In the week gone by, markets across the globe looked cautious with negative bias amid crisis in Eastern Europe and fears of a slowdown in the global economy. With Fed delivering a rate hike i.e 75bp, which was all likely in the wake of a 40-year high inflation print, the markets across the globe further roiled. US Fed Chair Jerome Powell said that another 75 bps or 50 bps hike could come in the next FOMC meeting. Powel's guidance of 3.4 percent rate by end of 2022 and 3.8 percent terminal rate in 2023 reflect the determination to fight inflation. Also, the Fed is reducing the size of its balance sheet. On the other hand, the ECB drew a line under years of ultra-loose monetary policy at last week's meeting, calling an end to its massive bond-buying stimulus programme at the beginning of July. However, of late ECB promised fresh support for the bloc's indebted southern rim tempering a market rout that threatened a repeat of the debt crisis that almost brought down the euro near decade low. The Bank of England hiked its main interest rate for a fifth straight time, as it forecast British inflation to soar further this year to above 11 percent. The Bank of Japan maintained its massive stimulus and its guidance to keep borrowing costs at "present or lower" levels, signaling its resolve to focus on supporting the economy's recovery from the COVID-19 pandemic. At this juncture, investors should follow a cautious investment strategy without taking aggressive bets.
Back at home, alarmed foreign portfolio investors continued to pull out fund from the domestic markets amid monetary policy tightening even as domestic flows tried to provide some solace. Although fourth-quarter earnings were in line with expectations, domestic market continued to remain volatile due to various domestic as well as global factors. The Russia-Ukraine war that started in February is one of the biggest factors fuelling uncertainty. On the data front, Factory output grew to an eight-month high of 7.1 per cent in April, despite a high base, powered mainly by higher electricity and mining output. While, Retail inflation eased to 7.04 per cent in May, mainly on account of softening food and fuel prices as the government as well as the RBI stepped in to control spiralling price rise by way of duty cuts and repo rate hike. In another development, India's cabinet has approved a proposal to auction high speed fifth generation, or 5G, telecom spectrum for 20 years starting July 26. Going forward markets will take direction from both domestic and global factors.
On the commodity market front, in the week gone by, all most all the commodities closed marginally down. Rise in dollar index and treasury yield put pressure on commodities prices; however, fall was not as deep as it was expected on tight supply side. A stronger greenback makes U.S. dollar-priced oil more expensive for holders of other currencies, curtailing demand. Energy counter slipped on interest rate hike by Fed amid explosion in Free port which increased the supply of natural gas in US. Crude is now expected to trade in a range of 8700-9400 while natural gas can trade with wild swings in a band of 500-650 levels. Gold and silver can consolidate in a range of 49500- 52000 and 58000-64000 levels respectively. Base metals can trade in range on mix sentiments. Core Inflation Rate and Inflation Rate of UK and Canada, S&P Global Manufacturing PMI Flash of Germany and UK, Inflation Rate of Japan, Michigan Consumer Sentiment Final of US etc are few triggers for commodities 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.
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.
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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 company is focusing on improving its market share in the SUV segment with new launches which will help the company not only recover the overall market share but will also help in margin improvement. Cool-off in metal prices and improving supply chain issue auger well for the company. Moreover, deprecation in Yen would also reduce the input cost for the company as it import parts from japan in Yen. New capacity addition and pending booking along with new launched indicates future growth visibility. Thus, it is expected that the stock will see a price target of Rs.9418 in 8 to 10 months’ time frame on three year target P/Ex of 40x and FY23 EPS of Rs.235.45.
The company has delivered reasonable revenue growth along with improved profitability of the company. In the core businesses, it has delivered competitive growth with market share gains in both tea and salt. The company has expanded and strengthened its S&D infrastructure, accelerated momentum on innovation, invested in new drivers of growth and embarked on a global simplification plan to drive further efficiencies and synergies. Moreover, it is focusing on enhancing shareholders’ value by simplifying its structure and unlocking significant financial value while generating consistent earnings growth focusing on its six-pillar growth strategy. Thus, it is expected that the stock will see a price target of Rs.837 in 8 to 10 months’ time frame on a one year average P/Bv of 4.88x and FY23 BVPS of Rs.171.61.
The stock closed at Rs 923.45 on 17th June, 2022. It made a 52-week low at Rs 709.35 on 20th December, 2021 and a 52- week high of Rs. 983.95 on 02nd June, 2022. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 830.85
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 charts which is bullish in nature. Despite the fall in the broader indices, stock continued to hold its buying momentum and managed to close in positive territory along with decent volumes, this indicate buying is aggressive for the stock. Therefore, one can buy in the range of 900-908 levels for the upside target of 970-990 levels with SL below 870 levels.
The stock closed at Rs 208.00 on 17th June, 2022. It made a 52-week low of Rs 181.20 on 16th May, 2022 and a 52-week high of Rs. 332.80 on 28th September, 2021. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 220.28
Stock witnessed heavy correction from yearly high and tested yearly low in short span of time. Then after it consolidated in narrow and formed an “Inverse Head and Shoulder” pattern on weekly charts, which is considered to be bullish. Last week, stock tried to give the neckline breakout of pattern but couldn’t hold the high due to market volatility. On the indicators front such as RSI and MACD, both are suggesting buying for the stock. Therefore, one can buy in the range of 203-205 levels for the upside target of 230- 235 levels with SL below 188 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 witnessed a sharp selloff in the week gone by as Nifty post loss of more than 5.50% while Bank nifty also ended the week with cut of nearly 5% below 15300 & 32800 respectively. This was third consecutive weekly fall for Bank nifty while second consecutive fall for Nifty. Implied volatility (IV) of calls closed at 22.50% while that for put options closed at 23.79%. The Nifty VIX for the week closed at 22.87%. PCR OI for the week closed at 1.10. From technical front, both the indices have closed below their 100 days exponential moving average on weekly charts which points towards limited upside in upcoming sessions. From the derivative front, put writers were seen adding open interest at 15000 strike while call writers added hefty open interest at 15300, 15500 & 15700 strike. At current juncture, we expect that volatility is likely to grip markets in coming week with bias to remain in favour of bears. On downside, 15000 levels will act as strong support for Nifty while 15500-15600 zone will cap any sharp upside.
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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
A mixed trend in the spices counter was witnessed; Coriander recovered but jeera and turmeric traded under pressure. The export demand for turmeric and jeera is still not improving while bargain buying at lower levels keep supporting Coriander. Turmeric (Jul) slipped to fresh low level in 2022 of 7850 as fresh selling continue since the start of April. The prices have now corrected more than 4% from last week high. In the coming week, we expect it to trade sideways to lower towards 7600, if it sustains below 7850 levels. Currently, reports of sufficient stocks and good sowing progress are pressurizing the prices. The prices have corrected more than 30% from highs of 2022 due to lower exports demand and new season arrivals. As per latest export figures, turmeric exports in Apr 2022 is higher 3.61% y/y at 13,760 tonnes vs 13, 280 tonnes while for the period of Jan-Apr 2022, exports are at par compared to last year figures of 50,500 tonnes. In FY 2021/22, exports were down 16.7% y/y at 1.53 lakh tons but higher by 10% compared with 5-year average.
Jeera (Jul) continued to close negative for the fifth consecutive week as selling pressure continue due to lack of export demand. The support is seen at 20900 levels while resistance is at 21660 levels. We expect the prices to trade sideways to lower towards 20700 if it sustains below support levels. Prices have corrected more than 6% in last month due to lower exports and sufficient arrivals. As per govt data, jeera exports in Apr 2022 down by 66% Y/Y at 10,700 tonnes, the lowest April month export volume in last 6 years while exports in first 4-months of 2022 down by 46% Y/Y to 54000 compared to 1 lakh tonnes last year. Currently, prices are higher by 58.3% y/y on lower crop estimates and lower stocks with the traders.
Dhaniya (Jul) continued to trade in a range last week as it has good support near 11200 levels while resistance is seen at 11640 levels. We expect the prices to trade in a range bound manner till it breaks either the support or resistance. This season the processors and traders are buying as per their requirements as market prices ruling higher by about 70% y/y and up 30% since January due to lower crop estimates. As per govt data, coriander exports in Apr 2022 down 27.1% y/y at 4020 tonnes compared to 5500 tonnes last year while for first 4 months of 2022, the export volumes are down by 23.5% at 15,100 tonnes Vs 19,770 tonnes last year but 12% higher compared to 5-year average for same period.
Gold roses more than 1% as the dollar pulled back sharply on the U.S. central bank’s aggressive policy outlook, bringing some of the safe-haven lure back to the metal. Bolstering gold’s appeal among overseas buyers, the dollar fell 1.6% to retreat from recent two-decade highs. Gold is now starting to look pretty attractive as the bet on the U.S. economy is dwindling. As the dollar rally has hit a peak and investors are right now looking for safe havens, the gold trade looks pretty attractive. While gold has recently moved in tandem with stock and bond markets, rather than gaining from pure safe-haven flows, its rise came despite a steep selloff on Wall Street that was driven by worries over recession. Inflation and economic uncertainties are usually supportive of gold, but higher interest rates increase the opportunity cost of holding non-yielding bullion. Gold’s safehaven lure could fade further if the Federal Reserve successfully fights inflation without pushing the United States into a recession. The Fed announced its largest interest rate increase in more than a quarter of a century. Concerns about surging inflation also prompted other central banks to tighten monetary policies. The Swiss National Bank unexpectedly raised its policy rate for the first time in 15 years and the Bank of England followed suit. On the technical front, both the counter has formed positive formations where gold may trade with positive bias and approach $1900 and take support near $1800. Ahead in the week, MCX Gold may trade with sideways to positive bias where it may take support near 50400 and could face resistance near 52000. Silver may trade in the range of 59500- 63500 levels.
The price of oil dips to a fresh weekly low ($114.60) following an unexpected rise in US inventories, and crude may face a further decline over the coming days, if it fails to defend the opening range for June. OPEC+ produced 2.695 million barrels per day below its crude oil targets in May because of production problems at several members and as Russia faced sanctions. Underproduction by OPEC+, was higher in May, when overall compliance with planned output cuts stood at 256%, up from 220% a month earlier. Global demand is recovering from the pandemic and outpacing the abilities of OPEC+ countries to increase production. Russia's crude output rose to 9.273 mln bpd in May from 9.159 mln bpd in April, but its production levels remained 1.276 mln bpd below target last month, the OPEC+ document showed, the largest deviation across all OPEC+ members. Supply from the group faces additional challenges in June as a new blockade of Libyan crude oil facilities has greatly reduced the country’s production levels. Libya remained exempt from OPEC oil production quotas. Ahead in the week, prices may continue to trade with higher volatility where it may take support near 8900 and could face resistance near 9450. U.S. natural-gas prices plummeted after an LNG shipping facility in Texas said a fire last week would knock out the facility until late this year, greatly reducing export capacity. Natural-gas futures for July delivery fell more than 16% to $7.189, the latest whipsaw move in the market for the power-generation and heating fuel. Ahead in the week, prices may continue to witness selling from higher levels support and may see near 510 levels and could face resistance near 620 levels.
Base metals may trade in range with negative bias as worries that rising interest rates would dent global economic growth may keep the metal demand reduced. Metals demand is at risk as accelerated monetary policy tightening led by developed economies threatens to hamstring economic growth and trigger a possible recession. Soaring inflation also threatens to curb consumer goods spending as the rising cost of living hits disposable income and confidence. China's new home prices fell for the second month this year, depressed by still fragile demand as widespread COVID-19 curbs dented already weak buyer confidence. However, China’s economy showed signs of recovery in May after slumping in the prior month as industrial production rose unexpectedly, while car sales jumped 54% in the week of June 6 versus the same period in May. Copper may trade in the range 735-780 levels. Workers at Chilean state-owned Codelco, the world's largest copper producer, will go on strike if they do not receive a favourable answer from the company's board of directors, the union said. Aluminum may trade in the range of 205- 225 levels. China's monthly production of aluminium reached a record high in May following easing in power consumption curbs and as COVID-19-induced lockdowns had little impact on output. Zinc can trade in the range of 305-325 levels. Zinc stocks in LME-approved warehouses are at their lowest in more than two years due to shortages in Europe where record-high power prices have led to production cuts of the metal. Lead can move in the range of 178- 190 levels. Nickel may trade in the range of 2100-2300 levels.
Last week, Cotton (Jun) prices continued to recover but still trading in a very narrow range. Now have the support at 46300 while resistance at 48500 levels. We expect it to trade sideways in the range of support and resistance in the coming week. Currently, prices are supportive due to slow progress in cotton sowing and higher MSP for cotton in 2022-23 to Rs. 6,080 per quintal. Cotton prices are 93% higher y/y due to lower stocks in the country amid lower production. Cotton sowing has started and according to sowing report, area lower by 30% Y/Y at 13 lakh ha Vs 18.65 last year as on 10th Jun. The demand for cotton is limited from textile sector in South has taken decision to close 100% mills and stop buying of cotton. In Jun, USDA cut global cotton production by 1.5 million bales and cut 1.0 million bales from India for 2021/22 for the second consecutive month to 24.5 million bales.
Guar seed (Jul) slipped to lowest levels in 2022 last week due to fresh selling at higher levels. While on reports of normal monsoon by the weather department prices have down close to 10% in last one month. On weekly basis, we see support at 5450 levels and expected to trade sideways to lower towards support while resistance is at 5800. Currently, prices are higher by about 43.5% y/y due to lower production, multi-year lower stocks and good export demand. Currently, there is normal demand and expectation of higher sowing in coming season. The export of guar gum may support prices as number of operational oil rigs improving in the US. Guar gum exports in Apr 2022 higher by 7% y/y at 29,132 tonnes while exports during Jan-Apr 2022 is up by 22% y/y at 79,650 tonnes compared 65275 tonnes last FY. Guargum exports were down about 20% in last FY compared to previous five-year average of 4 lt exports.
Castor seed (Jul) closed lower for the 4th consecutive week due to fresh selling at higher levels. Prices have slipped about 7% to the low of 7260 but witnessed some recovery to above 7400 levels. We expect it to trade in the range of 7250-7600 levels. Currently, prices are on higher side as it is about 47% higher y/y due to lower production estimates while prices have increased 26% since the start of 2022. Despite higher prices the exports of Castor oil and meal is higher in the first 5 months of 2022 by about 18% and 3% respectively.
Mentha oil (Jun) traded on positive note last week after it slipped to 3-month low price of 1014. We see support at 1010 levels while the resistance is 1090 levels. Going forward, the prices are expected to trade higher towards its resistance if prices sustain above 1060 levels.
GOLD MCX (AUG)contract closed at Rs. 50986.00 on 16th Jun 2022. The contract made its high of Rs. 53904.00 on 18th Apr’2022 and a low of Rs. 49741.00 on 16th May’2022. The 18-day Exponential Moving Average of the commodity is currently at Rs 50916.43. On the daily chart, the commodity has Relative Strength Index (14-day) value of 50.135.
One can buy near Rs. 50700 for a target of Rs. 51500 with the stop loss of 50400.
NATURAL GAS MCX (JUN)contract was closed at Rs. 580.60 on 16th Jun’2022. The contract made its high of Rs. 749.60 on 08th Jun’2022 and a low of Rs. 408.60 on 30th Mar’2022. The 18-day Exponential Moving Average of the commodity is currently at Rs. 640.37. On the daily chart, the commodity has Relative Strength Index (14-day) value of 39.592.
One can sell near Rs. 585 for a target of Rs. 510 with the stop loss of Rs 625.
DHANIYA NCDEX (JUN)contract closed at Rs. 11442.00 on 16th Jun’2022. The contract made its high of Rs. 12560.00 on 05th Jun’2022 and a low of Rs. 10932.00 on 26th May’2022. The 18-day Exponential Moving Average of the commodity is currently at Rs. 11446.02. On the daily chart, the commodity has Relative Strength Index (14-day) value of 46.059.
One can buy near Rs. 11400 for a target of Rs. 11900 with the stop loss of Rs. 11100.
In the week gone by, all most all the commodities closed marginally down. Rise in dollar index and treasury yield put pressure on commodities prices; however, fall was not as deep as it was expected on tight supply side. A stronger greenback makes U.S. dollar-priced oil more expensive for holders of other currencies, curtailing demand. In a historical decision, U.S. Federal Reserve raised interest rates by 75 basis points on Wednesday, its biggest interest rate hike since 1994, and pointed to further steady rises this year to combat historically high levels of inflation. WTI crude faced resistance near $123 and saw fall from there. US Crude production, which has been largely stagnant over the last few months, edged up 100,000 barrels per day last week to 12 million bpd, its highest level since April 2020, data from the Energy Information Administration showed. U.S. crude stocks and distillate inventories rose while gasoline inventories fell in the week through June 10. Furthermore, OPEC has stuck with its forecast that world oil demand will exceed pre-pandemic levels in 2022, although the producer group said Russia's invasion of Ukraine and developments around the coronavirus pandemic pose a considerable risk. OPEC expects world consumption to surpass the 100 million bpd mark in the third quarter. Natural gas saw sharp fall after an LNG shipping facility in Texas said a fire last week would knock out the facility until late this year, greatly reducing export capacity, suggesting greatly diminished fears about shortages this coming winter. Natural-gas futures for July delivery fell more than 16% to end Tuesday at $7.189 per mbtu. Base metals prices dived down on fear that recent rate hike would lead to recession. Bullion counter performed weak on rise interest rate though the fall was not so sharp on higher inflation amid recession fear.
Castor seed (Jun) closed lower for the 4th consecutive week due to fresh selling at higher levels. Prices have slipped about 7% to the low of 7260 but witnessed some recovery to above 7400 levels. Mentha oil (Jun) traded on positive note last week after it slipped to 3-month low price of 1014. Guar seed (Jul) slipped to lowest levels in 2022 last week due to fresh selling at higher levels. While on reports of normal monsoon by the weather department prices have down close to 10% in last one month. Cotton oil seeds cake slipped again from the higher side whereas cotton recovered from the low. In spices, both turmeric and jeera prices traded with bearish bias whereas Dhaniya traded in a range.3
The BDI tracks the prices of bulk carriers which are the life-blood of global trade, carrying everything from iron ore, coal to grain. It represents the cost paid by an end customer to have a shipping company transport raw materials across seas on the Baltic Exchange, the global marketplace for brokering shipping contracts. The Baltic Exchange is similar to the NYMEX in that it is a medium for buyers and sellers of contracts and forward agreements (futures) for delivery of dry bulk cargo. The exchange maintains prices on several routes for different cargoes and then publishes its own index, the BDI, as a summary of the entire dry bulk shipping market. This index can be used as an overall economic indicator as it shows where end prices are heading for items that use the raw materials that are shipped in dry form. The Baltic Dry Index takes into account 23 different shipping routes carrying coal, iron ore, grains and many other commodities.
Current scenario of Baltic Dry Index
The overall index, which factors in rates for capesize, panamax, and supramax shipping vessels, is trading above 2350 points. The volatile nature of the world over the last two years has been reflected in shipping prices. The Baltic Dry Index in mid-May 2020 was below 500 as COVID-19 began its global spread. A year later it had passed the 3,000-mark before further spiking to hit a peak of 5,647 in October last year. It then slumped before climbing once more when Russia invaded Ukraine in late February, passing over 3,000 points from May onwards. The outbreak of the war in Ukraine had a major impact on the dry bulk industry, triggering a reshuffling of many trades (mostly the coal trade) and making some areas almost untradable (particularly the Black Sea). Russia and Ukraine are major dry bulk exporters and the war has significantly disrupted shipments from both countries. The war also triggered a jump in European coal imports that increased by 1.0 – 1.5 million tonnes per week post-war and benefitted mostly the Capesize segment. The Panamax and Supramax segments fared better than the Capesize segment in the January – March period with the Baltic Panamax Index and the Baltic Supramax Index averaging $23,218 and $25,156 per day respectively, up 25.5% and 51.2% year-on-year respectively, supported by strong minor bulk activity.
Composition of Index.
What the means of Index to Investors
Inevitably it was a roller-coaster week packed with Central Banks' monetary policies. As widely expected Indian Rupee ended in red for the seventh week in a row below 78 to a dollar. The dollar pushed the basket of currencies after US CPI released last week printed to four decades high. However, the dollar retreated during mid-week and posted its biggest two-day drop since March 2020 as European central banks stepped up monetary tightening, anchoring a narrower gap between rates there and in the US. At the same time, a surprise rate hike by 50 bps from the Swiss Central bank pulled the trigger in the markets. We think the weakness in the rupee will continue and USDINR is likely to stay above 78.00 in the coming days while EURINR is likely to float slightly on the higher side towards 83.00 as well. The biggest volatility was seen in GBPUSD as well as in GBPINR where BoE hiked by 25bps which is lower than consensus but the pound shot up sharply after money markets are pricing for aggressive hikes in coming meetings. We do think the wide swings in GBPINR will continue for a while. Apart from monetary tightening, the Bank of Japan kept its monetary policy ultra dovish which pushed USDJPY higher above 134.00 while JPYINR will continue its weakness in the coming days.
USD/INR (JUN)contract closed at 78.1550 on 16-June-22. The contract made its high of 78.3950 on 13-June-22 and a low of 78.000 on 15-June-22 (Weekly Basis). The 21-day Exponential Moving Average of the USD/INR is currently at 77.8415.
On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 65.84.One can buy at 77.75 for the target of 78.75 with the stop loss of 77.25.
GBP/INR (JUN) contract closed at 94.4650 on 16-May-22. The contract made its high of 96.3975 on 13-June-22 and a low of 93.7525 on 15-June-22 (Weekly Basis). The 21-day Exponential Moving Average of the GBP/INR is currently at 96.5115.
On the daily chart, GBP/INR has Relative Strength Index (14-day) value of 45.49. One can sell at 96.50 for a target of 95.50 with the stop loss of 97.00.
| 17th JUN | BOJ announce no change to monetary policy |
| 16th JUN | BoE hikes interest rates by 25 bps to 1.25%, as was widely anticipated |
| 16th JUN | SNB hikes rates to -0.25% vs. -0.75% previous |
| 15th JUN | Fed lifts interest rates by 75 bps to 1.50-1.75%, as expected |
| 15th JUN | US Retail Sales fall by 0.3% MoM in May vs. 0.2% expected gain |
| 15th JUN | ECB Will apply flexibility in reinvesting PEPP redemptions, pandemic has left lasting impact |
| 15th JUN | Euro zone April industrial production +0.4% vs +0.5% m/m expected |
| 13th JUN | India's inflation cools to 7.04 % in May of 2022 from an 8-year high of 7.79%. |
| 13th JUN | UK April monthly GDP -0.3% vs +0.1% m/m expected |
EUR/INR (JUN) contract closed at 81.4275 on 16-June-22. The contract made its high of 82.6575 on 14-June-22 and a low of 81.2175 on 16-June-22 (Weekly Basis). The 21-day Exponential Moving Average of the EUR/INR is currently at 82.5592.
On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 46.81. One can sell at 82.50 for a target of 81.50 with the stop loss of 83.00.
JPY/INR (JUN) contract closed at 58.8825 on 16-June-22. The contract made its high of 59.1050 on 16- June-22 and a low of 57.9300 on 15-June-22 (Weekly Basis). The 21-day Exponential Moving Average of the JPY/INR is currently at 59.2413.
On the daily chart, JPY/INR has Relative Strength Index (14-day) value of 33.90. One can sell at 58.50 for a target of 57.50 with the stop loss of 59.00.
Three companies -- Macleods Pharmaceuticals, travel services provider TBO Tek and Suraj Estate Developers -- have received capital markets regulator Sebi's go ahead to raise funds through initial public offerings (IPOs). These firms, which filed their preliminary IPO papers with Sebi between December 2021 and March 2022, obtained Sebi's observations during May 17-20. Macleods is engaged in developing, manufacturing and marketing a wide range of formulations across several major therapeutic areas including anti-infectives, cardiovascular, anti-diabetic, dermatology, and hormone treatment. TBO Tek is planning to mop up Rs 2,100 crore through its IPO. The public issue comprises fresh issue of equity shares aggregating up to Rs 900 crore and an OFS aggregating up to Rs 1,200 crore by promoters and existing investors.The company is a new age travel distribution company that provides entire global travel inventory under one roof with very limited or no additional effort for buyers and suppliers. Suraj Estate Developers is planning to raise Rs 500 crore through its IPO. The funds will be raised through fresh issuance of equity shares. The company has been involved in the real estate business since 1986 and develops real estate across residential and commercial sectors in the South Central Mumbai region.
Bharat FIH, the maker of Xiaomi and Nokia phones in India, received the go-ahead from the capital markets regulator on June 10 to raise Rs 5000 crore through an initial public offering (IPO). Separately, market regulator SEBI has also sought clarifications from Lava Mobiles for its Rs 1500 crore IPO. The Noida-based smartphone brand and contract manufacturer had filed the draft prospectus in September 2021 that stated a fresh issue of equity shares worth Rs 500 crore, and an offer for sale component of 43,727,603 equity shares. The Bharat FIH IPO includes a fresh issue of shares worth Rs 2502 crore and a stake sale by promoter group Foxconn's subsidiary Wonderful Stars valued at Rs 2502 crore.
JK Files and Engineering, a part of the Raymond Group, is eyeing a turnover of ₹1,500 crore in the next few years on expectations of robust demand for precision automotive components. JK Files has asset turnover of three times, translating into incremental revenue of around ₹450 crore. The company is soon set to hit the IPO route. According to the draft red herring prospectus filed with the market regulator, the company has an installed capacity of 8.2 million ring gears at the end of June 2021. The company plans to raise around ₹500-600 crore that would primarily be used to bring down debt of its parent company Raymond.
Keystone Realtors has filed papers with the capital markets regulator to raise up to Rs 850 crore in an initial public offering (IPO). The maiden share sale of the Rustomjee Group company comprises a fresh issue of up to Rs 700 crore and an offer for sale (OFS) of up to Rs 150 crore by existing shareholders and promoters. Axis Capital and Credit Suisse Securities (India) are the Book Running Lead Managers (BRLM). Mumbai-based Keystone Realtors, which operates under the brand Rustomjee, is planning to utilise the net proceeds toward repayment or prepayment, in full or part, of certain borrowings availed by the company and subsidiaries, and toward funding the acquisition of future real estate projects. The OFS portion comprises equity shares up to Rs 75 crore by Boman Rustom Irani, up to Rs 37.5 crore by Percy Sorabji Chowdhry and up to Rs 37.5 crore by Chandresh Dinesh Mehta. As of March 31, 2022, the developer had 32 completed projects, 12 ongoing projects and 19 forthcoming projects across the Mumbai Metropolitan Region (MMR). These include affordable, mid and mass, aspirational, premium and super-premium segments — all under the Rustomjee brand.
Deltatech formerly known as Gaussian Network Pvt Ltd, a wholly owned real money gaming subsidiary of casino operator Delta Corp, on June 16 filed a draft red herring prospectus with the Securities and Exchange Board of India (SEBI) for a Rs 550 crore initial public offering (IPO). The offer comprises fresh issues of shares worth Rs 300 crore and an offer for sale of up to Rs 250 crore. Deltatech Gaming offers real money gaming via Adda52 and Adda.games platforms and had over 55 lakh registered gamers as of FY22-end. Delta Corp bought Gaussian Network in 2017 for around Rs 224 crore. Delta Corp Incorporated in 1990 as a textiles and real estate consultancy company and has evolved into diversified segments like Casino gaming, online gaming, hospitality, and real estate.
Drugmaker Innova Captab may file a draft red herring prospectus (DRHP) with market regulator Sebi for initial public offering (IPO). The Mumbai-based company is engaged in contract development and manufacturing of generic formulations. The company has considerable presence in the acute and chronic therapeutics segment, especially in cardio metabolic, respiratory, neuroscience, infectious diseases and vaccines. It is present across the entire pharma value chain that includes research and development, manufacturing, drug distribution, marketing and exports. The drugmaker has two WHO GMP certified manufacturing facilities in Baddi and also has a CSIR approved R&D facility. Innova was founded as a partnership firm in 2005 by Gian Prakash Aggarwal, Manoj Kumar Lohariwala and Vinay Kumar Lohariwala. Thereafter, in March 2021, it took over the partnership firm on a slump sale basis which was funded through term loans.
Nandan Terry, part of the Chiripal group, has decided to withdraw its Rs 255-crore initial public offering (IPO). The IPO was slated to be entirely a fresh issue of equity shares. Proceeds of the issue were to be used for payment of debt, for funding working capital requirements and general corporate proposals. The company had filed the Draft Red Herring Prospectus (DRHP) for the proposed IPO on December 10, 2021 with the Securities and Exchange Board of India (Sebi). Incorporated in 2015, Ahmedabad-based Nandan Terry is a fully vertically integrated company engaged in the manufacturing terry towels and towelling products. The company also sells the cotton yarn manufactured at its units.
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Retail investors stepped up their investments in equity mutual funds in May undeterred by the uncertainty in the stock market. Equity schemes witnessed flows of ₹18,529 crore in May as against ₹15,890 crore the previous month. Debt schemes, however, witnessed outflows as the outlook for interest rates firmed up. This partly resulted in the industry's total assets under management (AUM) declining to ₹37.37 lakh crore during May as against the previous month's ₹38.89 lakh crore. Flows through systematic investment plans (SIPs) - akin to recurring deposits of banks - rose to ₹12,286 crore in May as against ₹11,863 crore in April. Flexicap funds saw the highest collection of ₹2,939 crore in May, followed by large-cap and large-andmid- cap categories, which got inflows to the tune of ₹2,485 crore and ₹2,413 crore, respectively. Low-cost passive funds, which include both equity and debt funds, saw inflows of ₹5,723 crore. Dynamic asset allocation funds, which invest in a mix of debt and equity based on market valuations, saw inflows of ₹2,248 crore. Aggressive hybrid funds, which allocate 65-75% of their portfolio to equities, saw inflows of ₹1,380 crore. Debt-oriented funds witnessed a net outflow of ₹32,722 crore in May 2022, compared to the previous month's net inflow of ₹54,756 crore. Money market funds saw outflows of ₹14,598 crore, followed by short-duration funds and ultra-short duration funds. With no sovereign gold bonds (SGB) for the financial year 2022-23 in the offing, investors allocated money to gold schemes. Gold ETFs saw inflows of ₹203 crore as investors bought the yellow metal fearing escalation of tension between Russia and Ukraine, surge in crude prices and rising inflation.
Capital markets regulator Sebi said Principal Mutual Fund (PMF) now ceases to exist as a mutual fund. This comes after Asset Management Private Limited (Principal AMC) had informed Sebi that it wanted to surrender the registration granted to PMF by the regulator. Following this, Sebi accepted the request for surrender of certificate of registration of PMF. "Consequently, PMF ceases to exist as a mutual fund with effect from June 2, 2022,” the Securities and Exchange Board of India (Sebi) said in a statement. It further said PMF will continue to be liable for all liabilities, including monetary penalties, violations, if any, of the provisions of Sebi Act and mutual fund rules that have taken place before its surrender of certificate of registration. In January 2021, Sundaram Asset Management Company announced acquiring smaller rival Principal Asset Management for an undisclosed sum. Principal had over Rs 7,447 crore in assets under management as on December 2020, with 90 per cent of them being in equityoriented schemes.
ICICI Prudential Mutual Fund has launched ICICI Prudential Booster Systematic Investment Plan (Booster SIP), a feature where unitholders can transfer variable amounts at regular intervals, based on the Equity Valuation Index (EVI) model. According to a press release, booster SIP allows investors to invest in a disciplined manner to the source scheme and transfer a variable amount to the target scheme in the range of 0.1X-10X of base installment amount depending on EVI model at regular intervals. Through this feature, a smaller amount of the base installment is invested when equity valuation is considered expensive. Conversely, when the valuation is considered cheap, the investment will be relatively higher.
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