2020: Issue 733, Week: 27th April - 1st May
A Weekly Update from SMC (For private circulation only)
NEY 
| Equity | 4-7 |
| Derivatives | 8-9 |
| Commodity | 10-13 |
| Currency | 14 |
| IPO | 15 |
| FD Monitor | 16 |
| Mutual Fund | 17-18 |
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n the week gone by, global stock markets moved higher on the promise of more US I government aid to ease the economic pain. But soon the enthusiasm was down after bleak report on a potential coronavirus vaccine. On the data front, US initial jobless claims, a rough way to measure layoffs, registered 4.427 million in the week ending April 18. Meanwhile, Japan’s services sector shrank at a record pace in April, while factories also fell quiet across the country due to the widening fallout from the coronavirus pandemic as an economic contraction deepens. Meanwhile Reuters has reported that pummeled into recession by the coronavirus pandemic, the global economy will suffer its steepest contraction on record this year, with a longer, Ushaped recovery more likely.
On the domestic market front, a recovery in crude oil prices, an overnight jump in US stocks and hopes of an economic stimulus back home push Indian markets higher. However on Friday, market moved lower as concerns over weakening global economy intensified following worrisome economic data from the US. The sustainability of the rally which we have seen recently will depend on government further measures to boost the economy and support the industries, once lockdown is removed. Rupee witnessed volatile amid strengthening greenback overseas. In another development, Franklin Templeton has announced that it would wind up its six open-ended debt funds due to the on-going health crisis that is seeping into the financial sector. Meanwhile, Confederation of Indian Industry (CII) has stated that India's GDP is likely to range between a decline of 0.9 percent and a growth of 1.5 percent in the current financial year, with the economy undergoing a "turbulent" phase caused by the coronavirusinduced lockdown. Going forward, it is expected that a host of domestic earnings, F&O expiry-related volatility and global cues will continue to influence the domestic stock market.
On the commodity market front, Yellow metal can register further gains on safe haven demand as widespread stimulus measures support gold as it is seen as a hedge against inflation and currency debasement. Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust stood at 1,042.46 tonnes which is their highest in nearly seven years. Crude oil prices can witness some lower level buying as some producers like Kuwait said they would move to cut output swiftly to try to counter the evaporation in global demand for fuels caused by the coronavirus pandemic. Under a deal agreed between the OPEC and associated producers like Russia, a grouping known as OPEC+, production cuts equal to 9.7 million barrels of oil per day are due to kick in from May. Industrial metals can witness positive gains as mining closure due to coronavirus is causing supply concerns. This week China manufacturing PMI and industrial profit data, US GDP, retail sales, consumer confidence, ISM manufacturing PMI, pending home sales, FOMC interest rate decision along with ECB interest rate decision are some important triggers for the 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.
The views expressed are based solely on information available publicly available/internal data/ other reliable sources believed to be true.
SMC does not represent/ provide any warranty express or implied to the accuracy, contents or views expressed herein and investors are advised to independently evaluate the market conditions/risks involved before making any investment decision.
DOMESTIC NEWS
Telecom
• Reliance Industries Limited (RIL), Jio Platforms Limited and Facebook, announced the signing of binding agreements for an investment of Rs 43,574 crore by Facebook into Jio Platforms. This investment by Facebook values Jio Platforms at Rs 4.62 lakh crore pre-money enterprise value ($65.95 billion, assuming a conversion rate of Rs 70 to a US dollar). Facebook’s investment will translate into a 9.99 percent equity stake in Jio Platforms on a fully diluted basis.
Realty
• Dilip Buildcon has provisionally completed the project 'Rehabilitation and upgradation of NH-66 (Erstwhile NH-17) from Km 406/030 to Km 450/170 (Kalmath to Zarap Section) to four lanes with paved shoulder in the state of Maharashtra under NHDP– IV on Hybrid Annuity Mode'.
Infrastructure
• L&T Construction has secured orders from prestigious clients in India. The business has won an order to design and construct an integrated resort complex project at Goa. The business has also secured an order to construct a Technology Park in Trivandrum over total built up area of 2.3 million sq. ft. which will be a Gold LEED certification park upon completion.
Pharmaceuticals
• Granules India announced that the US Food & Drug Administration (US FDA) has approved the Abbreviated New Drug Application (ANDA) filed by Granules Pharmaceuticals, Inc (GPI)., a wholly owned foreign subsidiary of Granules India for Trospium Chloride Extended-Release Capsules, 60 mg. It is bioequivalent to the reference listed drug product (RLD), Sanctura XR Capsules, 60 mg, of Allergan, Inc.
• The US Food and Drug Administration(US FDA) has reverted its inspection classification of Aurobindo Pharma Limited's Unit IV back to voluntary action indicated(VAI), relieving the company of any further regulatory action for this manufacturing facility. The US FDA had n February 21 told Aurobindo that the inspection conducted at Unit IV from November 4-13, 2019 was still open and under review by way of rescindment of 90-day VAI letter that was issued by the drug regulator just a couple of days before.
Cables
• KEI Industries has resumed partial operations at its manufacturing plants situated at Bhiwadi, Chopanki, Pathredi, District- Alwar, Rajasthan and Rakholi & Chinchpada, Silvassa - Dadra & Nagar Haveli.
FMCG
• Nestle India announced that all the manufacturing locations have received permission to operate and are now operating at scaled down levels. Most of the distribution centres/ warehouses, suppliers are also operating at scaled down levels.
INTERNATIONAL NEWS
• US new home sales plunged by 15.4 percent to an annual rate of 627,000 in March after tumbling by 4.6 percent to a revised rate of 741,000 in February. Economists had expected new home sales to nosedive by 15.7 percent to an annual rate of 645,000 in March from the 765,000 originally reported for the previous month.
• US initial jobless claims dropped to 4.427 million, a decrease of 810,000 from the previous week's revised level of 5.237 million. Economists had expected jobless claims to slump to 4.200 million from the 5.245 million originally reported for the previous week.
• UK retail sales volume, including automotive fuel, declined 5.1 percent month-on-month in March, following a 0.3 percent drop in February. Economists had forecast a 4.9 percent decrease.This was the biggest fall on record. Clothing stores logged the sharpest fall.
• Japan's all industry activity declined for the first time in four months in February. The all industry activity index fell 0.6 percent month-on-month in February, offsetting a 0.6 percent rise in January. Economists had expected a 0.5 percent decline. This was the first decrease since October.
• Japan's leading index rose more than initially estimated in February. The leading index, which measures the future economic activity, rose to 91.7 in February from 90.7 in January. According to initial estimate, the reading was 82.1.
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PETRONET LNG LIMITED
CMP: 218.35
Target Price: 272
Upside: 24%
| Face Value (Rs.) | 10.00 |
| 52 Week High/Low | 302.00/170.75 |
| M.Cap (Rs. in Cr.) | 32752.50 |
| EPS (Rs.) | 19.01 |
| P/E Ratio (times) | 11.49 |
| P/B Ratio (times) | 2.96 |
| Dividend Yield (%) | 4.49 |
| Stock Exchange | BSE |
Investment Rationale
• Petronet LNG is promoting and developing LNG as motor vehicle fuels and for other small scale consumption. It has set up the country's first LNG receiving and regasification terminal at Dahej, Gujarat, and another terminal at Kochi, Kerala.
• The company expects capex of Rs 600-800 crore for FY21-23 out of which Rs 100-200 crore is required for each station commissioning. Total capex guidance for FY21 is Rs 350 crore (Rs 126 crore for installing the terminals and Rs 65 crore for 2 tanks which needs to be built in Dahej).
• Volumes during the quarter was 233 thousand btu (TBTUs) in Q3FY'20 compared to 202 thousand btu in Q3FY'19 and 250 thousand btu in Q2FY'20. Dahej terminal volume was 222 thousand btu while Kochi terminal handled 11 TBTUs of LNG. Out of total Dahej volumes- 102 TBTUs were from long-term supply, 9 TBTUs were for short-term supply and 111 TBTUs were re-gasification quantities. Current Dahej utilization was 100% compared to 103% in Q3FY19 and 108% in Q2FY20.
• It has signed MoU for doing pre feed studies along with Japanese consortium and Sri Lanka Gas Terminal Company Limited for setting up a Floating Storage & Regasification Terminal at Colombo Sri Lanka.
• The company has shown interest for the construction of land-based LNG re-gasification terminal at Matarbari, Bangladesh but has not received any instruction to submit the bid yet.
• The company has formed a joint venture by the Government of India to import LNG and set up LNG terminals in the country, involving India's leading oil
and natural gas industry players like GAIL (India), ONGC, Indian Oil Corporation (IOCL) and BPCL.
• On the financial front, margins of the company has improved due to higher volumes processed at the Dahej Terminal on account of better efficiency in operations and higher utilization of the expanded nameplate capacity of 17.50 MMTPA.
Risk
• Industrial Slowdown
• Fluctuation in Natural Gas prices
Valuation
The company is well-placed to benefit from rising gas demand supported by its recent capacity expansion to 17.5 mmt at the Dahej terminal and plans to further expand capacity to 19.5 mmt in the next 2-3 years by setting up two storage tanks and a jetty. Thus it is expected that the stock will see a price target of Rs. 272 in 8-10 months time frame on an expected P/Bv multiple of 3.30 times and FY21E BVPS of Rs. 82.36.
COROMANDEL INTERNATIONAL LIMITED
CMP: 554.80
Target Price: 642
Upside: 16%
| Face Value (Rs.) | 1.00 |
| 52 Week High/Low | 643.95/336.50 |
| M.Cap (Rs. in Cr.) | 16253.07 |
| EPS (Rs.) | 32.13 |
| P/E Ratio (times) | 17.27 |
| P/B Ratio (times) | 4.28 |
| Dividend Yield (%) | 1.17 |
| Stock Exchange | BSE |
Investment Rationale
• CoromandelInternationalLimited,aflagshipofMurugappa group,is India’s second largest Phosphatic fertilizer player & produces Fertilizers, Specialty Nutrients & Crop Protection. The Company manufactures a wide range of fertilizers and markets around 4.5 million tons making it a leaderinfertilizermarkets.
• On the development front, it has strengthened its marketing and farm outreach and has re-launched its fertilizer underthe brand name called ‘Gromor Smart’ which has been very well accepted by the farmers. Production forthe newly commissioned phos acid plant at Vizag has stabilized. With this, Vizag plant has become fully self-sufficient for its phosphatic acid requirements. Other major infrastructure projects were improving capacity, storage, and efficiencies are progressing well. Moreover, the acquisition of the bio pesticides business of EID Parry is also enhancing its market presence in North America & Europe and push incremental revenues from the crop protection segment.
• The company’s focus on R&D has led to introduction of four differentiated products in water-soluble fertilizers and value-added single-support phosphate, which received positive feedback.
• During the nine-month period, its phosphatic fertilizer plants operated at 83% capacity utilization recording a production of 22 lakh tons, which is the same level as previous years. Single Superphosphate sales was at 1.5 lakh metric tons, year-to-date the sales have gone up by 8% to 4.7 lakh metric tons. Moreover, the company continues to be the market leader in SSP sales and market share.
• During Q3FY20, it has registered a strong performance driven by its continuous emphasis on superior sales, mix, and farm connecting initiatives, increased operational efficiencies, and better working capital management. The North-East monsoon has helped in
improving the crop acreage in most of its addressable markets except West Bengal, which has led to an increase of agriculture input consumption.
Risk
• Increase in commodity prices
• Foreign exchange fluctuations
Valuation
The company continues to invest towards infrastructure augmentation and capability development to offer differentiated solution to the farming community. Government’s ambitious plan to double the farm income by 2022 & fixation of the minimum support prices for crops at 1.5 times the cost of production brings out a sizeable opportunity for the company. Also, increase in prices of higher-fertilizerconsuming crops such as paddy, soybean and sugarcane augurs well for the company. We believe that the company is well-positioned for holistic growth, led by increased volumes and higher realizations. It is expected thatthe stock will see a price target of Rs.642 in 8 to 10 months time frame on one year average P/BV of 3.84 and FY21 BVPS of Rs.167.08.
Source: Company Website Reuters Capitaline
Above calls are recommended with a time horizon of 8 to 10 months.
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The stock closed at Rs 31.55 on 24th April 2020. It made a 52-week low at Rs 15.20 on 24th March 2020 and a 52-week high of Rs. 44.40 on 28th May, 2019. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 30.83
As we can see on charts that stock gave the breakout of downward sloping channel and started moving higher along with decent volumes. Apart from this, stock has formed an “Inverted Head and Shoulder” pattern on daily charts and has given the breakout of pattern, so buying momentum may continue for coming days. Therefore, one can buy in the range of 30.50-31 levels for the upside target of 40-42 levels with SL below 27.
The stock closed at Rs 1481.05 on 24th April 2020. It made a 52-week low of Rs 970 on 25th March 2020 and a 52-week high of Rs. 1629 on 10th February, 2020. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 1328.41
After registering all time high of 1600, stock corrected sharply and tested 1000 levels in short span of time. Due to reversal across the board, stock showed some buying and witnessed “V” shape recovery on charts, which is bullish in nature. Apart from this, technical indicators such as RSI and MACD are suggesting buying for the stock. Therefore, one can buy in the range of 1440-1450 levels for the upside target of 1620-1650 levels with SL below 1380 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: CAPITAL LINE
Charts by Spider Software India Ltd
Above calls are recommended with a time horizon of 1-2 months
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After a dip, Nifty bounced back and closed with minor losses in the week gone by. The recovery is led by Reliance whereas on higher level market witnessed distribution in heavy weights. On sectoral front, pharma and power showed strength whereas selling pressure was seen in other sectors. From the derivative front, put writers were most active at 9000 strike with highest concentration of more than 30 lakh while on the other hand, the 9500 strike hold the highest open interest in calls for the current expiry with more than 22 lakh shares. The Implied Volatility (IV) of calls closed at 34.57% while that for put options closed at 37.48%. The Nifty VIX for the week closed at 39.12% and is expected to remain volatile. PCR OI for the week closed at 1.13 down as compared to last week at 1.34 which indicates put unwinding. In coming week, 9000 level should act as a crucial support for the market and if market slides below this level then the next highest concentration is on put side is placed at 8500 with more than 24 lakh shares. It is expected that market will consolidate at current levels in broader range of 9200 to 8700. Traders should remain more focus on stock specific moves as ongoing result season could keep markets volatile.
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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
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Turmeric futures (May) is likely to take support near 5350 and may witness recovery towards 5800-6000 levels. Last week, two spot markets in Erode reopened after remaining closed for a month during the lockdown. However, the popular Nizamabad, Warrengal, Sangli markets are not functioning. It is being observed that only a limited number of farmers bringing their produce for sale. Only medium and poor quality old turmeric is available. On the demand side, few turmeric buyer traders are showing buying interest after examining the samples placed in the Erode Turmeric Merchants Association Sales yard. The unsold turmeric bags are being kept in the respective spot markets. The market participants are expecting more quantity of arrival of turmeric within couple of days and also more traders will attend the market. The correction in cardamom futures (May) is expected to deepen further & it may plunge to test 1600-1500 levels. In Kerala, the growers are in a difficult situation as the demand has dried up. With Bodinayakkanur now declared as a hotspot for COVID-19, it would prevent auctioneers and their agents to arrive there. Cardamom’s price is decided at the auctions, without which there is total uncertainty. The price would be known only when the auctions restart. Dhaniya futures (May) is likely to witness a consolidation in the range of 5450- 5950 levels. In the present scenario, demand is weak from bulk buyers amid the ongoing nationwide lockdown as they are not able to move the commodity due to inadequate transport facility. Jeera futures (May) will probably face resistance near 14450 & the upside may remain capped. The procurement operations by the exporters have halted due to the lockdown. Also, domestic demand is also seen interrupted.
Bullion counter may continue to remain on upside path as concerns over global economic growth and a wave of stimulus measures from central banks and governments continue to support the bullish sentiments. European Union leaders agreed to build a trillion-euro emergency fund to help recover from the pandemic, avoiding another all-night bust-up but leaving divisive details until the summer. The U.S. Labor Department stated that 4.427 million more people applied for unemployment benefits, taking the total since mid-March to 26.5 million. The unemployment rate seems poised to hit the 20% level and this alone should be reason enough for the Federal Reserve and Trump administration to keep throwing stimulus into the economy. Gold can move towards 47200 while taking support near 45500 while silver may move higher towards 44500 while taking support near 40500. The Federal Reserve will provide monthly reports on several of its economic rescue programs supported by the $2 trillion rescue program passed by Congress. Weak global economic data will also give support to the prices. U.S. home sales dropped by the most in nearly 4-1/2 years in March as measures to control the spread of the virus brought buyer traffic to a virtual standstill. The International Monetary Fund may need to step outside its comfort zone and consider “exceptional measures” to help countries deal with the pandemic and mitigate its economic impact. Physical gold demand globally continued to be in the doldrums as the coronavirus-led restrictions stalled activity, with dealers in the top consumer offering massive discounts.
.Soybean futures (May) has taken support near its 200 days weekly exponential moving average of 3590 and shown an excellent recovery taking positive cues from the international market. In days to come, we may see more upside momentum towards 3850-3950 levels. The China's recent purchases of North American supplies stoked hopes for stronger-than-expected demand from the world's largest importer. Chinese importers signed deals to buy at least three bulk shipments of U.S. soybeans this week after prices sank to an 11-month low as part of a broad-based commodities sell-off due to the coronavirus pandemic. In mustard futures (May) buying on dips would be suggested 4025, eyeing an upside of 4150-4200 levels. The Gujarat State Cooperative Marketing Federation Limited will start procuring mustard seeds at MSP from May 1. The MSP for mustard seed has been fixed at Rs 4,425 which is also higher by Rs 255 compared to that of the previous year. The move will come as a relief to several farmers who have not been able to sell their produce as Agriculture Produce Market Committees (APMCs) in the state were shut down from March 22, during the peak of Rabi marketing season, amid the nationwide lockdown. Soy oil futures (May) taking support near 760 may gain towards 815-825 following the footsteps of soyoil rally on CBOT, for which rebound in crude in acting as a catalyst. CPO futures (May) is expected to take support around 600 & move higher towards 635-650. The sentiments of palm oil market participants are turning optimistic as major exporters are keener to buy at current levels, with most technical indicators showing an almost 'oversold' situation.
Crude oil may witness some short covering at lower levels on hope of coordinated production cuts by OPEC and OPEC + but demand destruction to cap the upside. Crude oil (May) can recover 2000 by taking support near 900. Under a deal agreed between the Organization of the Petroleum Exporting Counties (OPEC) and associated producers like Russia, a grouping known as OPEC+, production cuts equal to 9.7 million barrels of oil per day are due to kick in from May. Saudi Arabia on stated that it was ready to take extra measures with other producers and Iraq made similar comments. The next formal OPEC+ meeting is in June. The United States and other countries also said this month they would pump less. Even besides the economic signal, the crude oil plunge puts fresh and unbearable pressure on producers and has investors worrying about a credit crunch if heavily indebted energy firms collapse or a systemic funding crisis if traders are affected. The oil industry has been swiftly reducing production in the face of an estimated 30% decline in fuel demand worldwide. Natural gas can remain on subdued path but lower level buying can be seen as it may test 150 while taking support near 120. There are a slew of bankruptcies coming down the road for natural gas companies as they will be shutting down production and that may support the prices. The weather is expected to remain colder than normal on the east coast for the next 2-weeks and warmer than normal on the west coast of the United State for the next 2-weeks.
Cotton futures (Apr) is likely to remain stable & consolidate in the range of 15800-16800 levels. In the international market, cotton has stabilized & created a strong support near 52 cents per pound. The reason behind is that the market participants are optimistic about demand based on the news that China is planning to add about 1 million tonnes of cotton to its state reserves, with the bulk of the crops to be imported from the US. However, the real impact will be seen with the release of the US Department of Agriculture's weekly export sales data due on Thursday. Back at home, the manufacturers in Gujarat and Punjab have started getting orders from China where the markets have started opening now. Castor seed futures (May) is likely to take support near 3760 & gain to test 3950-4050 levels. The country’s total castor crop estimate has been revised downwards to 19.52 lakh tonnes and supplies will be delayed this year due to delayed sowing on incessant rains during sowing time and subsequent slowdown in the picking/harvesting due to the countrywide lockdown. The probabilities are higher that guar gum futures (May) may turn bullish & test 5600-5800, taking support near 4750 levels. The reason being is that this commodity has a strong correlation of more than 0.80 with international crude prices, and the later is showing a strong rebound after diving to negative zone. Meanwhile, Opec is already looking at further steps, less than two weeks since forging its last deal. Saudi Arabia it was ready to take extra measures along with Opec+ allies and other oil producers, and Iraq echoed that position, although Russia was more cautious.
Base metals may witness sideways to upside movement. Copper may take support near 380 and resistance near 410. Glencore could reopen mining operations in Zambia, pacifying fears of supply disruptions caused by coronavirus-led global shutdowns. MMG Ltd stated that its copper output fell 20% year-on-year in the first quarter because of lower-than-planned production at the Las Bambas mine in Peru, where the miner has declared force majeure because of coronavirus-related curbs. Dwindling demand can be seen in copper inventories in LME registered warehouses, which at 263,425 tonnes have more than doubled since January and are near levels seen last October. Copper treatments charges in China are in freefall, pointing to a tighter market, and Yangshan import premiums are at a seven-month high of $84 a tonne. Zinc may recover towards 158 by taking support near 145. Lead may face resistance near 140 while taking support near 130. The global lead market swung to a surplus of 26,100 tonnes in February and the zinc oversupply rose to 130,100 tonnes. Nickel may witness recovery towards 960 while taking support near 890. Chinese NPI producers are reported to be cutting production due to a decreased mine supply from the Philippines. Aluminum also may remain in narrow range of 130-139. China’s primary aluminium demand has climbed by 150,000 to 200,000 tonnes in the past 30 days because of scrap shortages. Shrinking demand due to stalled manufacturing activity, particularly in the auto sector and growing supply are expected to leave the aluminium market with surpluses totaling millions of tonnes this year.
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COPPER MCX (MAY) contract closed at Rs. 403.30 on 23rd Apr’2020. The contract made its high of Rs. 436 on 06th Mar’2020 and a low of Rs.362.20 on 23rd Mar’2020. The 18-day Exponential Moving Average of the commodity is currently at Rs. 393.03 On the daily chart, the commodity has Relative Strength Index (14-day) value of 51.03.
One can buy around Rs. 393 for a target of Rs.423 with the stop loss of Rs. 382.
CPO MCX (MAY) contract closed at Rs. 621.50 on 23rd Apr’2020. The contract made its high of Rs. 686 on 06th Mar’2020 and a low of Rs. 575 on 13th Mar’2020. The 18-day Exponential Moving Average of the commodity is currently at Rs. 641.03 on the daily chart, the commodity has Relative Strength Index (14-day) value of 40.48.
One can buy around Rs.600 for a target of Rs. 645 with the stop loss of Rs. 583.
RMSEED NCDEX (MAY) contract was closed at Rs. 4097 on 23rd Apr’2020. The contract made its high of Rs. 4635 on 31st Dec’2019 and a low of Rs. 3770 on 13th Mar’2020. The 18-day Exponential Moving Average of the commodity is currently at Rs. 4045.77 on the daily chart, the commodity has Relative Strength Index (14-day) value of 54.60.
One can sell at Rs. 4140 for a target of Rs.3900 with the stop loss of Rs 4220.
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Ÿ Functional agricultural markets almost double since beginning of lockdown. Harvesting of pulses & potato almost complete; sugarcane, wheat & Rabi onion on track or nearing completion. - Ministry of Agriculture & Farmers Welfare
Ÿ During Rabi season 2020, the procurement of Pulses & Oilseeds on MSP is currently in progress in twenty (20) States. A quantity of 1,67,570.95 MT of Pulses and 1,11,638.52 MT of Oilseeds has been procured by NAFED and FCI through which 1,74,284 farmers have been benefited. - Ministry of Agriculture & Farmers Welfare
Ÿ MCX has revised the trade timing and it will now end at 11.30 pm from with effectfrom,April 23, 2020 for all nonagriculture commodities with international reference. All other commodities including international reference able agriculture commodities such as cotton, CPO, kapas and RBDPalmolein will be traded till 5pm.
Ÿ The government of Malaysia has deferred the implementation ofthe national B20 Biodiesel Programme due to lower crude palm oil (CPO) demand and to focus resources in response to the Covid-19 outbreak.
Ÿ Chile’s Antofagasta cut capital expenditure for the year and stated copper production would be at the lower end of its guidance of 725,000-755,000 tonnes.
Ÿ Brazilian miner Vale SA cut its 2020 production forecast for nickel to 180,000-195,000 tonnes from 200,000- 210,000, excluding its unit in New Caledonia, because of the impact of the novel coronavirus outbreak.
Ÿ China’s economy shrank for the first time after almost three decades of records in the first quarter, falling 6.8% YoYand slightly largerthan the 6.5% decline forecast.
Ÿ Global aluminium production rose by 2.1% over the first three months of this year, according to the latest figures from the International Aluminium Institute.
Crude oil prices continued to drop lower as demand destruction due to pandemic coronavirus kept the sentiment downbeat. Crude oil plunged sharply lower which reflected the scramble for storage as from Asia to North America, all over the world oil producers and traders are looking for a place to put their unwanted products as investor faces a worldwide supply glut that is expected to overwhelm demand for months. Moreover collapse in demand for oil due to lockdowns and countries running out of space to store the oil as dozens of vessels are booked in recent days to store at least 30M barrels of fuel at sea, as on-land tanks are full or already booked. The tankers are laden with seven times more Saudi oil than the kingdom usually ships to US Gulf coast, raising concern that ‘oil dumping’ may add to US oversupply which triggered first negative oil prices in history. EIAreport showing bearish sentiments as inventories showed a 15M barrels increase with commercial crude storage full around 60% while tanks at Cushing stand at about 75% of their total working capacity. U.S. senate approved $484B in additional coronavirus relief for U.S. economy supported prices with Trump administration considering offering federal stimulus funds to Oil producers in exchange for Govt. stakes in companies or their crude reserves. Natural gas ended on firm note on favorable weather conditions. Bullion counter continued to remain on firm footing as yellow metal surged higher on hopes for more fiscal and monetary stimulus measures amid massive economic damage due to stay-at-home and business shutdown orders around the world to limit the spread of the novel coronavirus. Meanwhile Silver ended on flat note considering dual properties. In base metals counter, copper traded on mixed path along with aluminium. Copper inventories on the ShFE fell to 303kt from a 4 year high above 380kt last month. While Chinese refined copper output in March fell by 2.5% YoY to 771kt, the lowest since May last year, production over the first quarter was up slightly from Q1 2019. In agri, guar complex continued to remain under the negative influence of crude prices. Last week, oil prices in the international market were on a roller coaster ride, even went to negative zone and its negative impact was seen on almost all the agri counters from oilseeds to spices. The most affected commodities were edible oils, wherein refined soy oil & crude palm oil descended the most as the demand is slowing down. Only few ones like chana managed to remain in positive territory supported by buying by mills to meet their immediate crushing requirements.
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• As per the India Meteorological Department (IMD)’s first stage Long Range Forecast (LRF) for monsoons "Southwest monsoon seasonal (June to September) rainfall over the country as a whole is likely to be normal (96-104%),".
• Quantitatively, the monsoon seasonal (June to September) rainfall is likely to be 100% of the Long Period Average (LPA) with a model error of 5%. The LPA of the season rainfall over the country as a whole for the period 1961-2010 is 88 cm.
• Monsoons are expected to hit Kerala's Thiruvananthapuram on June 1. IMD has revised theonsetandwithdrawaldateofmonsooninseveralother severalpartsofIndia.
• In states like Maharashtra, Gujarat, Madhya Pradesh, Chattisgarh, Telegana, Andhra Pradesh, Odisha, Jharkhand, Bihar and parts of Uttar Pradesh, monsoon will be delayed by 3-7 days compared to the existing normal dates.
• IMD will issue the updated forecasts in the last week of May/ first week of June as a part of the second stage forecast. Along with the updated forecast, separate forecasts for the monthly (July and August) rainfall over the country as a whole and seasonal (June-September) rainfall over the four broad geographical regions of India will also be issued.
• The cumulative rainfall in the country during the monsoon season (June to September, 2019) has been 10% high
Production Estimates
• As per Second Advance Estimates for 2019-20 released in Feb 2020, total Foodgrain production in the country is estimated at record 291.95 million tonnes which is higher by 6.74 million tonnes than the production of foodgrain of 285.21 million tonnes achieved during 2018-19.
• However, the production during 2019-20 is higher by 26.20 million tonnes than the previous five years’(2013-14 to 2017-18) average production of foodgrain.
• As per department of Agriculture, Cooperation and Farmers Welfare, Government of India, furing Rabi season 2020, the procurement of Pulses & Oilseeds on MSP is currently in progress in twenty (20) States.
• A quantity of 1,67,570.95 MT of Pulses and 1,11,638.52 MT of Oilseeds has been procured by NAFED and FCI valued at Rs 1313 Crores through which 1,74,284 farmers have been benefited.
• Ministry has initiated several steps to decongest wholesale markets & to boost the supply chains. The National Agriculture Market (e-NAM) portal has been revamped by adding two (2) new modules viz., (a) warehouse based trading module and (b) Farmer Producer Organizations (FPOs) module. The warehouse based trading module enables farmers to sell their produce from Warehousing Development and Regulatory Authority (WDRA) registered warehouses notified as deemed markets. The FPO trading module enables FPOs to upload their produce from collection centers with picture/ quality parameter for on-line bidding without physically reaching to the mandis. So far FPOs from 12 States (Punjab, Odisha, Gujarat, Rajasthan, West Bengal, Maharashtra, Haryana, Andhra Pradesh, Tamil Nadu, Uttarakhand,Uttar Pradesh & Jharkhand) have participated in the trade.
• With farmers reeling under stress due to low crop prices, normal rainfall is expected to help revive the sector and alleviate rural distress.
• Past data has indicated positive correlation between actual rainfall and the growth rate of agriculture GDP. Normal rains will help the economy, which can make recovery after coronavirus pandemic affect.
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| 20th APR | China cut key rate for second time this year, more easing likely |
| 21thAPR | WorldBanktoldG20:Pandemicthreatens foodsecurityofpoornations |
| 21th APR | U.S. home sales tumbles as coronavirus kept buyers indoors |
| 21th APR | Negative $40 oil reflected panic - and U.S. crude market economic reality |
| 22th APR | UK inflation fell as shoppers turn cautious in virus crisis |
| 23th APR | U.S.Housepassed$500billioncoronavirusbillinlatestreliefpackage |
| 23th APR | U.N. agency called for $1 trillion developing world debt write-off |
| 23th APR | UK facing historic economic shock, recovery might take time: BoE's Vlieghe |
Another week recorded in history when inversion in oil prices spooked the global markets. US benchmark WTI went to as low as negative as $40.32 driven by the overflow of unsellable oil in the tank farms of Cushing, Oklahoma, where U.S. oil futures are settled. But the collapse in oil prices has sent shockwaves rippling around the world including Indian Rupee which fell briefly below 76.85 this week. However rupee was lifted later after expectations of dollars flows over $5bn deal between Facebook and Reliance Jio prompt rupee traders to trim dollar long positions. However in upcoming week dollar long trend still remains in-tact. Meanwhile sentiment in Euro remains subdued despite expectations of deep plunge in bloc's business activities after European Central Bank (ECB) has changed its rules to accept “fallen angel” bonds that lose their investment-grade credit rating to maintain banks’ access to its ultra-cheap liquidity during the coronavirus crisis. The move, which was approved by an unscheduled call of the ECB’s governing council on Wednesday, is designed to limit the financial turmoil that might otherwise be caused by an expected wave of credit rating downgrades in response to the pandemic. Additionally Pound was slightly eased off last week losses in hope of further stimulus announcement Bank of England's Chief Economist Andy Haldane said he thinks the first quarter of the year would record a "modest contraction" in the UK economy, and the second would "likely bring a very much sharper contraction, seen across the world". Going forward next US advances Q1 number along with FED MPC meet will guide the major pairs.
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USD/INR (APR) contract closed at 76.1200 on 23-Apr-2020. The contract made its high of 77.0625 on 22-Apr-2020 and a low of 75.9775 on 23-Apr-2020 (Weekly Basis). The 21-day Exponential MovingAverage oftheUSD/INR is currently at 76.09
On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 56.75. One can buy @ 76.00 for the target of 77.50 with the stop loss of 75.49.
EUR/INR (APR) contract closed 1.0785 on 23-Apr-2020. The contract made its high of 1.0887 on 20-Apr-2020 and a low of 1.0818 on 21-Apr-2020 (Weekly Basis). The 21-day Exponential Moving Average of the EUR/INR is currently at 82.74
On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 45.14. One can sell at 82.30-82.40 for a target of 80.75 with the stop loss of 82.
GBP/INR (APR) contract closed at 94.0950 on 23-Apr-2020. The contract made its high of 95.5825 on 20-Apr-2020 and a low of 93.5525 on 23-Apr-2020 (Weekly Basis). The 21-day Exponential MovingAverage oftheGBP/INR is currently at 94.05
On the daily chart, GBP/INR has Relative Strength Index (14-day) value of 51.11. One can buy at 94.00 for a target of 95.50 with the stop loss of 93.49.
JPY/INR (APR) contract closed at 70.7800 on 23-Apr-2020. The contract made its high of 71.6525 on 22-Apr-2020 and a low of 70.4700 on 23-Apr-2020 (Weekly Basis). The 21-day Exponential MovingAverage ofthe JPY/INR is currently at 70.36
On the daily chart, JPY/INR has Relative Strength Index (14-day) value of 56.63. One can buy at 70.60-70.50 for a target of 72.00 with the stop loss of 70.00.
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Sebi extends regulatory approval validity for IPO, rights issue by 6 months
Sebi extended validity of regulatory approval for launching initial public offering and rights issue by six months in the wake of coronavirus pandemic. The step comes following representations from various industry bodies, the Securities and Exchange Board of India (Sebi) said in a circular. The validity of Sebi's observations, where the same have expired or will expire between March 1, 2020 and September 30, 2020, has been extended by 6 months from the date of expiry of such observation. This is subject to an undertaking from lead manager of the issue confirming compliance with the ICDR (Issue of Capital and Disclosure Requirements) Regulations while submitting the updated offer document to Sebi, it said. As per the norms, a public issue/rights issue needs to be opened within 12 months from the date of issuance of observations by Sebi. The regulator said that an issuer, whose offer document for IPO, follow on public offer and rights issue is pending receipt of its observation, will be permitted to increase or decrease the fresh issue size by up to 50 per cent of the estimated issue size without requiring to file fresh draft offer document with the Sebi. The relaxation on change in fresh issue size will be applicable for offer documents pending receipt of Sebi observations until December 31, 2020. Under the norms, any increase or decrease in estimated fresh issue size by more than 20 per cent of the estimated fresh issue size require fresh filing of the draft offer document along with fees. Sebi said it has decided to grant these one-time relaxations in view of the impact of COVID-19 pandemic. The circular will come into force with immediate effect, it added.
Half of FY20 IPOs hold head above water in this selloff, some remain multibaggers
While the coronavirus outbreak destroyed a huge amount of wealth on Dalal Street, 50 per cent of market debutants of FY20 managed to hold their heads above water and traded at prices that were at a decent premium to their listing prices. Out of the 15 stocks that got listed in FY 2019-20, seven are still trading above issue prices. A couple of them have even retained their multibagger status, whereas others managed to post decent returns even after giving up some of the gains. The benchmark equity indices retreated over one-fourth from their peak values and even the bluest of blue chips struggled to hold the fort, having lost 30-40 per cent of their worth.
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* For Application of Rs.50 Lac & above, Contact to Head Office.
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Mutual funds add over 72 lakh folios in 2019-20
Mutual fund industry has added more than 72 lakh folios in 2019-20 taking the total tally to near 9 crore mark. However, the pace of growth in folio numbers dropped in the just concluded financial year 2019-20 as compared to preceding two fiscal, which suggests investors' understanding about market risks associated with such schemes. Industry experts attributed the trend to decline in investors account in debt oriented schemes as they were spooked by credit events in fixed income market. In comparison, the industry had added 1.13 crore investors account in 2018-19 and 1.6 crore accounts in 2017-18, according to data from Association of Mutual Funds in India. The mutual fund space saw an addition of over 67 lakh folios in 2016- 17 and 59 lakh in 2015-16.
Big March selloff prompts mutual funds to lap up top private banks
Domestic mutual funds have been net buyers in the domestic equity market amid the brutal selloff, and heavily lapped up financial stocks all through March as valuations tumbled to historic lows thanks to the coronavirus-triggered market meltdown. Domestic institutional investors (DIIs), which largely include banks and mutual funds, bought a net of Rs 55,595 crore of Indian shares in March, setting a record for such purchases. ICICI Bank was the most favoured largecap stock among fund houses, as asset managers collectively bought shared with Rs 3,095.83 crore on the counter, data from Value Research showed. The second biggest favourite was HDFC Bank, which saw fund managers pick up shared worth Rs 2,348.17 crore. They also stocked up Rs 2,301.38 crore worth of shares in mortgage lender Housing Development Finance Corporation (HDFC). SBI Mutual Fund, India’s largest asset management company, went all out for corporate bank shares in March. The biggest addition to its portfolio in March was State Bank of India, where the money manager bought 3.62 crore shares. SBI MF also added 2.77 crore shares of ICICI Bank, 1.84 crore shares of Axis Bank and 1.55 crore shares of HDFC Bank.
Franklin Templeton shuts down six credit risk strategy debt funds
In an unprecedented decision, Franklin Templeton Mutual Fund has shut six of its open-ended debt funds, effective April 23. These six schemes are: Franklin India Low Duration Fund (FILDF), Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund, Franklin India Short Term Income Plan, Franklin India Ultra Short Bond Fund, and Franklin India Income Opportunities Fund (FIIOF).
Principal Mutual Fund has revised the minimum application amount for investment in some funds
Principal Mutual Fund has revised the minimum application amount for investment in Principal Emerging Bluechip Fund, Principal Hybrid Equity Fund, Principal Focused Multicap Fund and Principal Multicap Growth Fund. The minimum investment amount for SIP, new investment (lumpsum) and additional purchase (lumpsum) has been revised to Rs. 100, Rs. 300 and Rs. 300 respectively. The change is effective from Apr 21.
Tata Mutual Fund announces change in the fund management responsibilities for its multiple funds
Tata Mutual Fund has announced change in the fund managementresponsibilities forits multiple funds effective fromApr 20.Accordingly,Tata Digital India Fund will be jointly managed by Meeta Shetty and Rahul Singh; Tata Resources & Energy Fund will be jointly managed by Satish Chandra Mishra and Rahul Singh; Tata Infrastructure Fund will be jointly managed by Abhinav Sharma and Rupesh Patel; Tata Ethical Fund by Ennette Fernandes and Rupesh Patel; TataYoung Citizens’Fund byAmey Sathe, Rahul Singh andAkhil Mittal andTata India Pharma& healthcare Fund by Meeta Shetty and Rahul Singh.
Essel Mutual Fund announces change in fund manager for some of its funds
Essel Mutual Fund has announced that Mr. Archit Shah ceases to be the fund manager and key personnel of the AMC with effect from the close of business hours of Apr 20, 2020. Accordingly, Essel Equity Hybrid Fund, Essel Ultra Short Term Fund and Essel Liquid Fund shall be solely managed by Mr. Saravana Kumar. Essel 3 in 1 Fund and Essel Regular Savings Fund shall be jointly managed by Mr. Suraj Makhija (Equity Portion) and Mr. Saravana Kumar (Debt Portion). Essel Arbitrage Fund will be jointly managed by Mr. Pradeep Sukte (Equity Portion) and Mr. Saravana Kumar (Debt Portion).
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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
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