8- 14 day period.
Cotton futures (Oct) is expected to consolidate in the range of 19200-20200 levels with upside getting capped. India's cotton output for 2019-20 (Oct-Sep) marketing year is seen at36.8 million bales, next year's output would be around 12-15% higher than the market estimate of 32.0 million bales for the current year. The market participants are very optimistic this year as, so far, the condition of the crop is good, with no reports of infestation by pests.In the international market, cotton would trade sideways until & unless there is clarity from the outcomes of U.S. and Chinese deputy trade negotiators resumed face-to-face talks for the first time in nearly two months.The discussions are seen focusing heavily on agriculture, including U.S. demands that China substantially increase purchases of farm commodities. Chana futures (Oct) is likely to trade sideways in the range of 3975-4075 levels. Report of damage to the standing crops on account of heavy rains in Madhya Pradesh has lifted the sentiments of the market participants.It is reported that Monsoon rains in India in the recent week were above average for a third straight week, with floods hitting many districts in the central parts of the country and damaging crops majorly pulses. Castor seed futures (Oct) may witness some retracements facing resistance near 6000 levels.With sowing for the ongoing Kharif season over, castor has emerged as the crop which has logged a jump of 20.15 per cent in Gujarat. It is largely due to a very good monsoon in the state this year and the impressive price that the oilseed fetches to the farmers.
Base metal counter can witness some recovery at lower levels amid positive development in US and China trade war. The People’s Bank of China extended 200 billion yuan ($28.27 billion) of loans from its medium-term lending facility to maintain liquidity but kept the one-year lending rate unchanged at 3.3%. Copper may witness recovery from lower levels as it can test 455 levels while taking support near 440 levels. Peru expects its copper production to grow 27% in the next three years by 2022. Meanwhile, Lead may also remain sideways as it can move range of 151-159 levels. Rising supply outlook after Belgium’s Nyrstar stated that it had temporarily reopened an old lead-processing plant in Australia can support the prices. Zinc may remain on weaker path as it can test 182 levels while taking resistance near 192 levels. Nickel prices can move with upside bias as it can test 1300 levels while taking support near 1200 levels. The global nickel market deficit widened to 6,700 tonnes in July from a revised shortfall of 2,700 tonnes in the previous month. In first seven months 2019, there was a global deficit of 48,200 tonnes compared to a deficit of 100,900 tonnes in same period of 2018, as per INSG. Nickel cash metal was still commanding a significant $105 premium over three-month price. A nickel mining hub in the southern Philippines, which produces mostly high-grade material, has suspended extraction operations indefinitely as the regional government conducts an industry audit. Aluminium can trade with sideways to weak bias as it can take support near 136 while facing resistance near 143 levels.
NICKEL MCX (OCT) contract closed at Rs.1241.20 on 19thSep’19. The contract made its high of Rs.1315.20 on 02ndSep’19 and a low of Rs.1044.00on 05th Aug’19. The 18-day Exponential Moving Average of the commodity is currently at Rs.1223.98.On the daily chart, the commodity has Relative Strength Index (14-day) value of 62.245.
One can buynearRs.1230 for a target of Rs.1300 with the stop loss of Rs. 1195.
COPPER MCX (OCT) contract closed at Rs. 451.45 on 19thSep’19. The contract made its high of Rs. 460.95 on 13thSep’19 and a low of Rs.438.55 on 03rdSep’19. The 18-day Exponential Moving Average of the commodity is currently at Rs. 451.43. On the daily chart, the commodity has Relative Strength Index (14-day) value of 49.701.
One can sell near Rs. 452 for a target of Rs. 432 with the stop loss of Rs. 462.
CPO MCX (OCT) contract was closed at Rs. 564.40 on19thSep’19. The contract made its high of Rs. 579.00on 26thAug’19 and a low of Rs. 531.00 on 06thAug’19. The 18-day Exponential Moving Average of the commodity is currently at Rs. 560.47.On the daily chart, the commodity has Relative Strength Index (14-day) value of 53.191.
One can sell near Rs. 565 for a target of Rs. 535 with the stop loss of Rs 580.
• Electricity futures trading kicks off in Japan with launch of Tokyo Commodity Exchange.
• According to National Bureau statistics “China's zinc output rose by 18.9% YoY to 528,000 tonnes in August”.
• Azerbaijan’s leading gold mining company, Anglo Asian Mining gold output rose 3.3% year-on-year in the first half of 2019 to 34,349 ounces from 33,255 ounces.
• China's Dalian Commodity Exchange has introduced a brand-based system for iron ore contracts slated for delivery September 2020 onwards.
• U.S. homebuilding surged to more than a 12-year high in August as both single- and multi-family housing construction accelerated.
• MCX is to launch 4 ton Kapas futures on sept 30 with delivery in Rajkot.
• Commodity market participants asked Finance Minister Nirmala Sitharaman to consider steps to reduce transaction cost to make Indian markets internationally competitive and improve ease of doing business.
•• MMTC Ltd and NAFED will import 200,000 tn of maize each under the tariff rate quota during the current financial.
The week started with massive wild swings owing to attack on oil field in Saudi Arabia. CRB surrendered some of its gains amid geopolitical tension. Crude prices erupted on the news of attack happened on Saturday and knocked out almost half of Saudi Arabia’s production. The U.S. and Saudi Arabia blamed Iran for the assault, but Tehran denied any involvement. In NYMEX, it hit the high of $63.38 and closed in negative near $59. Crude hit the high near 4550 levels on MCX and closed near 4200 as prices got normalized after US, Saudi and Russia came forward and assured the world to keep supply side smooth. Additionally, crude inventories rose by 1.1 million barrels, compared to the 2 million barrels drawdown that energy analysts had expected. Natural gas prices saw sharp fall from the resistance near 198 levels. Gold saw volatile move throughout the week. However, on Monday it saw gap up opening on the news of attack. Meanwhile, FOMC cut interest rate by 25bps and this stimulated some selling pressure; however market recovered to some extent on the expected retaliation by Saudi on attack. The central bank has two more policy meetings for the year, in October and December, but there is no certainty it would cut rates further. Silver continued to move up marginally and ignored the fall in gold. In COMEX and MCX, both gold silver remained firm. In base metal complex, it was only nickel, which showed some positive momentum otherwise rest of them traded bearish owing to events in Saudi [Arabia] coupled with poor Chinese data. Expectation of deficit in physical market for fourth straight year, hopes of robust demand from electric vehicle (EV) sector and falling stocks at exchange warehouses have all lent support to the nickel prices.
In spices, turmeric turned weaker day by day on higher production issue amid mediocre demand. Rest of the spices viz jeera, dhaniya and cardamom saw some bounce back; supported by improved offtake in spot market. Despite the bearish news of distributing pulses through PDS, chana futures showed some marginal upside. Cotton prices have started rising the past one week due to lower production estimates this year, following reports of crop damage on erratic rainfall and pink bollworm attack on standing crops in major growing regions. After moving in a long consolidation, castor saw good upside last week amid strong fundamentals. Oil seeds and edible oil futures mostly traded up, except mustard on the fear of crop damage due to flood in MP and Maharashtra.
COMTRACK is an electronic web-based system developed and implemented by the NCDEX which facilitates electronic accounting of commodities deposited in the warehouses approved by the Exchange. This is indigenously designed and userfriendly web based application connecting the exchange, warehouses, assayers, members, CPs, investors and clients. NCDEX, in its endeavor to offer better services for everyone associated with the Exchange, has developed this application, which offer unique benefits associated with commodity and warehouse management
Why COMTRACK ?
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• Reduced cost and time for depositors
• Unique lot number for all the deposit
•• On line viewing of warehouse charges
• Stacking and weight tracking information available in detail
• Fungibility between spot and futures
• Secrecy, flexibility, control and confidentiality
• Real time view of warehousing charges
It is thus imperative to note that all clients and members desirous of delivering commodities on the Exchange platform would have to open Accounts in COMTRACK. By designing and implementing its own software application for maintaining electronic record of commodities deposited in the accredited warehouses, the Exchange is not totally dependent on third parties for such services such as NSDL and CDSL for same. The Depository system is basically tuned to cater to the requirements of the securities market. Some of the requirements unique to commodities are not fulfilled by these depositories, such as tracing of original depositor for a particular lot, Flexibility for acceptance of smaller quantities from farmers and On-line calculation and viewing of warehouse charges. The process in COMTRACK is almost similar to the process that is followed in the depository systems of NSDL/ CDSL. COMTRACK is not a depository or a warehouse. It is not covered under the Depository Act or the WDRA. Since NCDEX is regulated by the SEBI, all its activities, systems and processes also come under the ambit of SEBI.
Guaranty of stock shown in COMTRACK
COMTRACK reflects the record of ownership and transactions in respect of commodities deposited in the warehouses approved by the Exchange for the purpose of effecting deliveries in the futures contracts traded on the Exchange platform. The details include commodity, quantity, place of storage, validity certification and other details and parameters as may be prescribed or modified by NCDEX from time to time. The respective warehouse service providers are accountable for the stocks deposited in the warehouses. The Exchange has put in place suitable controls for monitoring the functioning of the approved warehouses. So COMTRACK is also guaranty for the physical presence of stock (Quality and quantity) deposited at the exchange accredited warehouse
Comtrack Participant (CP)
Comtrack Participant (CP) is a bank or a financial institution that has executed an agreement with NCDEX and is approved for opening and maintaining accounts of its clients in the electronic accounting system known as COMTRACK. More than 75 COMTRACK Participants (CPs) have been empanelled in COMTRACK.
|16th SEP||WTI Oil prices had their biggest spike in a decade after drone attack on Saudi.|
|17th SEP||Saudi Oil minister says oil output to be restored by end of the month.|
|18th SEP||FED cuts interest rates by another 25 basis point.|
|19th SEP||BOE warns Brexit delay would hurt growth, after leaving rates unchanged.|
Indian Rupee faced the roller- ride this week. Surge of oil prices due to drone attacks on Saudi's oil facilities lifted the risk premium higher in currency. Later Saudi's efforts to deliver optimistic comments on restoration of oil supplies faded the geo-political risk sentiments. Rupee further caught the positive sentiment after RBI governor spoke about policy easing in the October policy. The Fed’s ratesetting committee on Wednesday cut interest rates 25 basis points as expected. But a deeply split central bank pushed back decisions on whether the US economy needs more monetary easing to cope with trade tensions and on whether it will need to expand its balance sheet to prevent further disruption in the money markets. When the direction is relatively clear, it’s relatively easy to reach unanimity,” said Jay Powell, Fed chairman. “This is a time of difficult judgments, as you can see, disparate perspectives”. Upbeat brexit sentiment pushed higher. Comments from European Commission president Jean-Claude Juncker in which he indicated a Brexit deal remained within reach. Mr Juncker told Sky News on Thursday evening that “we can have a deal” and reiterated that Brussels was willing to replace the controversial Irish backstop, which seeks to avert a hard border on the island of Ireland, if the UK puts forward viable alternatives. Sterling gained 0.4 per cent against the dollar on Friday morning to reach $1.2574 — its highest level since early July — adding to gains made the previous day directly in the wake of Mr Juncker’s comments. Against the euro, the pound was up 0.1 per cent at €1.1350.
USDINR is likely to face resistance near 71.35 and head back lower towards 70.60 in the next week.
USD/INR (SEP) contract closed at 71.3825 on 19th Sep’19. The contract made its high of 72.08 on 17th Sep’19 and a low of 71.09 on 16th Sep’19 (Weekly Basis). The 14-day Exponential Moving Average of the USD/INR is currently at 71.62
On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 48.87. One can sell at 71.50 for the target of 70.90 with the stop loss of 71.80.
EUR/INR (SEP) contract closed at 79.0350 on 19th Sep’19. The contract made its high of 79.60 on 17th Sep’19 and a low of 78.67 on 19th Sep’19 (Weekly Basis). The 14-day Exponential Moving Average of the EUR/INR is currently at 79.24
On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 46.49. One can buy above 78.80 for a target of 79.40 with the stop loss of 78.50.
GBP/INR (SEP) contract closed at 88.8675 on 19th Sep’19. The contract made its high of 89.5275 on 16th Sep’19 and a low of 88.50 on 16th Sep’19 (Weekly Basis). The 14-day Exponential Moving Average of the GBP/INR is currently at 88.48
On the daily chart, GBP/INR has Relative Strength Index (14-day) value of 57.95. One can sell at 89.70 for a target of 88.70 with the stop loss of 90.
JPY/INR (SEP) contract closed at 66.16 on 19th Sep’19. The contract made its high of 66.6575 on 17th Sep’19 and a low of 65.88 on 19th Sep’19 (Weekly Basis). The 14-day Exponential Moving Average of the JPY/INR is currently at 66.73
On the daily chart, JPY/INR has Relative Strength Index (14-day) value of 43.84. One can buy above 66 for a target of 66.60 with the stop loss of 65.70.
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Mutual funds collection via SIP up 7.5% to Rs 8,231 cr in August amid volatile markets
The mutual fund industry managed to garner Rs 8,231 crore through systematic investment plans (SIPs) in August, a rise of 7.5 per cent from the yearago period, despite volatility in equity market. With this, total SIP contribution in the first five months of the current fiscal rose to Rs 41,098 crore as compared to Rs 36,760 crore in April-August 2018, as per the Association of Mutual Funds in India (AMFI). SIP continued to be the preferred route for retail investors to invest in mutual fund as it helps them reduce market timing risk, the industry body noted. As per the latest data, SIP contribution in August stood at Rs 8,231 crore, which was 7.5 per cent higher than Rs 7,658 crore clocked in the same month last year.
Small towns account for 15.3% of MF asset base, Maharashtra biggest contributor
Small towns or B30 cities contributed 15.3 per cent to mutual fund industry's assets under management of Rs 25.64 lakh crore as of August-end, and Maharashtra remained the biggest contributor to the assets base. Over the past few years, markets regulator Sebi has been pushing asset management companies to reach out to small towns for increasing their assets base. According to the Association of Mutual Fund Industry (AMFI) data collated by rating agency Icra, B30 (beyond top 30 cities) accounted for 15.30 per cent of the total industry AAUM in August this year, as against 15.49 per cent in July and 14.48 per cent in August 2018. The balance was contributed by T30 cities, or the top 30 locations in India. The mutual fund industry's total Average Assets Under Management (AAUM) came in at Rs 25.64 lakh crore last month as against Rs 25.81 lakh crore in the preceding month and Rs 25.2 lakh crore in August 2018.
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
Glimpses of SMC participating in Annual Convention on Capital Market & Commodity Market India as Investment Destination for $5 Trillion Economy organised by PHD Chamber of Commerce and Industry (PHDCCI) on Saturday, 14th September, 2019 at Hotel Park, New Delhi.
SMC Global Securities Ltd. organized Investor Awareness Seminar in association with MCX held on Friday, 30th August 2019 at Ahuja Residency vista Signature, Gurgaon.
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