In the week gone by, global market witnessed the volatile movement due to the I continuous fall in technology-related shares in US Markets and the government data showing high levels of weekly jobless claims, spooked the confidence of the investors. Market also took cautious approach after the head of the US Federal Reserve warned about the "uncertain" outlook for the virus-hit US economy. The central bank indicated interest rates were unlikely to begin rising for another three years, allowing businesses to borrow at ultra-low levels, Powell's call for more fiscal help came as US lawmakers seem unable to find common ground on a new package. On the flip side, the European Central Bank announced it was offering additional temporary relief to banks to help them cope with the impact of the coronavirus pandemic, easing requirements on the capital they are required to hold. The Bank of England kept its main interest rate unchanged at the record low of 0.1 percent on Thursday as it gauges the strength of the economy's recovery from recession and what the U.K.'s future trade relationship with the European Union will be. Japan’s core consumer prices fell at their fastest pace in almost four years in August, underscoring deflation risks and difficulties the country’s new prime minister faces in restoring growth in the world’s third-largest economy.
Back at home, the Indian stock market also remained volatile tracking cautious global cues, reacting to the cautious outlook from central banks in the United States, England and Japan. Meanwhile, ratings agency ICRA said high frequency lead indicators for August suggest a fragmented recovery of the Indian economy is under way. The Nomura India Business Resumption Index, which monitors economic activity normalisation, rose to 81.6 from 79 in the week ended September 6. Separately, S&P Global Ratings said India’s economy will likely contract 9% in FY21 from a previous estimate of -5%. Still, that was less steep than cuts forecast by its peers following the June quarter’s 23.9% contraction. In another development, the Reserve Bank of India has mandated banks to fully automate non-performing assets (NPA) classification and provisioning calculation process. The Centre will infuse Rs 20,000 crore in PSU banks through bonds in FY21 and spend an additional ₹1.67 lakh crore on Covid relief measures announced earlier. FM Nirmala Sitharaman has sought Parliament’s nod for gross additional expenditure of ₹2.36 lakh crore, presenting the first batch of supplementary demands for FY21. Going forward, market will continue to track domestic as well as global factors for direction.
On the commodity market front, after two week fall, CRB saw some rebound on fresh buying in crude and other commodities, nevertheless the upside was capped near 151 levels amid rising number of COVID 19. Gold moved down after the Federal Reserve said U.S. interest rates will likely stay near zero for another three years — a pledge that ended up benefitting the dollar instead and exposing. Some fresh buying may return in bullion counter on value buying. Gold and silver should trade in a range of 50500- 52500 and 67000- 70000. Natural gas is little bearish on weak trading activities in physical market in US. It should take some support from lower level and can touch 195-200 in days to come. Crude prices moved up after Saudi Arabia ratcheted up the pressure on OPEC+ members to adhere to their production quotas. Interest Rate Decision of Newzeland, Markit Manufacturing PMI Flash and Durable Goods Orders of US, GDP of Spain, Consumer Confidence of Germany, Interest Rate Decision of Switzerland etc are few important data scheduled this week.
SMC Global Securities Ltd. (hereinafter referred to as “SMC”) is a registered Member of National Stock Exchange of India Limited, Bombay Stock Exchange Limited and its associate is member of MCX stock Exchange Limited. It is also registered as a Depository Participant with CDSL and NSDL. Its associates merchant banker and Portfolio Manager are registered with SEBI and NBFC registered with RBI. It also has registration with AMFI as a Mutual Fund Distributor.
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SMC or its associates including its relatives/analyst do not hold any financial interest/beneficial ownership of more than 1% in the company covered by Analyst. SMC or its associates and relatives does not have any material conflict of interest. SMC or its associates/analyst has not received any compensation from the company covered by Analyst during the past twelve months. The subject company has not been a client of SMC during the past twelve months. SMC or its associates has not received any compensation or other benefits from the company covered by analyst or third party in connection with the research report. The Analyst has not served as an officer, director or employee of company covered by Analyst and SMC has not been engaged in market making activity of the company covered by Analyst.
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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.
With the strong position in the domestic formulations market, growing presence in the international generics segment, and healthy financial performance. The management of the company expects the momentum would improve further with the efforts towards cost optimization and process improvement which would give steadily growth to the financials. Thus, it is expected that the stock will see a price target of Rs.1127 in 8 to 10 months’ time frame on an expected P/E of 24x and FY21 EPS of Rs.46.94.
The company is doing well and Q1FY20 has been a good quarter for the company due to adoption of innovative technological tools, self-reliant model, strong brand, on time delivery, robust balance sheet, presence in major cities, availability of sufficient liquidity and huge land bank for future growth. The management of the company strongly feels that the company is well equipped to face the recent challenges. Moreover, Real estate sector is expected to perform better due to all time low housing loan interestrates,inherent demand for housing, various tax exemptions under income tax, CLSS (Credit linked subsidy scheme) scheme & other government benefits. Thus, it is expected that the stock will see a price target of Rs.329 in 8 to 10 months time frame on an expected P/BVx of 1.20x and FY21 BVPS of Rs. 274.04.
The stock closed at Rs 251.05 on 18th September 2020. It made a 52-week low at Rs 98.10 on 23rd March 2020 and a 52-week high of Rs. 254 on 18th September, 2020. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 180.33
Short term, medium term and long term bias are looking positive for the stock as it is trading in higher highs and higher lows sort of “Rising Channel” on weekly charts, which is bullish in nature. Apart from this, technical indicators such as RSI and MACD are also suggesting buying for the stock. Therefore, one can buy in the range of 245-248 levels for the upside target of 275-280 levels with SL below 232.
The stock closed at Rs 1334.70 on 18th September 2020. It made a 52-week low of Rs 1000.00 on 19th March, 2020 and a 52-week high of Rs. 1895.45 on 07th February, 2020. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 1379.34
After giving decent correction from yearly high, stock got floored and made yearly low in single down swing. Then after, stock recovered sharply from lows and consolidated in wide range with positive bias and formed a “Triangle Pattern” on weekly charts, which is considered to be bullish. Last week, stock managed to close on verge of breakout of pattern with high volumes so buying momentum may continue for coming days. Therefore, one can buy in the range of 1310-1316 levels for the upside target of 1440-1470 levels with SL below 1260 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
Once again weakness in banking stocks continued to weigh on Indian markets as bank nifty settled the week with loss of more than 1.50% while nifty struggled to breach 11600 mark on local bourses. Among sectors Private Bank, along with PSU Bank and Financial Services suffered losses while pharma along with IT counter rallied the most. From derivative front, tug of war continued between call writers at 11600 strike and put writers at 11500 strike. The Implied Volatility (IV) of calls closed at 18.45% while that for put options closed at 19.07 The Nifty VIX for the week closed at 20.10%. PCR OI for the week closed at 1.21slightly down from the previous week indicating put unwinding in OTM and call writing. For coming week, it is expected that market will continue to remain volatile once again with banking index continues to feel pressure. Nifty is expected to struggle to surpass 11600 marks. Bulls may make a comeback only if nifty move beyond 11600 mark next week.
**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 (October) is posing a lower closing since past three weeks, which depicts that the demand side is weak due to which in days to come we might see a downside of 5700, facing resistance near 5960. Due to poor demand and also low quality, buyers are cautious and quoting decreased price on the spot markets. The demand for the both varieties of turmeric this season is very poor and hence sales have been on the lower side. At the Erode Turmeric Merchants Association sales yard, finger turmeric was sold at Rs. 4,911-5,889 a quintal, root variety was sold at Rs.4,614-5,689. At the Erode Cooperative Marketing Society, finger turmeric was sold at Rs. 4,751-6,269 a quintal, root variety was sold at Rs.4,525- 5,859 a quintal. Jeera futures (October) is expected to nosedive towards 13600, facing resistance near 14170. There is an expectation that the sowing area may increase this season. But, this year cumin will also face a tough competition against mustard & chana, as both of these commodities have shown a good performance. Also, higher to steady arrivals and weak demand is dragging jeera prices southwards on the spot market. The Unjha mandi is registering arrivals of nearly 14,000 bags. NCDEX quality was quoted at Rs 2225-2350 per 20 Kgs. Best quality and Bombay Bold prices is being priced at Rs.2400-2500 and Rs.2550-2650 per 20 Kgs, respectively. Dhaniya futures (October) may witness correction towards 6300, facing resistance near 6750. It is to be noted that coriander prices at Kumbhraj mandi and Guna mandi of Madhya Pradesh quoting lower as the mandis are witnessing higher arrivals of coriander of about 8,000 bags.
Bullion counter has been trading in the sideways territory as traders were cautious about the Fed meeting. The U.S. Federal Reserve disappointed expectations for further stimulus to spur inflation and support the economy, battered by the coronavirus crisis. The gold market was somewhat disappointed by the lack of outlook or guidance (about) what the Fed would do in order to spur inflation. The Fed also stated that it expected a faster economic recovery than previously forecast, with unemployment falling more quickly than it had expected in June. However, keeping a floor under nonyielding gold, the Fed pledged to keep rates pinned near zero levels until inflation was on track to "moderately exceed" its 2% inflation target "for some time". Near-zero interest rates globally and demand for a hedge against perceived inflation has helped gold to gain about 28% so far this year. Despite the fact that the Fed was quite dovish, it would seem that for the gold market it wasn’t dovish enough. There is concern that with no more Quantitative Easing, there might be less momentum for gold. Meanwhile, the Bank of Japan kept monetary policy steady and suggested there would be no immediate expansion of stimulus. Gold had already done a lot of the "heavy lifting" yearto-date, and would not go much higher or lower. The best indicator that momentum has come off gold is in the Exchange Traded Funds. This week, gold may trade in the range of 48700-52900 and Silver may trade in the range of 63300-71800. Whereas on COMEX gold may trade in the range of $1910-$2000 and Silver may trade in the range of $25.80-$29.40.
Soybean futures (October) may trade with an upside bias in the range of 3900- 4100 despite weak export figures of soymeal & being supported by owing to bullish cues from the international market. On CBOT, U.S soybeans have been on an uncharacteristic run over the last several weeks, breaking through double-digit prices for the first time in the U.S.-China trade war era. Between September and December, China would book at least a million tonnes of U.S. beans per week, on average. If the minimum 2020-21 target was to match the record 36 million tonnes, the balance could be sold by the end of 2020 by notching weekly Chinese commitments around 1 million tonnes. Mustard futures (October) facing resistance near 5400 may continue to witness correction and move lower towards 5200-5150. Due to negative crush margin of Rs.151 per quintal and lesser demand from millers at higher rates, we may not see further gains in this counter. Soy oil (October) is expected to continue its bull-run & test 960-980, while CPO (Sept) may continue to witness gains & move higher towards 820-830 levels. In the domestic market, the upside rally in edible oils is being fuelled by the higher moves of U.S soy oil on CBOT. The surge in online orders during the pandemic has boosted demand for trucks in U.S, which usually run on diesel and its green alternatives. That’s where demand for soybean oil comes into picture which has rallied almost 40% since a low in March, when lockdowns from New York to Los Angeles hit demand for most commodities. The U.S. Department of Agriculture is already forecasting its use to make biodiesel will jump more than 3% this season after declining a year earlier.
Crude Oil prices posted gains as it is estimated that the market is in deficit and a new storm started building in the Gulf of Mexico, putting crude on track for a weekly gain of about 10%. Both contracts have risen sharply after Hurricane Sally cut U.S. production and OPEC and its allies laid out steps to address market weakness. It is expected that the market would be in a deficit of 3 million barrels per day (bpd) by the fourth quarter and reiterated its target for Brent to reach $49 by the end of the year and $65 by the third quarter of next year. Meanwhile, a tropical depression formed in the western part of the Gulf of Mexico and could become a hurricane in the next few days, potentially threatening more U.S. oil facilities. The Saudi Arabian energy minister also fired a shot at traders warning them not to bet against the oil market and pledging those who gamble on oil prices would be hurt “like hell.” OPEC+ said the group will take action on members that are not complying with deep output cuts to support the market following a coronavirus-led slump in fuel demand. This week we may witness buying pressure in crude oil. If it sustains below 3040 & it may take support near 2820 and may face resistance near 3280. Natural gas plunged amid intensifying imbalance concerns and escalating worries about looming storage surpluses as summer cooling needs dwindle. The hefty increase indicated that domestic industrial energy demand and U.S. liquefied natural gas (LNG) volumes, while improving, need to accelerate to offset waning cooling demand as temperatures decline. This week Natural gas may trade in wider range of 130-170.
Cotton futures (Oct) is in overbought zone and we may witness some correction towards 17800-17700, if it doesn’t surpass the resistance near 18070 levels. The ground report cites that crop in north India is excellent. The crop condition so far remains good with no reports of infestation or any major damage due to excess rains. Secondly, the new crop arrivals have started hitting the spot markets in north India and are likely to gain momentum in October. We will possibly continue to see lower level buying in chana futures with every dip as there are concerns on the supply side. Reports of damage to the standing urad and moong crop have also come in from Madhya Pradesh. Secondly, while the crop is yet to arrive in the market, delay in issuing import licences has also pushed up prices. Overall, the October contract is expected to trade with an upside bias in the range of 5000-5300 levels. Guar seed futures (Oct) is expected to trade sideways to down in the range of 3900-4200; while guar gum futures (Oct) may consolidate in the range of 5900-6400. A sluggish trend is prevailing in various guar seed and guar gum market in Rajasthan and Haryana. The market participants on the spot markets are cautious, not quoting higher rates as they are expecting arrivals to catch pace in days to come. Secondly, demand side is still a worry for the guar gum producers. On the other hand, weather conditions will be watched closely. Guar crop needs rain at current stage of progress. If high temperature and dry climate persists for next few days in guar producing area of Rajasthan and Haryana, crop and productivity will be affected.
Base metals may trade in the range as fading hopes of a new U.S. fiscal stimulus, slow U.S. labour market recovery, geopolitical tension and grim outlook on global economic recovery may weigh on prices. But prices may get support due to weaker dollar and strong fund buying on hopes that Chinese stimulus would spur demand in the world’s biggest metals consumer. Data showed recovery in the U.S. labour market stalling amid disappointment that the Federal Reserve made no new monetary easing commitments at its meeting last week. Demand for refined copper in China continues to ease, with premiums falling to $59, the lowest since the start of April, extending a decline from highs of $100 six weeks ago. The WTO said the US had breached global trading rules by imposing tariffs on China, drawing anger from Washington. Copper can move towards 515 by facing resistance near 540. Zinc may test to 200 with support near 185. The discount of cash zinc to the threemonth contract on the LME shrank to $21.40 a tonne from $31 earlier this month, suggesting tighter nearby supply. Lead can move in the range of 142- 152. Nickel may test 1150 by taking support near 1080. Nickel is expected to see a surge in demand over the coming years, as agencies and companies seek to use it as a means of cutting noxious emissions by fossil-fuel vehicles. As sales of electric vehicles improve over the next decade, forecasts suggest that nickel demand will rise from 139,000 tons to 1.4 million tons by 2030. Aluminum may trade in the range of 141-150. The Trump administration said it will remove its 10% U.S. tariffs on raw Canadian aluminum.
NICKEL MCX (SEP) contract closed at Rs. 1107.70 on 17th Sep’2020. The contract made its high of Rs. 1158.40 on 02nd Sep’2020 and a low of Rs. 1027.50 on 28th Aug’2020. The 18-day Exponential Moving Average of the commodity is currently at Rs. 1112.50. On the daily chart, the commodity has Relative Strength Index (14-day) value of 49.784.
One can buy near Rs. 1100 for a target of Rs. 1150 with the stop loss of Rs. 1075
CRUDE OIL MCX (SEP) contract closed at Rs. 3024.00 on 17th Sep’2020. The contract made its high of Rs. 3285.00 on 05th Aug’2020 and a low of Rs. 2672.00 on 08th Sep’2020. The 18-day Exponential Moving Average of the commodity is currently at Rs. 2957.99. On the daily chart, the commodity has Relative Strength Index (14-day) value of 53.383.
One can buy near Rs. 2970 for a target of Rs. 3280 with the stop loss of Rs. 2820
DHANIYA NCDEX (OCT) contract was closed at Rs. 6608.00 on 17th Sep’2020. The contract made its high of Rs. 7076.00 on 31st Aug’2020 and a low of Rs. 6560.00 on 14th Sep’2020. The 18-day Exponential Moving Average of the commodity is currently at Rs. 6719.50. On the daily chart, the commodity has Relative Strength Index (14-day) value of 38.522.
One can sell below Rs. 6560 for a target of Rs. 6250 with the stop loss of Rs 6715.
After two week fall, CRB saw some rebound on fresh buying in crude and other commodities, nevertheless the upside was capped near 161 levels amid rising number of COVID 19. The COVID19 pandemic continues to grow, dampening the global economic climate, though potential vaccines, suggested to be available close to the end of the year or early next year, are giving rise to some general optimism.In a major event, the Fed pledged to keep rates near zero until the labour market reaches "maximum employment" and inflation is on track to "moderately exceed" the 2% inflation target.The dollar edged up against major currencies following the U.S. Federal Reserve's upbeat assessment of the economic recovery and as its increased tolerance for higher inflation push bond yields higher. Bullion counter was trying to make a base, though it gave up some early gain of the week after Fed meet. Gold was down as a stronger dollar pulled the yellow metal back from their two-week high. Better-than-expected U.S. unemployment figures were behind the improved dollar.In energy counter, natural gas saw sharp fall whereas oil saw both side of move. Oil prices fell on Thursday, after rising in the two previous sessions, as concerns about weak fuel demand re-emerged after production platforms in the southeastern United States took steps to resume output following Hurricane Sally's passage. Prices were also dragged lower by a bigger-than-expected rise in U.S. distillate stockpiles, which include diesel and heating oil thatraised concerns about fuel demand in the world's biggest economy and fuel consumer.Though it moved up again after Saudi Arabia ratcheted up the pressure on OPEC+ members to adhere to their production quotas.Natural gas prices couldn’t sustain at higher prices on decline in demand. Natural gas consumed for power generation declined by 7.8% week over week. Natural gas exports to Mexico decreased 1.8%. Base metals were sideways with some downside bias after Fed’s Jerome Powell said he is unsure the faster-than-expected recovery will continue. Base metals futures pointed lower ahead of U.S. housing starts, building permits and the Philadelphia Fed business outlook.
Sharp upside move we saw in oil seeds and edible counter as international market turned firmed. U.S. soybean production would be smaller than previously expected because of unfavourable weather last month. Loss of crop news in Madhya Pradesh amid ongoing festival season also supported the upside in these futures, CPO is just few points shy away from 800 marks. Mustard was little weak. It came under pressure because Soybean of new season will pick up in the market very soon. Cotton was, moreover, on weaker side. In Madhya Pradesh, currently the cotton being offloaded in various mandis have reasonably high moisture content level at 30- 35%. Despite reports of damage to summer cotton crops on account of rains and inclement weather condition, overall crop condition appears to be good.
Recently natural gas futures prices saw huge volatility as the prices sky rocketed to nine-month high of above $2.7 per MMBtu in NYMEX on August 28, 2020. Hotter weather has helped lift natural gas prices by nearly 75 percent since late June when they hit their lowest level since 1995. The rapid climb had started two months ago, when hot temperatures had air conditioners on full blast and the global economy began to reopen, pushing up demand from facilities that liquefy gas. The Prices crossed the level of 200 in MCX also. After that the prices of natural gas futures are easing down on weather forecasts indicating temperatures will decrease over the next few weeks throughout the Northeast and Midwest.
That price decline came despite a continued rise in liquefied natural gas exports and a drop in output to its lowest in over two years after producers’ shut-in wells before Hurricane Sally smashed into the Gulf Coast. Sally knocked out power to over 430,000 homes and businesses in Alabama and Florida when it hit the Alabama coast last week. With cooler weather coming, Refinitiv projected demand, including exports, would fall from 85.2 bcfd this week to 81.8 bcfd next week.
However, the amount of gas flowing to U.S. LNG export plants has averaged 5.3 bcfd so far in September. That was the most in a month since May and was up for a second month in a row for the first time since hitting a record 8.7 bcfd in February as global gas prices rise, making U.S. gas more attractive following months of U.S. cargo cancellations due to coronavirus demand destruction. Cameron LNG's export plant in Louisiana, however, has remained shut since Aug. 27 due to lingering power outages from Hurricane Laura. Some analysts say the plant could remain shut through mid October.
India may see the share of natural gas in its energy basket rise to 10 per cent by 2025 as a result of massive investment push in the creation of infrastructure to take the environment-friendly fuel to consumers. Currently, natural gas makes up about 6.2 per cent of the entire energy consumption in the country. Prime Minister Narendra Modi has set a target of raising the share of natural gas in the energy basket to 15 per cent by 2030 to cut carbon emission in the economy.
Indian rupee largely remains subdued this week except some negativity emerged out from choppier move in Indian equities as well as some tweaks from latest Fed meeting. Admittedly bulk flows from fund raising by domestic companies over $33.3 bn since early January this year which set the stage for rupee to rise beyond 74.00. However Federal Reserve latest monetary policy guidance which is somehow positive for dollar in short term as well as sell-off in global equities may cap the rally in rupee. The biggest attraction in Forex space encountered yesterday when Sterling weakened sharply after the Bank of England surprised investors by noting it is examining how negative interest rates might be implemented. The currency dropped 0.6 per cent against the dollar to trade as low as $1.2882 and it lost a similar amount against the euro to trade at €1.0928. Interestingly meeting minutes revealed that BoE officials had been briefed on the central bank’s plans “to explore how a negative Bank Rate could be implemented effectively, should the outlook for inflation and output warrant it at some point”. The prospect of negative rates has typically met a cool response among policymakers who are mindful of the negative side-effects of the move in other parts of the world. But the latest statement offered a reminder that more quantitative easing, or bond buying, is not the only move left open to the BoE. We think based on outcome of further rounds of Brexit negotiations will give proper direction in sterling in coming days.
USD/INR (SEP) contract closed at 73.7100 on 17-Sep-20. The contract made its high of 74.1875 on 14-Sep-20 and a low of 73.3575 on 14-Sep-20 (Weekly Basis). The 21-day Exponential Moving Average of the USD/INR is currently at 73.94.
On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 42.37. One can sell at 74.10 for the target of 73.40 with the stop loss of 74.60.
GBP/INR (SEP) contract closed at 95.3075 on 17-Sep-20. The contract made its high of 95.6775 on 17-Sep-20 and a low of 94.0525 on 14-Sep-20 (Weekly Basis). The 21-day Exponential Moving Average of the GBP/INR is currently at 96.47.
On the daily chart, GBP/INR has Relative Strength Index (14-day) value of 37.82. One can sell at 95.70 for a target of 94.70 with the stop loss of 96.30.
|14th SEP||India's retail inflation eases in August as food prices rise more slowly|
|14th SEP||Indian government to infuse $2.72 billion in state-run banks|
|14th SEP||S&P expects India's economy to contract 9% in fiscal 2021|
|15th SEP||Rising UK unemployment pressures Sunak to renew job support|
|17th SEP||Fed touts economic recovery, vows to keep interest rates low|
|17th SEP||BOJ backs new premier's focus on jobs, signals readiness to ease more|
|17th SEP||Bank of England looks harder at negative rates in case troubles deepen|
|17th SEP||Bank of England maintains interest rates at 0.1 percent|
EUR/INR (SEP) contract closed at 86.9725 on 17-Sep-20. The contract made its high of 87.7300 on 15-Sep-20 and a low of 86.6400 on 17-Sep-20 (Weekly Basis).The 21-day Exponential MovingAverage ofthe EUR/INR is currently at 87.50.
On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 41.95. One can buy at 86.60 for a target of 87.50 with the stop loss of 86.00.
JPY/INR (SEP) contract closed at 70.4050 on 17-Sep-20. The contract made its high of 70.4500 on 17-Sep-20 and a low of 69.2125 on 14-Sep-20 (Weekly Basis). The 21-day Exponential Moving Average of the JPY/INR is currently at 69.87.
On the daily chart, JPY/INR has Relative Strength Index (14-day) value of 57.65. One can buy at 70.00 for a target of 70.75 with the stop loss of 69.50.
The company proposes to utilise the Net Proceeds towards funding the following objects:
Considering the valuation at upper price band of Rs.1230, EPS and P/E of FY2020 are Rs. 35.55 and 34.60 multiple respectively and at a lower price band of Rs. 1229, P/E multiple is 34.57; at upper price band of Rs.1230 , book value and P/B of FY2020 are Rs.110.65 and 11.12 multiple respectively and at a lower price band of Rs. 1229, P/B multiple is 11.11. No change in pre and post issue EPS and Book Value as the company is not making fresh issue of capital.
Computer Age Management Services (CAMS) Ltd is a technology-driven financial infrastructure and service provider. It is India's largest registrar and transfer agent of mutual funds. CAMS currently provides technology-based services. The company provides services in the area of electronic payment collections services business, insurance services business, alternative investment funds services business, banking, and non- banking services business, KYC registration agency business, and software solutions business. CAMS also offers services online through a mobile application.
Largest Infrastructure and Services Provider in a Large and Growing Mutual Funds Market: The five-year CAGR of QAAUM of mutual funds between March 2015 and March 2020 was 18% according to the CRISIL Report, while the five-year CAGR of the QAAUM of mutual funds serviced by CAMS over the same period was 21%. Further, its mutual fund clients had 19.77 million SIP accounts as of June 30, 2020. As per the Crisil Nov 2019 report, it has a 69.4% mutual fund aggregate market share.
Integrated Business Model and Longstanding Client Relationships in its Mutual Funds Services Business: The company offers an integrated and customized portfolio of services through a pan-India physical network comprising 271 service centres spread over 25 states and five union territories as of June 30, 2020, and which are supported by call centres in fits major cities, fits back offices (including a disaster recovery site), all having real-time connectivity, continuous availability and data replication and redundancy
Scalable Technology Enabled Ecosystem: The company believes that its competitive technology advantage stems from the capability, functionality, integration and scalability of its proprietary platforms, which deliver breadth and quality of service and cost efficiencies. Its infrastructure includes 271 service centers, fits call centers, fits back offices of which three are in Chennai and one in Coimbatore, having real time connectivity, continuous availability and data replication and redundancy. It also has an aggregate of over 275 TB data storage in its, businesses as of June 30, 2020. Its business continuity planning is done at its disaster recovery site in Mumbai.
Strong Focus on Processes and Risk Management: It continuously monitors its systems and processes and endeavor to not only benchmark them against Indian competitors but also incorporate industry best practices and technological advancements in its operations.
Maintain its Leadership Position by enhancing Service Offerings to Mutual Fund Clients: The focus on adding services for its existing mutual fund clients relating to servicing of investors, interface with investors, distributors and other stakeholders, risk management, process automation, data analytics and business intelligence in order to grow and maintain its share of business and revenues from its mutual fund clients.
Continue the Technology-led Services Innovations: The spending of the company on technology has continued to be significant and it believes the advantages available to it by developing and investing in technology include client commitment and loyalty, economies of scale, effective risk management, scalability, and expansion to the adjacent financial services sectors, among others.
Improve Automation in its Businesses: Through automation, it targets to not only improve cost efficiencies but also enhances customer experience. It is currently engaged in several automation projects, including automation of subscription reconciliation, purchase and SIP processes, document receipts and storage. Its applications, such as myCAMS, GoCORP, digiSIP, CAMSserv, edge360 are aimed not only at enhancing the investor and distributor ease of operation but also to automate the flow of transactions, thereby reducing manual efforts and risks associated with manual efforts.
CAMS is a technology-driven financial infrastructure and service provider in India. It is the well known brand and largest infrastructure service provider for mutual funds. The company has witnessed a steady revenue growth in the last 3 years. However, company future revenue and profit are largely dependent on the growth, value and composition of AAUM of the mutual funds managed by its clients, which may decline. Moreover, the issue is offer for sale (OFS) and the money raised through IPO route will not go to the company.
Markets regulator SEBI has modified allocation rules for multi-cap mutual funds in a circular dated September 11. Mutual funds now need to allocate a minimum of 75 percent of their corpus in equity and equity-linked instruments instead of 65 percent.
ICICI Prudential Mutual Fund has announced the launch of ICICI Prudential ESG Fund. The scheme will invest in companies which follow Environmental, Social and Governance (ESG) theme. According to the press release, companies will be assigned a composite ESG score based on the factors mentioned and exposure will be taken in companies by assessing them on the mentioned factors. The New Fund Offer (NFO) opens on September 21 and closes on October 05. The Scheme will be managed by Mrinal Singh, Deputy CIO- Equities and the benchmark is Nifty 100 ESG Index TRI.
Sundaram Mutual has announced the launch of Sundaram Bluechip Fund. The New Fund Offer (NFO) is an open-ended equity scheme predominantly investing in large cap bluechip stocks. The NFO will open for subscription on September 17, and close on September 30. The scheme will reopen for ongoing subscription and redemption from October 14, said a press release. The scheme will invest in a diversified large cap portfolio of 45-50 growth and value stocks without any sector bias. Stock selection will be based on a three-pronged framework of Quality – of Management, of Business model and of Financials. Portfolio construction will be a blend of bottom-up stock picking with top-down selection based on sectoral and macro trends. The fund can invest up to 20% of assets in midcaps, said the release.
IDFC Mutual Fund has started a new campaign called SIFI or `SIP in Fixed Income' to make investors more aware about the benefits of investing in fixed income products via Systematic Investment Plans. According to the fund house, most people typically associate SIPs with equity mutual fund investments. “There is lack of awareness about debt SIPs. SIFI can help generate better risk-adjusted returns, and your debt fund SIP can help cushion the impact of higher volatility in equity markets, thereby balancing your allocation,” says Vishal Kapoor, CEO, IDFC AMC. IDFC Mutual Fund’s SIFI initiative aims to inform investors how a combination of equity and debt SIPs can help them navigate troubled times.
Assets under management (AUM) of mutual fund companies that have come through the systematic investment plan (SIP) route touched Rs 3.36 lakh crore in August, an increase of 17 lakh from a month ago. The monthly SIP contribution in August fell to Rs 7,792 crore, marginally down from Rs 7,831 crore a month ago. The data was shared by NS Venkatesh, Chief Executive Officer, Association of Mutual Funds in India in a concall held to discuss AMFI monthly numbers. Mutual fund experts say that while in the short-term investors may go a bit slow in terms of investments in SIPs, in the long-run, SIPs will reap good returns. Overall, the 42-player mutual fund industry manages assets under management (AUM) of Rs 27.7 lakh crore in August, as against Rs 27.2 lakh crore in July.