In the week gone by, global markets also looked cautious as enthusiasm over good earnings numbers was overcome by the grinding politics of Washington, while Investors remained cautious about ECB and BoJ rate policies ahead of the Fed's policy meeting next week. The Federal Reserve is widely expected to fire the starting gun on paring back its own emergency bond buying program in next week meeting. Investors will be keenly watching the Fed's roadmap for tapering. Meanwhile, the European Central Bank left monetary policy unchanged and pledged once again to keep interest rates at record-low levels until inflation rises back to 2% target by the middle of its projection horizon and holds there on a durable basis. With an election next month, Bank of Japan left monetary policy unchanged while cutting its inflation and GDP forecasts. Retail sales in Japan fell 0.6% in September from a year earlier as consumers limited spending amid concerns over the coronavirus pandemic, reinforcing expectations the world’s third-largest economy stalled in the third quarter.
Back at home, domestic markets rattled weighed by a cross-sector selloff ahead of the expiry of October-series futures and options (F&O) contracts. Besides, the downgrade of Indian equities by global research house Morgan Stanley also spooked the confidence of the investors. Morgan Stanley downgraded Indian equities to equal weight from overweight due to expensive valuations. The September quarter earnings have been a mixed bag, so far, wherein several companies have reported margin pressure due to high commodity prices and supply-side issues. The Nykaa and Paytm IPOs totaling around Rs 24000 cr are likely to witness enthusiastic investor response and this will suck some liquidity from the secondary market. Meanwhile, China imposing price curbs on coal will have implications for global coal and metal prices and this may restrain the movement of metal stocks. The Centre has extended RBI governor Shaktikanta Das’ term for another three years. He will now serve till 2024. The country's foreign exchange reserves surged by $58.38 billion in April-September 2021 to $635.36 billion. Investors will continue to look at the quarterly earnings numbers for stock-specific cues. Besides, money flow, liquidity, Crude prices, and movement of Indian rupee against dollar will continue to guide the direction of the market.
On the commodity market front, CRB has seen a pause in rally after many weeks despite fall in dollar; closed above 253 levels. Dollar index witnessed continuous three-week decline from the high of 94.53 to 93.27 levels. Even US treasury shaded some of its gains. Market participants now await the U.S. Federal Reserve policy meeting due on Nov. 3. The U.S. economy grew at its slowest pace in more than a year in the third quarter raised the concern. Gold and silver are likely to trade in a range of 47200-48800 levels and 63800-66000 levels respectively. All eyes are on the next meeting of the Organization of the Petroleum Exporting Countries (OPEC), Russia and their allies on Nov. 4, with expectation that they will stick to their plan to add 400,000 barrels per day of supply each month until April 2022. NBS Manufacturing PMI, Markit Manufacturing PMI Final, ISM Manufacturing PMI, Fed Interest Rate Decision, Non- Farm Payrolls and Fed Press Conference of US, RBA Interest Rate Decision, Employment Change and Unemployment Rate of New Zealand, BoE Interest Rate Decision, Unemployment Rate and Balance of Trade of Canada etc. are some data and events scheduled this week, which will give much needed direction to the commodities.
SMC Global Securities Ltd. (hereinafter referred to as “SMC”) is a registered Member of National Stock Exchange of India Limited, Bombay Stock Exchange Limited and its associate is member of MCX stock Exchange Limited. It is also registered as a Depository Participant with CDSL and NSDL. Its associates merchant banker and Portfolio Manager are registered with SEBI and NBFC registered with RBI. It also has registration with AMFI as a Mutual Fund Distributor.
SMC is a SEBIregistered Research Analyst having registration number INH100001849. SMC or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing /dealing in securities market.
SMC or its associates including its relatives/analyst do not hold any financial interest/beneficial ownership of more than 1% in the company covered by Analyst. SMC or its associates and relatives does not have any material conflict of interest. SMC or its associates/analyst has not received any compensation from the company covered by Analyst during the past twelve months. The subject company has not been a client of SMC during the past twelve months. SMC or its associates has not received any compensation or other benefits from the company covered by analyst or third party in connection with the research report. The Analyst has not served as an officer, director or employee of company covered by Analyst and SMC has not been engaged in market making activity of the company covered by Analyst.
The views expressed are based solely on information available publicly available/internal data/ other reliable sources believed to be true.
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SAFE HARBOR STATEMENT: Some forward statements on projections, estimates, expectations, outlook etc are included in this update to help investors / analysts get a better comprehension of the Company's prospects and make informed investment decisions. Actual results may, however, differ materially form those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, Impact of competing products and their pricing, product demand and supply constraints. Investors are advised to consult their certified financial advisors before making any investments to meet their financial goals.
The strong business growth and aggressive hiring plans by IT/ITeS will aid in the recovery and growth of this segment. Management believes that the longterm fundamentals for the business and attractiveness of India as a service market remain intact. The retail business continues to exhibit fast recovery. All its malls are now operational, though, with certain restrictions. It is witnessing a steady increase in the footfalls and expects growth in consumption across all the segments. Thus, it is expected that the stock will see a price target of Rs.481 in 8 to 10 months time frame on a target P/BV of 3.10x and FY23 BVPS of Rs.155.18.
commenced production with 8,000nos. of ABS modulators per month which is expected to be ramped up to its capacity level production by July / August 2022.
The company endeavours is to grow through organic and inorganic means, with focus on technology upgradation, quality improvement, cost competitiveness, as well as environment, health and safety. A strong balance sheet and liquidity position enable the company to move forward on its growth journey without any compromises and the Government announced various schemes to strengthen and give the much-needed boost to the automobile sector, with strong focus on curbing air pollution and increase in customs duties of auto components. The company focussed on control over costs, working capital and capex, in order to further strengthen its balance sheet. It is expected that the stock will see a price target of Rs.2087 in 8 to 10 months’ time frame on 2yrs average P/Ex of 33.79x and FY23 EPS of Rs.61.78.
The stock closed at Rs 614.75 on 29th October, 2021. It made a 52-week low at Rs 234.50 on 29th October, 2020 and a 52- week high of Rs. 634.05 on 29th October, 2021. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 510.79.
As we can see on chart that stock was consolidating in wide range of 480 to 600 levels for six months and formed an “Inverse Head and Shoulder” pattern on weekly charts which is bullish in nature. Last week, stock has given the pattern breakout along with good volumes and also has managed to close above the breakout levels. On the technical indicators front such as RSI and MACD are also suggesting buying for the stock. Therefore, one can buy in the range of 605-609 levels for the upside target of 680-700 levels with SL below 570 levels.
The stock closed at Rs 1569.40 on 29th October, 2021. It made a 52-week low of Rs 1100.00 on 03rd May, 2021 and a 52-week high of Rs. 1588.00 on 29th October, 2021. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 1294.73.
Short term, medium term and long term bias are looking positive for the stock as it is trading in higher highs and higher lows on charts. Apart from this, it has consolidated in narrow range for five weeks and formed a “Bull Flag” pattern on daily charts which is bullish in nature. Last week, stock has given the pattern breakout along with high volumes so further upside is anticipating from current levels. Therefore, one can buy in the range of 1550-1555 levels for the upside target of 1700-1730 levels with SL below 1485 levels.
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: RELIABLE SOFTWARE
Charts by Reliable software
Indian markets began November series with negative impression as traders were seen booking profits at higher levels. Nifty and Bank nifty dragged sharply on local bourses as Nifty slipped below 17700 mark while Bank nifty also ended the week with loss of more than 2.5%. Considering the sharp correction seen during last week, we expect market to remain under pressure in coming week as well. On downside, 17500 would act as immediate support for Nifty while 17800-17900 zone could limit any sharp upside. From derivative front, call writers added hefty open interest at 18000 strike while put writers added marginal open interest at 17500 strike. Implied Volatility (IV) of calls closed at 16.61% while that for put options closed at 16.22%. The Nifty VIX for the week closed at 17.91% and is expected to remain volatile. PCR OI for the week closed at 1.21. Technically Nifty has slipped down below its 20 days exponential moving average on daily charts and tested its 50 days DEMA as well which is placed around 17600 levels.
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**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 (Nov) recovered last week and now expected to trade in a range of 6900- 7900 with support at 7100 levels. Currently prices are consolidating above 7000 levels due to persistent demand through the year. Due to expectation of good production in coming season, we have seen prices in downtrend since last few weeks but expectation of better demand from the exports may keep prices supportive. In the first 5-months (Apr-Aug) of FY 2021/22, exports down 25% to 64600 tons Vs last year but at par with 5-year average. Jeera futures (Nov) witnessed positive trade last week and now likely to trade sideways to higher in the range 14700 - 15500 with support at 14770 levels. The festive demand is now slowing down but the export enquiries to support price. Jeera production in Syria and Turkey was limited due to bad weather, which increases demand for Indian cumin. However, exports of jeera for Apr-Aug are down by 12% Y/Y at 1.24 lakh tonnes but expected improve in coming months. During last two months, the prices were higher compared to last year despite sufficient stocks with traders. Dhaniya futures (Nov) witnessed profit booking at higher levels and now expected to trade with negative bias in coming months towards 7700 as resistance is seen at 8100 levels. Traders and stockists are offloading stocks in mandis of Gujarat and Rajasthan due to steady demand, there is prospect of increase in arrivals, and offloading of old stocks as sowing season is nearing. Exports has been down 10% during Apr-Aug period to 21000 tonnes Vs 23300 tonnes last year but 12.7% higher compared to 5-year average. Late monsoon rains in Rajasthan and Madhya Pradesh will see good area under coriander crop in coming season.
Gold prices surged for the third straight weekly gains as weaker U.S. bond yields and dollar bolstered its appeal, with investors focusing on how the Federal Reserve responds to higher inflation and concerns over tepid economic growth. Benchmark 10-year U.S. Treasury yields were set for their biggest weekly decline in three months, reducing the opportunity cost of holding non-yielding bullion. The dollar was headed for a third straight weekly decline, making gold more attractive to buyers holding other currencies. Investors now await the Fed policy meeting ahead in the week on Nov. 3. U.S. Data showed the U.S. economy grew at the slowest pace in more than a year last quarter, while consumers’ inflation expectations over the next 12 months jumped to a 12-year high. European Central Bank President Christine Lagarde acknowledged higher inflation, but pushed back against market bets that price pressures would trigger an interest rate hike as soon as next year. Gold is traditionally seen as an inflation hedge. However, reduced stimulus and interest rate hikes would push government bond yields up, translating into a higher opportunity cost for holding gold, which pays no interest. India's gold demand has seen a 47% year-on-year jump in the July-September quarter to 139.1 tonnes, following a strong rebound in economic activity and recovering consumer demand, the World Gold Council said in a report. Meanwhile, the total gold recycled in India declined by 50%to 20.7 tonnes in the period under review, compared to 41.5 tonnes in the same period of last year. Ahead in the week, gold may trade with sideways to bullish bias where it may trade in the range of 46800-48900 levels. Silver may trade in the range of 63000-66500 levels with positive bias.
Soybean futures (Nov) traded in a tight range last week but seen some positive move in last three sessions. We expect the prices to trade in a broad range of 5000-5500 levels as new season soybean is entering the market. Currently, government is very vigilant in reviewing the implementation of stock limit on Oilseeds and edible oil, which is keeping prices under control. Currently, soybean prices are higher than the MSP of 3950 rupees per 100 kg. The peak arrival delayed by about a month on unseasonal rains. According to SEA, soymeal exports declined sharply to 5,831 tons in September this year from 68,576 tons in the year-ago period. According to SOPA, India's soybean production estimated at 118.9 lakh tons (lt) compared to 104 lt last year. In the monthly report, US production was forecast up 1.79% to 121 mt vs 119 mt last month. Edible oil prices have recovered for second consecutive week on lower level buying and good festive demand. Malaysian palm oil futures were on track for a second straight monthly gain amid concerns about tight supply as prices rose on Friday after two sessions of falls in a row. Since the begin of Oct, edible oil prices in domestic seen correcting due to record imports of edible oil (17 lakh tonnes) in September and expectation of higher imports as government cut duties for both crude and refined edible oils till Mar-2022. However, higher tariff value on edible oils and firm international prices were supporting prices. Ref Soy oil futures (Nov) is likely to trade in range 1220- 1300 with support at 1230 while CPO futures (Nov) likely to trade in range 1190 – 1150 with positive bias.
Crude Oil price headed for their first weekly losses in at least eight weeks after U.S. oil stocks rose more than expected, and Iran flagged it was resuming talks with Western powers which could lead to an end to sanctions. Both benchmarks, touched multi-year highs on Monday were on track to fall about 1% for the week- the first weekly drop in 10 weeks for WTI and for 8 weeks for Brent. The heat has come out of a two-month rally stoked by tight gas and coal prices in Europe and China which had spurred fuel-switching in power generation to fuel oil and diesel while oil supplies were tight. Crude prices were ripe for a pullback, but with an oil deficit that will remain in place well into next year, energy traders will buy most dips if OPEC+ remains disciplined in gradually increasing output. All eyes are on the next meeting of the OPEC+ on Nov 4, and expected that the bloc to stick to its plan to add 400,000 barrels per day of supply each month until April 2022. Ahead in the week price may continue to trade with higher volatility in both direction and the range would be 6000-6500. Natural gas prices rebounded after taking healthy correction. The commodity has been trading higher than 5, 20, 50, 100, and 200-day simple and exponential moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 63.62, which indicates a bullish trend in the price. Ahead in the week prices may continue to trade with higher volatility in the wide range of 395-470 where buy near support and sell near resistance would be good strategy.
Cotton futures (Nov) continues to trade positive and currently trading at record high levels due to physical demand and expect it to trade sideways to higher towards 33500 levels with support at 31200. The CCI increased its rates of cotton sales by Rs 2000 per candy this week in three days. Last week, it was increased by Rs 2,500 per candy. Furthermore, kapas crop damaged due to unseasonal rain and hailstorm, which will affect the quality and the arrival of new crop. Moreover, millers are left with limited stock. Recently, CAI has reduced its final estimate of the cotton crop for 2020-21 by 1.50 lakh bales to 353.00 lakh bales Vs previous estimate of 354.50 lakh bales. Guar seed (Nov) traded higher for the third consecutive week on good export demand and forecast of lower production may keep prices supportive. It is likely to trade higher towards 8000 with major support at 6540. Currently, the prices are higher by 60% y/y due to lower stocks and persistent export demand. The area under guar this season was Rajasthan down by about 2-3 lakh hac compared to last year at 21 lakh hac, lowest acreage in a decade. Guar gum exports expected to pick-up in coming weeks due to increase in US rigs. Castor Seed (Nov) traded positive last week and now is trading at 10 weeks high. We expect the prices to trade higher towards 7100 levels with support at 6500 levels. We have witnessed persistent export demand for castor oil and meal this season keeping prices at higher levels. Castor meal exports up y/y by 16% in first 6- monhts of FY 2021/22 while Castor oil exports for Jul -Aug 2021 down y/y but higher for Apr-Aug period. Due to good area in Gujarat, there is expectation of good production in the coming season.
Base metals may trade in the range on mixed fundamentals. China's state planner has set an immediate price target for thermal coal in its most direct intervention yet to cool the market for the key power-generating fuel, sources told Reuters. The prices may pressurized by weak Chinese factory output, debt problems in the property market, an energy crunch and restricting mobility to curb any outbreaks of COVID-19. Copper may trade in the range 720-770 levels as low exchange inventories may offset fears of weaker demand due to a power crisis in Asia and Europe. Copper prices posted almost 8% in October month, biggest monthly rise since April. ShFE copper inventories were last at 39,839 tonnes, a level unseen since June 2009, while on-warrant LME stockpiles hit their lowest since 1998 earlier in the month before picking up slightly in recent sessions. Zinc can move in the range of 260-295 levels. The global zinc market deficit declined to 14,900 tonnes in August from a revised deficit of 40,400 tonnes in July, data from the ILZSG showed. Lead can move in the range of 180-192 levels. Nickel may trade in the range of 1460- 1540 levels. The price of nickel hit seven-year highs in October on concern about supply as inventories declined and demand boomed for stainless steel and electric vehicles. The global nickel market is forecast to flip from a 62,000-tonne deficit in 2021 to a 78,000-tonne surplus next year. Aluminum may move in the range of 210-230 levels. Aluminium output in China declined for a fifth consecutive month in September. The world's largest aluminium recycler, Novelis, will invest $375 million in its Zhenjiang operation in China to expand recycling and production for aluminium products.
GOLD MCX (DEC) contract closed at Rs. 47961.00 on 28th Oct 2021 . The contract made its high of Rs. 48899.00 on 30th Jul’2021 and a low of Rs. 45705.00 on 30th Sep’2021. The 18-day Exponential Moving Average of the commodity is currently at Rs 47621.07. On the daily chart, the commodity has Relative Strength Index (14-day) value of 57.510.
One can buy near Rs. 47600 for a target of Rs. 48900 with the stop loss of 46950.
LEAD MCX (NOV) contract closed at Rs. 187.40 on 28th Oct’2021. The contract made its high of Rs. 194.65 on 18th Oct’2021 and a low of Rs. 175.40 on 30st Sep’2021. The 18-day Exponential Moving Average of the commodity is currently at Rs. 186.01. On the daily chart, the commodity has Relative Strength Index (14-day) value of 53.389.
One can sell near Rs. 187 for a target of Rs. 177 with the stop loss of Rs. 193
REF. SOYA NCDEX (NOV) contract was closed at Rs. 1260.30 on 28th Oct’2021. The contract made its high of Rs. 1400.90 on 26th Aug’2021 and a low of Rs. 1221.20 on 14th Oct’2021. The 18-day Exponential Moving Average of the commodity is currently at Rs. 1268.36. On the daily chart, the commodity has Relative Strength Index (14-day) value of 45.719.
One can sell below Rs. 1265 for a target of Rs. 1190 with the stop loss of Rs 1300.
CRB has seen a pause in rally after many weeks of pause despite fall in dollar; it closed above 253. Dollar index witnessed continuous three-week decline from the high of 94.53 to 93.27. Even US treasury shaded some of its gains. Benchmark 10-year U.S. Treasury yields were set for their biggest weekly decline since early September, reducing the opportunity cost of holding non-yielding bullion. Gold rose on CME but closed below the psychological levels of $1800 whereas silver took downside after five week of rally. ON MCX, both gold and silver closed down. In energy counter, crude couldn’t sustain near it high of 6428 whereas Natural gas prices saw spiky upside move on lower levels buying. Crude prices fell after U.S. oil stocks rose more than expected, and Iran flagged it was resuming talks with Western powers which could lead to an end to sanctions. The heat has come out of a two-month rally stoked by tight gas and coal prices in Europe and China which had spurred fuel-switching in power generation to fuel oil and diesel while oil supplies were tight. U.S. oil stocks rose much more than expected in the week to Oct. 22, data from the Energy Information Administration showed on Wed. Base metals prices slipped for continuous second week. Shanghai base metals all trended downward amid risk aversion sentiments and China’s curb on the coal prices. High power prices and efforts to curb emissions in China have dampened output of some metals. Aluminium dropped to its lowest in nearly eight weeks on Wednesday as declining thermal coal prices eased supply concerns. Russian aluminium producer Rusal said the aluminium market deficit of 1.1 million tonnes in the first nine months of 2021 compared with a 2.2 million tonne surplus in the same period a year ago.
In agri, guar counter continued its magical move. In three-week time span, guar seed moved from 5800-7100 levels. Gum moved from 10000 to 13500 levels. Mentha tried to make base with little upside. In spices, jeera and turmeric saw a good week prices augmented whereas coriander prices slipped downside. Currently turmeric prices are higher by about 35% Y/Y due to persistent demand through the year. The festive demand is now slowing down but the export enquiries expected to keep jeera prices supportive. This season jeera production in Syria and Turkey was limited due to bad weather which increases the demand for Indian cumin. Cotton saw extraordinary upside move. Oil seeds saw revival in the prices. The peak arrival period this season is delayed by about a month due to unseasonal rains. Edible oil prices have augmented tracking firm the international prices.
Zinc is the second best performing base metal after aluminum so far this year and it has gained more than 32% in MCX and almost 22% in LME. Zinc batteries are quickly emerging as an efficient clean energy-storage solution that can provide renewable electricity in remote regions. As we are transition to a cleaner world, zinc will continue to strengthen, improve and support the modern economy. Additionally, zinc protects steel used to build renewable energy infrastructure.
Global usage of zinc
Global Supply of zinc
World Refined Zinc Metal Balance
Indian Rupee recorded another weekly rise backed by IPO flows as well as retreat in oil prices. Additionally dollar index fell to one month low after US growth numbers for Q3 showed a sharp decline as consumer spending was impacted by the Delta variant and supply chain problems. The economy grew at just 2% - a slowdown from strong 6.7% growth in Q2. Jobs data for the week ending October 23 showed that first-time filers for unemployment benefits fell to a pandemic low. We think USDINR has a scope to fall towards 74.50 in the coming days supported by IPO flows till early next week. From the majors, the pound relatively remains subdued to positive following upbeat economic and fiscal outlook from the Bank of England. Bank of England seems set to tighten by end of year. Going forward next week Bank of England monetary policy meeting as well as Fed’s meeting will guide the GBPINR pair. While EURUSD shot higher following the ECB’s decision to leave rates unchanged. ECB President Christine Lagarde pushed back on market hawks in the press conference and commented “our analysis certainly does not support that the conditions of our forward guidance are satisfied at neither the time of liftoff as expected by markets nor any time soon thereafter.” We think the upside in euro is unlikely to sustain ahead of Fed’s meeting next week.
USD/INR (NOV) contract closed at 75.1550 on 28-Oct-21. The contract made its high of 75.4500 on 26-Oct-21 and a low of 75.0175 on 28-Oct-21 (Weekly Basis). The 21-day Exponential Moving Average of the USD/INR is currently at 75.1550.
On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 52.21.One can buy at 74.75 for the target of 75.75 with the stop loss of 74.25.
GBP/INR (NOV) contract closed at 103.3400 on 28-Oct-21. The contract made its high of 103.9550 on 26-Oct-21 and a low of 103.1050 on 28-Oct-21 (Weekly Basis). The 21-day Exponential Moving Average of the GBP/INR is currently at 102.9942
On the daily chart, GBP/INR has Relative Strength Index (14-day) value of 56.28. One can buy at 103.00 for a target of 104.00 with the stop loss of 102.50
| 29th OCT | Australia refused to defend bond-yield target signalling QE shift |
| 29th OCT | Lenders raised UK mortgage rates as inflation fears take hold |
| 28th OCT | British business must be better at lobbying the EU |
| 28th OCT | Turkey’s interest rate cuts can stabilise lira, central bank governor says |
| 27th OCT | EU step up pressure to dismantle trade barriers |
| 27th OCT | Rishi Sunak unveiled UK Budget focused on ‘new age of optimism’ |
| 26th OCT | European carmakers warned industry risks a repeat of chip shortage crisis |
| 25th OCT | Investors showed fear of central bank errors in short-term bonds |
| 26th OCT | Investors pulled $9.4bn from UK funds in 2021 on rising inflation angst |
EUR/INR (NOV) contract closed at 87.2625 on 28-Oct-21. The contract made its high of 87.8875 on 25-Oct-21 and a low of 87.0325 on 28-Oct-21 (Weekly Basis). The 21-day Exponential Moving Average of the EUR/INR is currently at 87.4067.
On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 45.63. One can sell at 87.50 for a target of 86.50 with the stop loss of 88.00.
JPY/INR (NOV) contract closed at 66.1900 on 28-Oct-21. The contract made its high of 66.3675 on 25-Oct-21 and a low of 65.1000 on 27-Oct-21 (Weekly Basis). The 21-day Exponential Moving Average of the JPY/INR is currently at 66.6418.
On the daily chart, JPY/INR has Relative Strength Index (14-day) value of 38.05. One can sell at 66.50 for a target of 65.50 with the stop loss of 67.00.
(2/5)
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Vautions of Tech Based platforms which have been burning cash to scale up business across the globe has always been debatable. Policy Bazar while has reduced its losses on YoY basis for FY21, still the way to become profitable for the company seems years ahead. In the absence of profit these tech platforms like policy bazar should be valued in the Market Cap/ Revenue and even on this count it is offeredat 48x its FY21 Revenues.
PB Fintech is India's leading online platform for insurance and lending products. The company provides convenient access to insurance, credit, and other financial products and aims to create awareness in India about the financial impact of death, disease, and damage. In 2008, PB Fintech launched Policybazaar aimed at catering to consumers who need more information, choice, and transparency in insurance policies. PB Fintech also launched Paisabazaar in 2014 intending to provide ease, convenience, and transparency in selecting a variety of personal loans and credit cards for the consumers.
Consumer-friendly brands offering wide choice, transparency and convenience: The company offers wide choice, transparency and the ability for Consumers to research and access insurance and personal credit products offered by its Insurer and Lending Partners. Through its Consumercentric approach, it has created strong brands in both Policybazaar and Paisabazaar which is recognised throughout India. The strength of its brands are also reflected in the fact that in Fiscal 2021, 83.0% of the policies sold on Policybazaar and 66.0% of loans originated on Paisabazaar were to Consumers who came to its platform directly or through direct online brand searches. Similarly, in the three months ended June 30, 2021, 82.1% of policies sold on Policybazaar and 54.3% of loans originated on Paisabazaar were to Consumers who came to its platform directly or through direct brand searches.
Brands and Customer Experience Driving Powerful Network Effects: In Fiscal 2020, Policybazaar constituted 65.3% of all digital insurance sales in India by number of policies sold (including online sales done directly by insurance companies and by insurance distributors). Paisabazaar was India's largest consumer credit marketplace with a 53.7% market share based on disbursals in Fiscal 2021. The company provides its Insurer and Lending Partners with access to the large Consumer bases of both Policybazaar and Paisabazaar to enhance their sales.
High renewal rates providing clear visibility into future business and delivering superior economics: Given the strong value proposition, the company offers to its consumers, and the nature of many insurance products, such as health and motor insurance where renewals are common, it is able to benefit from long term retention and visibility of business from existing Consumers with negligible marginal CAC.
Broaden and deepen its Consumer reach in India: The company endeavors to attract new Consumers while deepening its relationship with its current Consumers for both its Policybazaar and Paisabazaar platforms.
Continue to invest in its brands: The company has created strong consumer brands with both Policybazaar and Paisabazaar that the company believes deeply signify trust and its consumer recall. The company will continue to invest in its brand building activities to educate Consumers about insurance and personal credit needs and increase its brand awareness while maintaining its proposition of neutral advice.
Neo-lending strategy to cover innovation and segment gaps: The company aims to co-create and design innovative products to address evolving Consumer needs, enable underserved segments to access credit, build lifetime engagement with consumers and create annuity revenue streams.
Continue to invest in its digital and technology infrastructure: Its technology infrastructure and data analytical capabilities form the foundation of solving core issues for all its stakeholders, namely Consumers, Insurer Partners and Lending Partners. The company will continue to invest in its platforms to ensure a seamless experience packed with convenience, speed and choices for its Consumers, while providing finer data insights to its Insurer Partners and Lending Partners to further improve their service delivery.
Pursue international expansions: The company have begun to expand in the Middle East with operations in Dubai, and the company plan to scale up its operations and brand presence in Dubai and in the broader Gulf Cooperation Council (“GCC”) region by investing in creating a strong brand, building a robust team to cater to the prospective consumers and in its operational capacity including through investments to develop technology and related infrastructure to service consumers in these geographies.
The company provides a wide choice and transparency to customers to research and select insurance and personal credit products. It has strong network effects for PolicyBazaar and PaisaBazaar platforms. As the company will be counted as a Technology platform, market will give it a premium valuation. Moreover the company has high renewal rates and it indicates the trust in such platforms. A long term investor may opt the issue.
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The Securities and Exchange Board of India (Sebi) has proposed to revise the investment norms for mutual fund schemes that invest as per the ESG (Environment, Sustainability and Governance) philosophy. The markets regulator has proposed that from October 1, 2022, asset management companies should only invest in securities with Business Responsibility and Sustainability Report (BRSR) disclosures. The existing investments in the schemes for which there are no BRSR disclosures would be grandfathered by Sebi until September 30, 2023. In ESG investing, a fund manager picks companies whose operations are considered socially responsible. Schemes, which invest in overseas securities, could choose any global equivalent of the BRSR specified by the Association of Mutual Funds in India (AMFI), Sebi said in a discussion paper.
SBI Mutual Fund's newly launched Balanced Advantage Fund has garnered record inflows worth Rs 20,000 crore. This huge AUM has come into the fund in less than three months since the NFO was launched in August. The fund house said that the new fund has got almost 65% inflows from tier II & III retail investors while the remaining from the top 8 cities. SBI BAF raised the highest ever AUM for an NFO in the mutual fund industry in August this year. The fund house also said that through this NFO, it has reached out to 93% pin-code across the country with close to 4 lakh applications across India and added 1 lakh new PANs. The SBI Balanced Advantage Fund is a regular dynamic asset allocation scheme. The fund automatically shifts from equities to debt instruments when equity markets go up substantially and vice-versa.
UTI Asset Management Company Limited (UTI AMC) said it has appointed Anurag Mittal as executive vice-president and the deputy head of fixed income for its mutual fund operations. Mittal joined UTI AMC with over a decade of experience in fund management, dealing and research. He previously held the office of Associate Director at IDFC Asset Management Company and managed key IDFC debt mutual fund schemes. Prior to this, he was associated with HDFC Asset Management Company and Axis Asset Management Company.
The Securities Appellate Tribunal (SAT) has partly stayed a Sebi order, which had directed Kotak Mahindra Asset Management Company to refund a part of the investment management and advisory fees collected by the fund house from the unit holders. In addition, the tribunal has asked the Asset Management Company (AMC) to deposit a sum of Rs 20 lakh within four weeks into an interest bearing account. Sebi, in August, had asked the AMC to refund a part of the investment management and advisory fees collected from the unit holders of the six Fixed Maturity Plan (FMP) schemes with 15 per cent interest per annum. In addition, the Securities and Exchange Board of India (Sebi) imposed a penalty of Rs 50 lakh on Kotak Mahindra AMC and barred the fund house from launching any new FMP scheme for six months for violating the regulatory norms.
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