lobal markets in the current quarter recouped almost all of the losses Gincurred in the quarter ending December on the back of dovish tone by major central banks and improve prospects for an end trade war. Uncertainty pertaining to trade talks between U.S. and China would stay put as negotiations may continue for weeks or months. Economic confidence dropped for the ninth month in Euro area. With contraction in Germany’s manufacturing sector and decline in business activity in France, European Central Bank may take more measures to support the downside risks to the region’s growth. China’s Beige book report suggested “an unmistakable first-quarter recovery” in China driven by increased credit. However, the other data from National Bureau of Statistics suggested that the profits of Chinese industrial companies continue to remain in pressure owing to weaker factory inflation, slowing production and seasonal factors.
Back at home, Indian markets continued to strengthen on the back of both global and local factor. Continuation of dovish stance by central banks over the globe, risk reversion by the foreign institutional investors who are putting hoards of money in the Indian equities, expectations of normal monsoon and last but not the least possibility of rate cut by Reserve Bank of India in the ensuing monetary policy committee meeting lifted the sentiments of the market participants. Going forward, trend in the global markets, the movement of rupee against the dollar and crude oil price movement will also be monitored. Investors will keep a watch on inflows from foreign portfolio investors (FPIs) and domestic institutional investors (DIIs). The Nikkei India Manufacturing PMI data for March will be announced on Tuesday, 2 April 2019. The Nikkei India Manufacturing PMI increased unexpectedly to 54.3 in February 2019 from 53.9 in a month earlier.
On the commodity market front, CRB couldn’t sustain at higher levels and saw correction from the higher side of 194. Rise in dollar index were the major reason for the decline in commodities. Bullion counter can continue its selling pressure as stronger greenback coupled with lack of safe haven demand can keep prices downbeat. Worries over global economic slowdown boosted the demand for U.S. Dollar as a safe haven rather than yellow metal. Crude oil prices may extend its upside momentum as ongoing supply cuts led by producer club OPEC and U.S. sanctions against Iran and Venezuela. News of normal monsoon can cap the upside in agri commodities. Euro-Zone Consumer Price Index Core, Retail Sales Advance, ISM Manufacturing, ISM Employment, Durable Goods Order s , ISM NonManufacturing/Services Composite, Change in Non-farm Payrolls and Unemployment Rate of US, Canadian Manufacturing PMI, Unemployment Rate of Canada etc are few data that are scheduled this week, which should be taken care of while trading in commodities.
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• India's wholesale price inflation rose slightly in February, it rose to 2.93 percent year-on-year in February, following a 2.76 percent climb in January. That was above economists' expectation of 2.8 percent.
• Dr Reddy's Laboratories announced launch of Tadalafil tablets, used to treat erectile dysfunction in the US market. The approved products is a therapeutic equivalent generic version of Cialis (tadalafil) tablets which had US sales of about USD 1.7 billion for the most recent 12 months ending in January 2019.
• Lupin has launched Fluocinonide ointment, used to treat inflammatory and pruritic manifestations, in the US market. The ointment is indicated for relief of inflammatory and pruritic manifestations of corticosteroid responsive dermatoses.
• Vedanta Ltd announced an oil discovery in the second exploratory well H2, located in the block KG-OSN-2009/3, Krishna-Godavari Basin, East Coast of India.Theblockpreviouslyhadagasdiscovery inthevery firstwelldrill.The zone from 3,403 metres to 3,431 metres was tested through conventional welltesting(Drill StemTest)andflowedoiltothesurface.
• Kalpataru Power Transmission Ltd has signed a definitive agreement to acquire a 85% equity stake in Linjemontage i Grastorp AB (LMG) for an enterprise value of $24 million. LMG is an EPC firm headquartered in Grastrop, Sweden that operates in three main business areas, comprising substation, transmission and local networks and electricity network services, with revenues of around $75 million in 2018.
• Maruti Suzuki India launched mid-size sedan Ciaz with a new 1.5-litre diesel engine, priced at Rs 9.97 lakh onwards (ex-showroom Delhi).Developed in house, the 1.5-litre engine comes mated with sixspeed transmission and offers improved performance. The company has been utilising Fiat-sourced 1.3-litre diesel power trains with varied power outputs across its current model range.
• TVS Motor Company launched the TVS Apache RTR 160 4V in Colombia. A testimony to the racing legacy of the TVS Apache series, the TVS Apache RTR 160 4V is the most powerful 160cc motorcycle, creating a new benchmark in the segment. The TVSApache RTR 160 4V series is available in three stunning colours, namely, Racing Red, Knight Black and Metallic Blue atthe outlets ofthe distribution partnerin Colombia,AKPMotors.
• U.S. GDP climbed by 2.2 percent in the fourth quarter compared to the previously reported 2.6 percent increase, the Commerce Department said. Economists had expected the pace of growth to be downwardly revised to 2.4 percent.
• U.S. Jobless claims dipped in the week ended March 23rd to 211,000, a decrease of 5000 from the previous week's revised level of 216,000. Economists had expected jobless claims to rise to the 225,000 from the 221,000 originally reported for the previous week.
• U.S.trade deficit narrowed to $51.1 billion in January from a revised $59.9 billion in December. Economists had expected the deficitto shrink to $57.0 billionfromthe$59.8billionoriginallyreportedforthepreviousmonth.
• Eurozone's economic sentiment index fell to 105.5 from 106.2 in February. Economists had expected a score of 105.9. The industrial confidence index dropped to -1.7 from -0.4, and the services measure fell to 11.3 from 12.1.
• Japan Retail sales were up a seasonally adjusted 0.2 percent on month in February, the Ministry of Economy, Trade and Industry said. That missed expectations for an increase of 1.0 percent following the 1.8 percent decline in January
|Stocks||*Closing Price||Trend||Date Trend Changed||Rate Trend Changed||SUPPORT||RESISTANCE||Closing S/l|
|S&P BSE SENSEX||38673||UP||08.02.19||36546||36300||35300|
*Cipla has broken the support of 530 **Hindalco has breached the reisitance of 205
Closing as on 29-03-2019
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.
|2-Apr-19||Adhunik Metaliks||Fund Raising|
|4-Apr-19||GM Breweries||Financial Results/Dividend|
|10-Apr-19||Aditya Birla Fashion||Redemption|
|18-Apr-19||ICICI Lombard General Insurance Company||Financial Results/Dividend|
|20-Apr-19||HDFC Bank||Financial Results|
|22-Apr-19||Mahindra Lifespace Developers||Financial Results/Dividend|
|24-Apr-19||Hexaware Technologies||Financial Results/Dividend|
|25-Apr-19||Axis Bank||Financial Results/Dividend|
|27-Apr-19||Persistent System||Quarterly Results|
|2-Apr-19||Harita Seating Systems||Interim Dividend - Rs 3 Per Share|
|2-Apr-19||CCL Products (India)||Interim Dividend - Rs 1.75 Per Share|
|2-Apr-19||Bharat Gears||Rights 1:7 @ Premium Rs 95 Per Share|
|3-Apr-19||SBI Life Insurance Co.||Interim Dividend|
|4-Apr-19||EID Parry India||Interim Dividend - Re 1 Per Share|
|8-Apr-19||GOCL Corporation||Interim Dividend - Rs 2 Per Share|
|12-Apr-19||India Nippon Electricals||Interim Dividend|
|16-Apr-19||Vesuvius India||Dividend - Rs 7 Per Share|
|26-Apr-19||Sanofi India||Dividend - Rs 66 Per Share|
BHARAT ELECTRONICS LIMITED
Target Price: 114
|Face Value (Rs.)||1.00|
|52 Week High/Low||149.00/72.55|
|M.Cap (Rs. in Cr.)||22526.30|
|P/E Ratio (times)||15.73|
|P/B Ratio (times)||2.67|
|Dividend Yield (%)||2.16|
• BEL is engaged in design, manufacture and supply of electronics products/systems for the defense requirements, as well as for non-defense markets. The company's principal products/services include weapon systems, radar and fire control systems.
• Recently, the company has signed a MoU with Nagpur-based JSR Dynamics which aims at leveraging the individual design and manufacturing capabilities to develop weapons and light weight cruise missiles. Also, BEL has signed an agreement with Hughes India to work on satellite communication solutions for helicopters under the Ministry of Defence. The company has launched its news product- Atmospheric Water Generator (AWG) atAero India 2019 held at Bengaluru.
• Orders received during Q3 FY19 totalled Rs 2,164 crores, showing a jump of 89% YoY. The company had an order book of Rs 48,402 crores at end of Q3 FY19, which was higher by 20% YoY and provides strong revenue visibility for next 3-4 years. Export order book stood at USD 108.90 mn (Rs. 762 crores) at end Q3 FY19. It executed integrated air command and control systems, weapon locating radar, Tropo upgrade, land-based EW system, Electronic voting machine/Voter-verified paper audit trail, L70 gun upgrade, and Shilka upgrade duringQ3 FY19.
• The company has capex plans of 1800 crore over next 2-3 years which would lead to speedy execution of large government orders.
•• The company registered a 8% growth in its revenue for Q3 FY19 to Rs 2,716.49 crores. EBIDTA margin
stood at 28.3% which increased by 1,050 bps YoY. Besides the execution of EVM/VVPAT orders, execution of better-margin orders like IACCS and Weapon locating radar has helped the company to maintain and improve its EBIDTA margins. Furthermore, it remains a debt free company.
• Delay in orders from government
• Private sector intrusion
The company has strong financials and a long history of efficient capital allocation. Apart from its core Defence Business, BEL has diversified into other Sectors like Homeland Security, Solar, Space, Cyber security etc., which has the potential to significantly improve its margins and topline going forward. Thus it is expected that the stock will see a price target of Rs. 114 in 8 to 10 months time frame on a P/E of 17.08 times and FY20 EPS of Rs. 6.65.
INDIAN BANK LIMITED
Target Price: 326
|Face Value (Rs.)||10.00|
|52 Week High/Low||380.00/200.65|
|M.Cap (Rs. in Cr.)||13295.60|
|P/E Ratio (times)||20.67|
|P/B Ratio (times)||0.83|
• The business of the bank has increased 12% YoY to Rs 4,02,711 crore at end of Q3 FY19 driven by 16% surge in advances to Rs 1,76,864 crore. Deposits rose 9% to Rs 2,25,847 crore. The CASA deposits of the bank increased 7% YoY to Rs 78461 crore at end December 2018. The CASA ratio eased marginally to 35.7% during Q3 FY19 compared to 36.6% YoY
• Advances growth was driven by retail loans rising 17% YoY to Rs 30,511 crore while credit to agriculture and MSME increased 26% to Rs 37,286 crore and 19% to Rs 31,808 crore respectively. The corporate loan book of the bank increased 9% to Rs 70,085 crore. Managementhas guidedfor a loanbook growthof 20% in FY19E and 15-18% in FY20E, driven entirely by the Retail,MSMEandAgricultural segment.
• The Bank has recorded 11% increase in the interest earned at Rs 4,823.92 crore, while interest expenses moved up 14% to Rs 3,107.21 crore in Q3 FY2019. NII (Net Interest Income) improved 6% to Rs 1,716.71 crore in Q3 FY19. The NIM (Net Interest Margin) has improved 3 bps YoY to 2.88%. The bank is targeting NIM of above 3% and RoAof 0.4-0.5% for FY2020.
• The fresh slippages of loans stood at Rs 1749 crore while the recovery, upgradations and write-off together were at Rs 885 crore. The management has highlighted that the IL&FS accounts slipped only due to funds from respective escrow accounts not being released to the bank, due to resolution proceedings in the group. With substantial IL&FS exposure recognised, the bank’s major asset quality issue has been addressed.
• The GNPA ratio stood at 7.46% (up by 119bps YoY). The overall stressed assets spiked by 8.8% YoY. The
management has emphasized that, going forward fresh slippages would be limited to Rs. 1,000 crores per quarter over 4Q FY19E and 1Q FY20E, keeping overall GNPAs at ~6% and NNPAs at 3.5-3.6% by FY19E, from the current levels of 7.46% and 4.42% respectively. The bank expects to reduce GNPA ratio below 7% and improve PCR to 65% by end March 2020.
• Unidentified asset slippages
• Regulatory provisioning on assets
The focus of the management of the bank remains on balance sheet diversification. Slippages are likely to moderate over the next financial year and thus we expect the bank to report a gradual recovery in earnings over next 2-3 years. The bank enjoys good capital position and is thus expected to benefit from the improvement in the lending environment. Thus it is expected that the stock will see a price target of Rs. 326 in 8 to 10 months time frame on the P/Bx of 0.87 times and FY20 BVPS of 374.
Source: Company Website Reuters Capitaline
Above calls are recommended with a time horizon of 8 to 10 months.
The stock closed at Rs 1012.55 on 29th March, 2019. It made a 52-week low of Rs 521.25 on 26th October 2018 and a 52-week high of Rs. 1198.40 on 15th May 2018. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 880.13
As we can see on chart that stock has formed an “Inverted Head and Shoulder” pattern on weekly charts, which is considered to be bullish. Last week, it has given the breakout of same and also has managed to close above the same with decent volumes so follow up buying can anticipate from current levels. Therefore, one can buy in the range of 990-1000 levels for the upside target of 1100-1120 levels with SL below 940.
The stock closed at Rs 133.65 on 29th March, 2019. It made a 52-week low at Rs 92.65 on 23rd October 2018 and a 52-week high of Rs. 134.60 on 28th March 2019. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 117.12
After registering yearly low of 93, stock rebounded sharply and trading in higher highs and higher lows on weekly chart which is bullish in nature. Apart from this, it was in consolidation from April 2018 and has given the breakout of same and formed a long bullish candle during last week which indicates buying is more aggressive for the stock. Therefore, one can buy in the range of 129-131 levels for the upside target of 145-148 levels with SL below 120.
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
Long rollover was seen to April series. Average rollover price is in the range of 11500 to 11600. Smart recovery was seen led by short covering from lower levels. Calls writers covered their short positions and put writers were actively selling puts. Maximum put open interest buildup of more than 21 lakh shares is at 11500 puts, which should act as strong support zone. Next week is most likely to trade in the range of 11500 to 11700 with positive bias. Nifty has multiple strong supports at lower levels. Various supports are 11500 & 11450 spot levels. Option put writers were active in recent rally. Put writing is seen in 11500 & 11400 puts. The Implied Volatility (IV) of calls closed at 14.20% while that for put options closed at 14.00%. The Nifty VIX for the week closed at 16.65% and is expected to remain sideways. Among Nifty Call options, the 12000-strike call has the highest open interest of more than 20 lakh shares, and in put side 11500-strike put has the highest open interest of over 20 lakh shares in open interest respectively. The PCR OI for the week closed up at 1.17 which indicates OTM put writing. On the technical front, 11500-11450 spot levels is strong support zone and current trend is likely to continue towards 11700-11750 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 (Apr) is expected to remain stuck in the range of 6000-6250 levels. In days to come, we may see fewer business activities on the spot markets as on account of Mariamman festival, all the turmeric markets will be closed for nine days from 30th March to April 7th. Beforehand last week, the buyer traders have purchased all the good quality turmeric for their demand and some traders have decided to store few bags of best quality turmeric. Also, the stockists are very cautious in buying the turmeric as they feel at present the price may not be improved. On the supply side, the arrival for Erode markets is very low when compared to very heavy arrival of turmeric at Nizamabad. At present Mysore and Dharmapuri turmeric is arriving for sale. Jeera futures (Apr) will possibly witness a rise for the fourth consecutive week to test 15900-16100 levels. This rally is getting fueled by prospects that India's jeera exports in 2018-19 (Apr-Mar) are estimated to rise 4.4% to about 150,000 tn. The fall in output in Syria and Turkey on account of loss of quality due to weather adversities will possibly make India the sole supplier in the international market. So far this quarter, most export deals for Indian jeera have been struck in a range of $2,000-$2,100 per tn. Coriander futures (Apr) is in overbought zone, but regardless it will possibly maintain its upside bias taking support near 6300 levels due to strong demand for the new crop which is of superior quality. Arrivals of coriander with ideal moisture content of 8- 10% have begun, and this had led to a rise in demand.
Bullion counter can continue its selling pressure as stronger greenback coupled with lack of safe haven demand can keep prices downbeat. The U.S. dollar rose versus other currencies following more dovish soundings from central banks and renewed expectations that the European Central Bank will keep rates low for longer. Worries over global economic slowdown boosted the demand for U.S. Dollar as a safe haven rather than yellow metal. The Reserve Bank of New Zealand this week joined a growing list of central banks that have turned dovish amid signs of a slowing global economy, saying its next move in interest rates was likely to be a cut. Gold(June) can further dip lower towards 31100 while facing resistance near 32000 while silver (May) can dip lower towards 36500 while facing resistance near 37800. Recent economic number released from the US showed homebuilding fell more than expected in February, while consumer confidence ebbed in March, offering more evidence of a sharp slowdown in economic activity early in the year. The U.S. third and final reading on fourth-quarter gross domestic product GDP came in at up 2.2%, which was right in line with the consensus forecast and compares to the last 4Q estimate of up 2.6%.On the Brexit front, the U.K. Parliament late Wednesday rejected all eight options offered by Prime Minister Theresa May to break the Brexit deadlock. May’s options moving forward on the matter are increasingly limited, with speculation of a general election being held in the near future.
Aconsolidation can be seen in soybean futures (Apr) in the bandwidth of 3600- 3740 levels. The spread between mustard seed and soybean has dropped significantly in last couple of weeks, making mustard seed more preferential to purchase. During the start of the second week of this month, mustard seed prices were on premium of Rs.225 per quintal compared to soybean price & now it is reduced to Rs.90 per quintal due to surplus mustard stock arrivals, thus making it more attractive oilseed commodity for the buyers. We may see more correction in soy oil futures (Apr) and it may run down to 720 levels. Being a price taker from the international market, it is following the bearish trend of soy oil on CBOT, trading near its two month low of 28.82 cents per pound. In days to come, more selling more may be seen in CPO futures (Apr) & if it breaks the support at 520, then 510-505 will be achieved. This edible oil counter is facing a double whammy of rising inventories in the international market & promotion of ‘palm oil free’ certification in the world food market, hurting its demand. Mustard futures (Apr) is expected to trade with an upside bias towards 3800 levels, taking support in the range of 3735-3710 levels. The demand from crushers at current price levels is likely to improve, as the crush margin pace has gone up. In news, The Haryana State Co-operative Supply and Marketing Federation Limited (HAFED) have decided to procure mustard crop directly from farmers from March 28 to May 10 limiting the role of commission agents (arthiyas) in grain markets.
Crude oil prices may extend its upside momentum as ongoing supply cuts led by producer club OPEC and U.S. sanctions against Iran and Venezuela, which have given crude markets the biggest first quarter price push since 2009. Meanwhile the price surge triggered a call by U.S. President Donald Trump on Thursday for OPEC to boost production to lower prices. Oil prices have been supported for much of 2019 by efforts by the Organization of the Petroleum Exporting Countries (OPEC) and non-affiliated allies like Russia, known as OPEC+, who have pledged to withhold around 1.2 million barrels per day (bpd) of supply this year to prop up markets. Disruptions to Venezuelan exports helped to limit oil price losses in crude oil prices as U.S. sanctions in January which banned U.S. refiners from buying Venezuelan oil, the OPEC member’s main oil export port of Jose and its four crude upgraders were unable to resume operations following a widespread three-day power blackout. Crude oil can further move towards 4300 while taking support near 4000. Natural gas may remain on sideways path as it can take support near 180 levels and resistance near 205 levels. Natural gas inventories remain below the 5-year average the recent warmer than normal weather has eased heating demand. The weather over the next 2-weeks is expected to be warmer than normal. This week, the weather conditions have finally warmed up substantially across Lower-48 states in US. A drop in heating demand was especially pronounced in the Southeast and Southwest parts of the country.
The trend of cotton futures (Apr) has reversed to bearish after last week’s steep correction & day’s ahead we may see more downside of 20800 levels. This drift is happening due to two major influencing factors of declining prices of cotton in the international market & increasing supply pressure in the domestic markets. The Cotton Corporation of India (CCI) has reportedly started offloading cotton procured so far in the current marketing season. Steep rise in prices in open market prompted CCI to start sale. The agency has procured around 1.1 million bales (1 bale = 170 kg) of cotton in the ongoing marketing season that started on Oct 1. The gains in chana futures (Apr) may get restricted from hereon as it may face resistance near 4360 levels. The arrivals of new domestic chana are expected to gain pace in the new financial year. Guar seed as well as Guar gum futures (Apr) are looking bullish as they can reach 4500-4600 and 9200-9300 levels respectively. Coming to the fundamentals of guar, it is being anticipated that exports of the guar gum are likely to be higher in 2018-19. The demand for guar gum has started to rise as a hydraulic fracturing agent after crude oil prices are trading near its 3-month high levels. The market participants are optimistic about more orders to come from the food processing sector. In latest news, a newer guar gum product has been developed & approved for large scale production of potash fertilizers to increase its stability providing better conditioning. It is reported that orders have been received for this new product & these orders are expected to execute during financial year 2019-20.
In base metal counter, copper, zinc and aluminium may remain on buoyant note while nickel and lead can remain in range. Copper may test 455 while taking support near 440. London copper heading for its first quarterly gain since the end of 2017, as hopes of progress in U.S.-China trade talks lent support. State-owned Chilean miner Codelco, the world’s largest copper producer, expects output at its El Teniente mine to rise to more than 500,000 tonnes per year by 2025. China’s top copper smelters last week lowered their floor treatment and refining charges (TC/RC) for the second quarter of 2019 by more than 20 percent, indicating a tighter copper concentrate market. Polish miner KGHM and union representing workers at its Sierra Gorda copper mine in Chile have agreed to extend contract talks, temporarily warding off the threat of a strike, the union president stated last week. Meanwhile Lead may face resistance near 143 levels while taking support near 138 levels. Aluminium may extend upside momentum as it can test 155 levels while taking support near 143 levels. Aluminium surged higher as inventories fell and prices shrugged off another step towards a full restart of Norsk Hydro’s Brazil alumina operations. Zinc may extend its upside as it can test 210 levels while taking support near 197 levels. Zinc has been trading firm on back of tightness in the physical market where cash LME zinc over the 3M was at premium if $56 a tonne from $47 as LME stocks hit a record low of 55,225 tonnes last week. Nickel can trade in range as it can take support near 860 while facing resistance near 920 levels.
GOLD MCX (JUN) contract closed at Rs. 31823.00 on 28th Mar’19. The contract made its high of Rs. 34228 on 20th Feb’19 and a low of Rs. 30684 on 20th Dec’18. The 18-day Exponential Moving Average of the commodity is currently at Rs. 31747.00.On the daily chart, the commodity has Relative Strength Index (14-day) value of 37.407.
One can sell at Rs. 31950 for a target of Rs. 31310 with the stop loss of Rs. 32270.
LEAD MCX (APR) contract closed at Rs. 140.20 on 28th Mar’19. The contract made its high of Rs. 155.05 on 28th Feb’19 and a low of Rs. 137.90 on 27th Mar’19. The 18-day Exponential Moving Average of the commodity is currently at Rs. 142.73. On the daily chart, the commodity has Relative Strength Index (14-day) value of 39.838.
One can buy at Rs. 139 for a target of Rs. 145 with the stop loss of Rs. 136.
COTTON MCX (APR) contract was closed at Rs. 21310 on 28th Mar’19. The contract made its high of Rs. 21880 on 31st Dec’18 and a low of Rs. 20550 on 13th Feb’19. The 18-day Exponential Moving Average of the commodity is currently at Rs. 21394.50.On the daily chart, the commodity has Relative Strength Index (14-day) value of 46.10.
One can sell at Rs. 21510 for a target of Rs. 21000 with the stop loss of Rs 21765.
• China's top copper smelters lowered their floor treatment and refining charges (TC/RC) for the second quarter of 2019 by more than 20 percent.
• China's industrial firms posted their worst slump in profits since late 2011 in the first two months of this year.
• U.S. homebuilding fell more than expected in February as construction of single-family homes dropped to near a two-year low.
• Bank of Japan (BOJ) policymakers debated the feasibility of ramping up monetary stimulus at their rate review this month as heightening overseas risks weighed on the country's fragile economy.
• India's castor oil exports fell 29.3% on year to 39,251 tn in February. - The Solvent Extractors' Association of India
• The Cotton Corporation of India has commenced sale of the commodity procured so far in the current marketing season. The agency has procured around 1.1 mln bales (1 bale = 170 kg) of cotton in the ongoing marketing season that started on Oct 1.
• Production of Malaysian palm oil products for March 1-25 inched up by 0.77 percent compared to the same period a month ago. - Southern Peninsular Palm Oil Millers Association (SPPOMA)
CRB couldn’t sustain at higher levels and saw correction from the higher side of 194. Rise in dollar index was the major reason for the decline in commodities. The U.S. dollar rose versus other currencies following more dovish soundings from central banks and renewed expectations that the European Central Bank will keep rates low for longer. Despite lower than expected US GDP, base metals moved up on lower levels buying amid tight supply issue. However, the upside was capped on metals were also reflecting worries about an accelerated slowdown in the U.S. economy and global growth in general. Copper prices recovered from 3 week low. Nickel prices climbed as expectations of a fourth consecutive year of supply deficit were reinforced by signs of robust demand from stainless steel mills in China. The price of stainless steel continues to rise and supply of ferronickel is very tight. Aluminum prices also rose as , downstream spot aluminium consumers in east and south China showed greater interest in purchasing, compared to earlier in the week, as prices fell. It was not a good week for bullion counter. Gold prices reached a three-week low and silver touched down to a three-month low as the dollar rose to a multi-month high. Gold futures on Thursday suffered from their largest one-day percentage loss since August, settling below $1,300 for the first time in two weeks. In energy counter, crude prices moved up and natural gas prices saw further pressure. Irony is that they reacted negative on their inventories positions. Crude rose despite the buildup in inventory while natural gas prices saw continuous fourth week despite dropdown in inventories. EIA reported Thursday morning that U.S. natural gas stockpiles decreased by 36 billion cubic feet for the week ending March 22.as regards the update on US and China trade talk; U.S. and China are holding high-level trade talks that are taking place in Beijing. The key figures were meeting for dinner Thursday evening. There is no clear consensus on the eventual outcome of the U.S.-China trade talks.
In agri trade, oil seeds and edible oil were bearish in both international and domestic market. Only mustard futures hold gain on the back of procurement by NAFED. Cotton counter saw a healthy profitbooking from higher side after a steep upside. Procurement by NAFED gave timely support to the chana prices; and it saw four week continuous upside. Guar counter was doing well in both spot as well as in futures market on lower production amid improved demand. Though; news of normal monsoon snatched away the gains as guar is very “Monsoon Sensitive” commodity which has negative correlation with monsoon.
The Purchasing Managers' Index (PMI) is an indicator of economic health for manufacturing and service sectors. This is based on five major survey areas: new orders, inventory levels, production, supplier deliveries and employment. The surveys include questions about business conditions and any changes, whether it be improving, no changes or deteriorating. The headline PMI is a numberfrom 0 to 100.A PMI above 50 represents an expansion when compared with the previous month.APMI reading under 50 represents a contraction, and a reading at 50 indicates no change.
How PMI is important
The PMI is an extremely important indicator for investors looking for clues about economic growth. Many investors use the PMI as a leading indicator for Gross Domestic Product (GDP) growth or decline. The Fed and other central banks also use the results of PMI surveys when formulating monetary policy
Purchasing Managers Index provides strong clues for commodities markets as it is highly co-related with the performance of commodities. When PMI number is lower, it suggests the slower manufacturing activity that increases the concern about the demand of such commodities which are the indicator of economic growth i.e. crude oil & base metals. A good reading of PMI enhances the attractiveness of an economy which in turn ignites the demand of fuel.
Correlation between US PMI & Chinese PMI with brent crude
The US PMI & Chinese PMI is major influencing indicator for global growth as well as brent crude prices. Brent Crude are primary benchmarks in oil pricing.
The above chart shows almost 80-90% correlation between US PMI & Chinese PMI with brent crude prices. Above chart show that when PMI reading of both US & China come under 50 during November 2015 to February 2016, the Brent prices nosedived to below $ 35/b. We know that China, the Asian giant is responsible for consuming massive amounts of raw materials-almost 45% copper, 55% of aluminum and second highest consumer of crude oil. China imports majorly Brent crude. Most interesting, the PMI reading of US & China both has impacted the Brent prices significantly. So when the PMI falls in both China and the U.S., the two largest economies in the world, it is not a good sign of economy and for Brent crude also.
Recently on March 22, 2019, Brent oil fell about 2 percent, slipping from 2019 highs as due to grim manufacturing data from Germany and the U.S. reignited fears of a slowdown in the global economy and oil demand.
|25th MAR||RBI is likely to continue bond buying to support heavy borrowing|
|26th MAR||Global Trade took sharp turn down with biggest drop since 2009|
|26th MAR||Former Fed chair Yellen said yield curve may signal need to cut rates, not a recession.|
|27th MAR||Forex swap success gives RBI an alternative liquidity tap|
|28th MAR||May's offer to quit fails to break Britain's Brexit stalemate|
|28th MAR||Three U.S. job gauges to watch as markets project a Fed rate cut.|
Indian Rupee continued its uptrend in the last month of this financial year, although Rupee gave some of its gain amid follow-up buying in US dollar globally. The FIIs flows continued in March with a record boost in equity of over Rs 34,000 crore. This week we witnessed RBI FX swap transactions on 26th of March, as RBI successfully injected Rs 34,561 crore in the system de-routing OMOs purchases. Today most likely subject to approval from Election Commission of India, Government of India announcement of borrowing calendar for the next financial year subject to shooting-up fiscal deficit may halt Rupee appreciation. With respect to EM contagion happened last year, Turkish Lira capture the limelight once again after Central Bank of Turkey (CRBT) forced banks to borrow under overnight repo rate instead of 1- week repo. Further CRBT raises overnight swap rate to 1000% in an effort to halt the slide in TRY. From Brexit front Theresa May encountered another defeat in House of Commons before final exit from European Union which is extended beyond 29th March 2019. Sterling follows the Brexit division between politician and UK voters. Going forward next week US labor data will guide Federal Reserve for policy guidance.
USDINR is likely to stay above 68.80 and approach higher towards 69.70.
USD/INR (APR) contract closed at 69.5475 on 28th Mar’ 19. The contract made its high of 69.6375 on 28th Mar’19 and a low of 69.1150 on 26th Mar’ 18 (Weekly Basis). The 14-day Exponential MovingAverage oftheUSD/INR is currently at 69.68
On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 37.51. One can buy above 69.60 for the target of 70.20 with the stop loss of 69.30.
EUR/INR (APR) contract closed at 78.42 on 28th Mar’ 19. The contract made its high of 78.76 on 25th Mar’19 and a low of 78.07 on 28th Mar’19 (Weekly Basis). The 14-day Exponential Moving Average of the EUR/INR is currently at 79
On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 50.50. One can sell at 78.70 for a target of 78.10 with the stop loss of 79.
GBP/INR (APR) contract closed at 91.5675 on 28th Mar’ 19. The contract made its high of 92 on 26th Mar’19 and a low of 91.09 on 28th Mar’18 (Weekly Basis). The 14-day Exponential Moving Average of the GBP/INR is currently at 91.98
On the daily chart, GBP/INR has Relative Strength Index (14-day) value of 50.74. One can buy above 91.30 for a target of 91.90 with the stop loss of 91.
JPY/INR (APR) contract closed at 63.2125 on 28th Mar’ 19. The contract made its high of 63.5475 on 25th Mar’19 and a low of 62.7350 on 27th Mar’19 (Weekly Basis). The 14-day Exponential MovingAverage ofthe JPY/INR is currently at 63.03
On the daily chart, JPY/INR has Relative Strength Index (14-day) value of 53.93. One can buy at 62.80 for a target of 63.40 with the stop loss of 62.50.
|Offer for sale (Shares)||253,457,280|
|Net Offer to the Public||252,800,000|
|Issue Size (Rs. Cr.)||430-482|
|Price Band (Rs.)||17-19|
|Discount offered to Retail &||Re 0.5|
|Lot Size||780 Shares|
|Total Issue for Sale||253,457,280|
|Promoters & promoters group||100.00%||87.84%|
*Calculated on the upper price band
Book Running Lead Manager
Yes Securities (India) Limited
• Elara Capital (India) Private Limited
• IDBI Capital Markets & Securities Limited
Name of the registrar
Alankit Assignments Limited
Considering the P/E valuation on the upper price band of Rs.19, EPS and P/E of FY2019 are Rs.2.43 and 7.81 multiple respectively and at a lower price band of Rs. 17, P/E multiple is 6.99. Looking at the P/B ratio on the upper price band of Rs.19, book value and P/B of FY19 are Rs. 19.48 and 0.98 multiple respectively and at a lower price band of Rs. 17 P/B multiple is 0.87. No change in pre and post issue EPS and Book Value as the company is not making fresh issue of capital.
About the company:
Incorporated in 2003, the company is in the business of executing all types of railway projects including new lines, doubling, gauge conversion, railway electrification, metro projects, workshops, major bridges, construction of cable-stayed Bridges, institution buildings etc. Company’s major client is the Indian Railways & other clients include various central and state government ministries, departments, and public sector undertakings. Company has an order book of Rs.77,504.2 cr as on December 31, 2018 which includes 102 ongoing projects.
Expertise in undertaking all stages of project development and execution from conceptualisation to Commissioning: The Company has the expertise in undertaking all nature of railway infrastructure projects. The company has contributed to more than 33% of the doubling projects and more than 21% of electrification projects of the total reported by Indian Railways for the last five years (FY13 to Fy17). With 43 project implementation units as on December 31, 2018 across the country, the company operates as a client company to the MoR, and work for and on behalf of the Ministry for execution of various nature of railway infrastructure projects.
Established financial track record: The Company has established a consistent track record of financial performance and growth. The revenue from operations on consolidated basis for the Financial Year 2016, Financial Year 2017 and Financial Year 2018 and the six month period ended September 30, 2018 aggregated to Rs.4539.85 crore, Rs.5915.10 Crore, Rs.7597.35 Crore and Rs.3622.88 Crore , respectively.
Undertaken diverse categories of projects with an asset light model: The Company works on an asset light model. The company provides all the machinery, plants and stores for execution of works. Axis addAAxis as equity in various SPVs formed along with strategic partners, the Company is executing projects by contribution of equity by other partners and by raising debts from financial institutions.
To leverage its position as an executing agency in MoR’s investment plan for ramping of rail infrastructure: TFor 2018-19, the total capital and development expenditure of railways has been pegged at Rs. 148528 crore. Since the company is an executing agency of the MoR for various infrastructure projects, it plans to leverage its existing knowledge and experience in execution of projects for assignment of further projects from the Indian Railways. This will in turn provide the company a platform for greater role in the execution of projects.
Focus on high value projects: The Company has been assigned the hill projects in the difficult terrains of the Himalayas for the construction of the new lines between Rishikesh-Karnprayag in Uttrakhand and Bhanupalli – Bilaspur - Beri in Himachal Pradesh. The new line till Beri is likely to be extended upto Ladakh on strategic consideration, which may be considered for transfer to the company for execution on concurrent basis. The focus of the government on development of infrastructure is apparent by the increase in budgetary allocations and announcement of new schemes to boost infrastructure spending as well as initiatives taken to increase availability of finance to the sector. Hence, in the coming years, it intends to increase its focus on projects with high value, especially in hilly terrains.
• Huge dependency on the MoR
• Hill railway projects constitute a substantial portion of its order book:
• If metro project gets delay
• Its current order book may not be indicative of their future growth
The revenue of the company has shown good improvement in the last 4 years. This is a direct function of improved investments in the railway segment. The railway segment is poised to see growth due to ongoing and the expansion plan. On the pricing front, it is reasonably priced. A long term investors may opt the issue.
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ICICI Prudential Mutual Fund launches Bharat Consumption Fund, offer to end April 9
ICICI Prudential Mutual Fund today launched ICICI Prudential Bharat Consumption Scheme, which will remain open for subscription until April 9. The scheme aims to benefit from the Indian consumption story, considered as one of the fastest growing consumption markets globally. Over the last decade, excluding food, private consumption growth has been higher owing to low-interest rates and easy access to consumer credit, which have been the twin factors driving rapid growth in domestic consumption. Moreover, it has been observed that marginal propensity to consume food tends to decline as income level increases.
Shriram Mutual Fund seeks SEBI approval for large-cap fund
Shriram Mutual Fund has filed draft offer document with Securities and Exchange Board of India seeking approval to launch Shriram Large Cap Fund. The open-ended equity scheme will invest at least 80 percent of its assets in equity and equity-related instruments of large cap companies, while up to 20 percent can be allocated to shares of other market capitalization or in debt and money market instruments. This is the third scheme from the fund house. Till now, Shriram Mutual Fund has filed for Shriram Equity and Debt Opportunities Fund, Shriram Multicap Fund.
Exit Load change in Seven Schemes of DSP Mutual Fund
DSP Mutual Fund has decided to change exit load of DSP World Gold Fund, DSP World Energy Fund, DSP World Mining Fund, DSP World Agriculture Fund, DSP US Flexible Equity Fund, DSP Global Allocation Fund, DSP Natural Resources and New Energy Fund to Nil from 1% for redemption within 365 days with effect from April 01, 2019.
Exit Load change in Nine Schemes of L&T Mutual Fund
L&T Mutual Fund has decided to change exit load of L&T Emerging Businesses Fund, L&T Equity Fund, L&T Focused Equity Fund, L&T India Large Cap Fund, L&T India Value Fund, L&T Infrastructure Fund, L&T Large and Midcap Fund, L&T Midcap Fund from 1% for redemption within 365 days to For units in excess of 10% of the investment,1% will be charged for redemption within 365 days and L&T Business Cycles Fund from 1% for redemption within 540 days to For units in excess of 10% of the investment,1% will be charged for redemption within 365 days with effect from April 01, 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
SMC Global Securities Ltd. has been conferred upon as the “Premier Depository Participant in Gold Category” on Tuesday, 19th March, 2019 at SMC Head Office, New Delhi. The award was presented by Mr. P. S. Reddy (Managing Director & CEO, CDSL) to Mr. S C Aggarwal (CMD, SMC Group) & Mr. Mahesh C Gupta (Vice CMD, SMC Group).
SMC Global Securities Ltd. has been conferred upon as the “Fastest Growing MFI North in BSE Star MF Online 2019” during BSE’s Star MF Redefining MF Distribution held on Thursday, 7th March, 2019 at Russian Culture Center, New Delhi. The award was presented to Mr. Ajay Garg (CEO & Director, SMC Global Securities Ltd.) by Mr. Ganesh Ram (General Manager, BSE Ltd), Mr. Rajeev Garg (Head North, BSE Ltd) and Mr. Dhirendra Kumar (Chief Executive Officer, Value Research).
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Lotus Corporate Park, A Wing 401 / 402 , 4th Floor , Graham Firth Steel Compound, Off Western Express Highway, Jay Coach Signal, Goreagon (East) Mumbai - 400063
Tel: 91-22-67341600, Fax: 91-22-67341697
18, Rabindra Sarani, Poddar Court, Gate No-4,5th Floor, Kolkata-700001 Tel.: 033 6612 7000/033 4058 7000, Fax: 033 6612 7004/033 4058 7004
AHMEDABAD OFFICE :
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Salzburg Square, Flat No.1, III rd Floor, Door No.107, Harrington Road, Chetpet, Chennai - 600031.
Tel: 044-39109100, Fax -044- 39109111
315, 4th Floor Above CMR Exclusive, BhuvanaTower, S D Road, Secunderabad, Telangana-500003
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