2019: Issue 705, Week: 14th - 18th October
A Weekly Update from SMC (For private circulation only)
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Equity | 4-7 |
Derivatives | 8-9 |
Commodity | 10-13 |
Currency | 14 |
IPO | 15 |
FD Monitor | 16 |
Mutual Fund | 17-18 |
I
n the week gone by, global markets were left in confusion, if trade war deal between both US and China will be met. However, the news of mini deal between the two major economies brought the confidence back among investors group. As per the minutes of the Fed recent meeting, most Federal Reserve policymakers supported the need for an interest rate cut in September, but they remain increasingly divided on the path ahead for monetary policy. The recent consumption tax hike in Japan and weak export demand has dented the confidence of the market participants.
Back at home, Indian market too witnessed volatile movements tracking global as well as domestic factors. The government has raised dearness allowance by 5% and the hike, will cost the exchequer Rs 16,000 crore and will be effective from July, this year. However, this is expected to boost the dried consumption demand. On the flip side, the IMF has flagged a “more pronounced” slowdown in India as it called for a coordinated fiscal response to arrest the “synchronised slowdown in global growth”. Even Moody’s Investors Service has cut GDP forecast for 2019-20 to 5.8 per cent from earlier estimate of 6.2 per cent citing the reason that investment-led slowdown that has broadened into consumption, driven by financial stress among rural households and weak job creation. Meanwhile, India has moved down 10 places to rank 68th on an annual global competitiveness index, largely due to improvements witnessed by several other economies. Going forward, market is expected to continue its volatile trade tracking global markets and happenings in India. Besides, inflow and out flow of the foreign fund, crude oil prices, rupee movement will dictate the trend of the market. As we are into earning season, stock specific movement is expected in the market.
On the commodity front, Trade talks between the United States and China remained on the market's radar as the world's top two economies seek to resolve a more-than-ayear-long trade row that has slowed global economic growth. Bullion counter may witness profit booking at higher levels as hope of some progress in Sino-U.S. trade talks can increase risk appetite and reduce the safe haven demand of bullions, though the downside will get limited on Brexit concern and Iran tensions. Crude oil prices can witness further bounce back at lower levels as OPEC hinted at making deeper cuts in supply while optimism was revived over talks between the United States and China to end their trade war. Base metal counter can witness some bounce back at lower levels on trade talk’s optimism and supply concerns. Average Earnings Index +Bonus (Aug) of UK, German ZEW Economic Sentiment (Oct), CPI of Newzeland, UK, Canada and Euro Zone, Core Retail Sales and retail sales, Building Permits, Philadelphia Fed Manufacturing Index (Oct)¸ of US, GDP and Indus trail production of China etc are some very important triggers for this week.
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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
Automobile
• According to data from Society of Indian Automobile Manufacturers (Siam), India’s passenger vehicle sales slumped 23.7% year-on-year in September to 2,23,317 units, making it the 11th straight month of decline. In the year-ago period, passenger vehicle sales stood at 2,92,660 units. Passenger car sales declined a massive 33.4% to 1,31,281 units in September.
Information Technology
• Tata Consultancy Services announced it has expanded its strategic partnership with Legal & General (L&G), one of the UK's leading financial services groups and a major global investor, to help L&G transform into a digital workspace leveraging TCS' Machine First™ Delivery Model and design thinking approach.
Infrastructure
• Larsen & Toubro (L&T) has won contracts worth up to Rs 2,500 crore from domestic and international markets. The construction arm of L&T has won contracts for 400kV transmission line in Mozambique and for 220kV project in the UAE.
• Ashoka Buildcon has received an Order from SRIT India, for Kerala State Information Technology Infrastructure, Smart Infrastructure Project viz. 'Conducting Survey, Supply of Poles & Installation, laying of the overhead and underground Optic Fiber Cable, on existing Electricity Poles, Supply, Installation, Testing and Commissioning of Non-IT items.' The Value of the Project is Rs.313.72 crore. The duration of Project is 24 months from the date of commencement of the work.
Retail
• V-Mart Retail has opened four new stores, in the state of Arunachal Pradesh, Uttar Pradesh, Delhi and Jammu & Kashmir respectively. With this total number of stores increased to 243 stores in 186 cities across 19 states and total tally of stores in Arunachal Pradesh to 1, in Uttar Pradesh to 91, in Delhi to 3 and in Jammu & Kashmir to 7.
Pharmaceuticals
• Zydus Cadila has received the final approval from the USFDA to market Colesevelam Hydrochloride Tablets, (US RLD - Welchol), 625 mg. This medication is used along with a proper diet and exercise, to lower cholesterol in people with high levels of cholesterol in the blood. Lowering cholesterol decreases the risk of heart disease and helps prevent strokes and heart attacks. It will be manufactured at the group's formulations manufacturing facility at SEZ, Ahmedabad.
Metals
• Hindustan Zinc (HZL), the country’s largest miner for this metal and part of the London-based Vedanta group, has prepared an investment plan for $2 billion (Rs 14,000 crore) over the next five years, to raise annual capacity to 1.5 million tonnes (mt) from the current 0.8 mt.
Power
• JSW Energy and GMR Infrastructure have entered into exclusive talks for the sale of GMR’s Odisha power plant.
Capital Goods
• Bharat Heavy Electricals Limited (BHEL) has bagged a Rs 1600 crore equipment order for a greenfield 2x660 mw Khurja Super Thermal Power Project in Bulandshahr district of Uttar Pradesh.
INTERNATIONAL NEWS
• US jobless claims dropped to 210,000, a decrease of 10,000 from the previous week's revised level of 220,000. Economists had expected jobless claims to come in unchanged compared to the 219,000 originally reported for the previous week.
• US consumer price index was unchanged in September after inching up by 0.1 percent in August. Economists had expected another 0.1 percent uptick.
• US wholesale inventories edged up by 0.2 percent in August, matching the uptick in July. Economists had expected inventories to increase by 0.4 percent.
• US producer price index for final demand fell by 0.3 percent in September after inching up by 0.1 percent in August. The drop surprised economists, who had expected another 0.1 percent uptick.
• Core machine orders in Japan fell a seasonally adjusted 2.4 percent on month in August, the Cabinet Office said - standing at 875.3 billion yen. That missed expectations for a flat reading following the 6.6 percent decline in July.
• Producer prices in Japan were flat on month in September, the Bank of Japan said - matching forecasts following the 0.3 percent decline in August. On a yearly basis, producer prices were down 1.1 percent - again in line with expectations after sliding 0.9 percent in the previous month.
Stocks | *Closing Price | Trend | Date Trend Changed | Rate Trend Changed | SUPPORT | RESISTANCE | Closing S/l |
---|---|---|---|---|---|---|---|
S&P BSE SENSEX | 38127 | UP | 08.02.19 | 36546 | 36300 | 35300 | |
NIFTY50 | 11305 | UP | 08.02.19 | 10944 | 10900 | 10600 | |
NIFTY IT | 15319 | UP | 21.07.17 | 10712 | 15200 | 14800 | |
NIFTY BANK* | 28036 | UP | 30.11.18 | 26863 | 27700 | 27000 | |
ACC | 1444 | DOWN | 04.10.19 | 1488 | 1560 | 1590 | |
BHARTIAIRTEL | 384 | UP | 15.03.19 | 338 | 360 | 345 | |
BPCL | 488 | UP | 30.08.19 | 355 | 470 | 450 | |
CIPLA* | 442 | DOWN | 02.08.19 | 516 | - | 455 | |
SBIN | 255 | DOWN | 02.08.19 | 308 | 280 | 290 | |
HINDALCO | 187 | DOWN | 04.10.19 | 182 | 195 | 198 | |
ICICI BANK | 428 | UP | 20.09.19 | 418 | 420 | 410 | INFOSYS | 816 | UP | 14.12.18 | 706 | 780 | 760 |
ITC | 244 | DOWN | 31.05.19 | 279 | 260 | 270 | |
L&T** | 1428 | UP | 20.09.19 | 1412 | - | 1410 | |
MARUTI | 6689 | UP | 13.09.19 | 6450 | 6300 | 6200 | |
NTPC | 117 | DOWN | 16.08.19 | 118 | 126 | 130 | |
ONGC | 129 | UP | 20.09.19 | 134 | 123 | 120 | |
RELIANCE | 1350 | UP | 16.08.19 | 1278 | 1270 | 1250 | |
TATASTEEL | 339 | DOWN | 10.05.19 | 487 | 365 | 375 | |
*CIPLA has breached the resistance of 440 **LT has broken the support of 1430
Closing as on 11-10-2019
NOTES:
1) These levels should not be confused with the daily trend sheet, which is sent every morning by e-mail in the name of "Morning Mantra ".
2) Sometimes you will find the stop loss to be too far but if we change the stop loss once, we will find more strength coming into the stock. At the moment, the stop loss will be far as we are seeing the graphs on weekly basis and taking a long-term view and not a short-term view.
Meeting Date | Company | Purpose |
---|---|---|
16-Oct-19 | Gruh Finance | Merger |
17-Oct-19 | Tata Consultancy Services | Int. Div. 5.00 + Spl. Div. 40.00 |
17-Oct-19 | NIIT | Buyback |
24-Oct-19 | L&T Technology Service | Interim Dividend |
24-Oct-19 | Larsen & Toubro Infotech | Interim Dividend |
24-Oct-19 | MindTree | Stock Split |
30-Sep-19 | IL&FS Investment Managers | Interim Dividend |
Ex-Date | Company | Purpose |
---|---|---|
14-Oct-19 | Hindustan Unilever | Dividend - Rs 0.30 Per Share |
24-Sep-19 | Ajmera Realty & Infra India | Financial Results/Dividend |
14-Oct-19 | Delta Corp | Financial Results |
15-Oct-19 | ACC | Financial Results |
15-Oct-19 | Wipro | Financial Results |
16-Oct-19 | MindTree | Financial Results/Dividend |
16-Oct-19 | The Federal Bank | Financial Results |
17-Oct-19 | Dewan Hsg.Fin. Corp. | Financial Results |
18-Oct-19 | Ambuja Cements | Financial Results |
18-Oct-19 | Reliance Industries | Financial Results |
19-Oct-19 | LIC Housing Finance | Financial Results |
19-Oct-19 | HDFC Bank | Financial Results |
21-Oct-19 | UltraTech Cement | Financial Results |
21-Oct-19 | Axis Bank | Financial Results |
22-Oct-19 | Asian Paints | Financial Results/Dividend |
22-Oct-19 | Bajaj Finance | Financial Results |
22-Oct-19 | Asian Paints | Financial Results/Dividend |
23-Oct-19 | Castrol India | Financial Results |
23-Oct-19 | Larsen & Toubro | Financial Results |
23-Oct-19 | HCL Technologies | Financial Results/Dividend |
23-Oct-19 | Hero MotoCorp | Financial Results |
23-Oct-19 | Biocon | Financial Results |
23-Oct-19 | Bajaj Auto | Financial Results |
24-Oct-19 | Colgate Palmolive (India) | Financial Results |
24-Oct-19 | ITC | Financial Results |
25-Oct-19 | State Bank of India | Financial Results |
25-Oct-19 | Marico | Financial Results/Dividend |
26-Oct-19 | ICICI Bank | Financial Results |
4
5
Indian Hotels Co Limited
CMP: 382.90
Target Price: 179
Upside: 18%
Face Value (Rs.) | 1.00 |
52 Week High/Low | 164.10/117.25 |
M.Cap (Rs. in Cr.) | 18058.89 |
EPS (Rs.) | 2.39 |
P/E Ratio (times) | 63.57 |
P/B Ratio (times) | 4.15 |
Dividend Yield (%) | 0.33 |
Stock Exchange | BSE |
Investment Rationale
• The Indian Hotels Company (IHCL) and its subsidiaries, collectively known as Taj Group, is one of Asia's largest and finest group of hotels.
• The company's reimagined brandscape gave it the opportunity to sign 22 hotels with an inventory of over 3,200 rooms across brands in India and key international markets like London, Makkah, Kathmandu and Dubai.The company has opened five hotels during FY18-19 and are well poised to open one hotel per month in light of a healthy pipeline and confirmed momentum of signing new contracts.
On the development front, recently it has signed a strategic partnership with Singapore’s sovereign wealth fund GIC Pte Ltd to jointly invest around | 4,000 crore over three years. This platform would need IHCL to invest 30% of the equity while the JV would own hotels funded by a mix of debt and equity. This would enable Indian Hotels to reap the benefits of owning a property without significantly adding leverage on its balance sheet .
• The management of the company indicated capex of Rs4500 crore for FY20E which is expected to be driven by capex for Ginger, Santacruz, Taj Mansingh, SeleQtions Connaught, Holiday Village, maintenance activities and other hotels.
• The company also wants to reduce its dependence on the luxury segment and move hotels belonging to group entities to the holding company. The strategy also calls for monetising noncore assets, including residential apartments in Mumbai and elsewhere, besides forging new alliances with other Tata group companies.
• Taj's continued focus on the digital space, it has launched its new hybrid mobile application to provide ease of exploration and link to booking on
the mobile smartphone itself. It has also introduced a new booking engine including unbiased guest reviews and a rate check mechanism compared to online travel agencies like Expedia and Booking.com in order to drive direct bookings on the Brand website with an improved experience for the guest.
Risk
• Impact of changes in global and domestic economies,
• Competition
Valuation
The Company plans to continue to grow through a judicious mixture of owned and leased hotels, a derisked model along with its ability to attract management contracts. The company has ability to deliver improved returns on capital driven through product renovation, rigorous asset management, revenue maximization, cost control and reduced leverage and exit from non-core underperforming assets.Thus we expect the stock to see a price target of Rs 179 in 8 to 10 months time frame on an expected P/Bvx of 4.6 and FY20(BVPS) of Rs38.91.
Multi Commodity Exchange of India Limited
CMP: 1008.75
Target Price: 1199
Upside: 19%
Face Value (Rs.) | 10.00 |
52 Week High/Low | 1030.50/643.50 |
M.Cap (Rs. in Cr.) | 5144.63 |
EPS (Rs.) | 35.81 |
P/E Ratio (times) | 28.17 |
P/B Ratio (times) | 4.11 |
Stock Exchange | BSE |
Investment Rationale
• Multi Commodity Exchange of India (MCX) is a leading commodities exchange based on value of commodity futures contracts traded in India. MCX offers trading in varied commodity futures contracts across segments including bullion, industrial metals, energy and agricultural commodities.
• SEBI’s approval for Institutional participation and Indices launch for commodity derivatives are welcome steps and will expand the market. MCX has 92% market share of the commodity derivatives segment and is a market leader in base metals, energy and precious metals and stones segments (having more than 96% market share in the Indian Commodity futures space).
• Rising volumes both, in gold and several other commodities, have helped sharply increase MCX's revenues and profit in the June quarter. Average daily volumes for Q1FY20 were up 1.8% qoq while it surged ~13% on yoy basis. In the first quarter, Crude oil accounted for 41% of trading vs. 30% in Q1 FY19, while Gold at 17% as compared to 12% in Q1 FY19.
• In Q1 FY20, Revenue was up 9.0% YoY to Rs.79.5 cr led by 9.3% YoY increase in volume. Realizations declined 1.8% YoY. Volume growth was strong at 22.5% in FY19. EBITDA margin was better than expected at 34.9%, +305bps QoQ led by lower royalties to LME, cost control and absence of oneoffs. Margin expansion of ~760bps over the past two quarters is encouraging.
• SEBI has recently allowed participation of Mutual
Funds and Portfolio Managers in the commodity derivative markets which is very beneficial for the future and growth of the industry.
Risk
• Falling prices of commodities causing decline in contract values
• Competition from other exchanges
Valuation
Its monopolistic market share has remained intact, given that the volumes have been rising, which clearly shows, the preference of MCX over competitors. Going forward, MCX will continue to augment product offerings after seeking necessary regulatory approval by enabling options trading in multiple commodities as well as trading in indices and exotic derivative products such as weather derivatives. Thus it is expected that the stock will see a price target of Rs. 1199 in 8-10 months time frame on the current PB multiple of 4.11 times and FY20E BVPS of Rs. 291.7
Source: Company Website Reuters Capitaline
Above calls are recommended with a time horizon of 8 to 10 months.
6
The stock closed at Rs 807.95 on 11th October, 2019. It made a 52-week low of Rs 508.05 on 23rd October 2018 and a 52-week high of Rs. 835.00 on 20th September 2019. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 716.10
Short term, medium term and long term bias are looking positive for the stock as it is trading in uptrend. Moreover, it is forming an “Inverted Head and Shoulder” pattern on weekly charts and likely to give the breakout of same so we can expect more upside from current levels. Therefore, one can buy in the range of 790-795 levels for the upside target of 880-900 levels with SL below 760 levels.
The stock closed at Rs 676.50 on 11th October, 2019. It made a 52-week low at Rs 485.30 on 10th October 2018 and a 52-week high of Rs. 705 on 23rd September 2019. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 603.12
As we can see on charts that stock is trading in higher highs and higher lows on weekly charts which is bullish in nature. Apart from this, it is forming a “Bull Flag” pattern on daily charts and trading on verge of breakout of pattern so follow up buying can continue for coming days. Therefore, one can buy in the range of 667-672 levels for the upside target of 730-750 levels with SL below 640 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
7
Indian markets witnessed a roller coaster ride in the week gone by as volatility grip the market on back of mixed global cues and earning season. However with gains of nearly 1% on weekly basis both nifty and bank nifty ended the week in positive territory. From derivative front as well the tug of war was seen among bulls and bears as both call and put writers were seen actively shifting their positions. For coming week we believe that volatility will likely to grip the market once again as the trade talks between the US and China will also remain on the participants’ radar. The Implied Volatility (IV) of calls was up and closed at 16.40% while that for put options closed at 17.55%. The Nifty VIX for the week closed at 17.23% and is expected to remain volatile. PCR OI for the week closed at 0.93.For coming week we expect that nifty need to take a decisive move above 11450 for any further upside in coming sessions. However on downside 11150-11100 will act as major support and as far we are holding above that the bias is likely to remain bullish
8
**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
9
Turmeric futures (Nov) is likely to plunge further to test 5500-5300 levels. The stockiest are not showing interest in buying as only poor quality turmeric is arriving in the spot markets. In the beginning of the calendar year, the yellow spice was sold at Rs.8,300 a quintal & currently it is being sold atRs.7,100 a quintal at the Erode Turmeric Merchants Association Sales yard. At the Regulated Marketing Committee, the finger turmeric was sold at Rs.5,669- 6,889 a quintal; the root variety was sold at Rs.5,189-6,329 a quintal. The reason being is that the demand has not been good from North India. Jeera futures (Nov) is expected to trade with a downside bias & move lower towards 16000-15700 levels. The reason attributed is weak buying and on the likelihood of an increase in supply as sowing is expected to be better this season. It is likely to start after Diwali. Sentiment has also dampened on expectation of a rise in acreage in 2019-20 (Oct-Sep) by 10-20% because of availability of water. Jeera needs less water but as the rains continue unabated, the sowing which should start by next week. Good rains this year are likely to push up production. Dhaniya futures (Nov) is expected to consolidate in the range of 5830-6130 levels. In the upcoming season, the output of coriander may be higher as the monsoon has been good in major growing areas of Gujarat, Rajasthan and Madhya Pradesh. Its sowing is expected in November and hence there is still time. However, if the acreage rises for sowing, then the fall in prices will be limited as the present stock has depleted.
Bullion counter may witness profit booking at higher levels as hope of some progress in Sino-U.S. trade talks can increase risk appetite and reduce the safe haven demand of bullions. But downside will get limited on Brexit concern and Iran tensions. Gold can test 37500 while facing resistance near 38600 while silver can test 45000 while facing resistance near 47000. Traders expressed optimism the two sides might be able to ease a 15-month trade war and delay a U.S. tariff hike scheduled from Oct 15 as U.S scheduled to hike tariffs on $250 billion worth of Chinese goods, to 30% from 25%. Meanwhile Irish Prime Minister Leo Varadkar stated that a Brexit deal could be clinched by the end of October to allow the United Kingdom to leave the European Union in an orderly fashion. U.S. Federal Reserve Chair Jerome Powell last week flagged openness to further rate cuts to fend off global economic risks. The FOMC meeting minutes released recently stated that the central bank is in favour of more rate cut in the near future to avoid economic slowdown. Global gold-backed Exchange Traded Funds (ETFs) reached their highest levels in September, adding 75.2 tonnes to a total of 2,808 tonnes during the month. In the month of September, India imported only 26 tonnes of gold, which is 68.18 percent lower than 81.71 tonnes imported a year ago. And People’s Bank of China picked up more gold last month, raising holdings to 62.64 million ounces in September from 62.45 million in August.
Soybean futures (Nov)is likely to hold on to the support near 3610, while the upside may remain restricted till 3730 levels. India’s soybean output is likely to fall by 17.74 percent this year on a sharp decrease in average yield across the country. The Soybean Processors’ Association (SOPA) said in its survey that India’s total soybean output may remain at 89.94 lakh tonnes in 2019, down 17.74 percent from 109.33 lakh tonnes in 2018. Average yield is estimated at 836 kg per hectare for the current harvesting season from 1009 kg per hectare in the previous season. On the CBOT, U.S soybean futures (Nov) is expected to trade on a bullish note to test $9.50 a bushel. This rally is being triggered by the increasing the buying appetite by China for U.S Soybean. In the past few weeks, China has purchased around 2 million mt of US-origin soybeans, to show its seriousness in resolving the trade dispute with the Americans. Mustard futures (Nov) is expected to trade range bound with a positive bias in the range of 4070-4140 levels. The agriculture ministry has proposed an increase in minimum support price (MSP) of 5.3% increase in the mustard MSP, which will take the existing floor price of Rs.4,200 a quintal to Rs.4,425.The government has been promoting cultivation of pulses and oilseeds over foodgrains for the past few years. CPO futures (Oct) is likely to trade with a downside bias in the range of 542-551 levels. The reason being is the negative sentiments prevailing in the Malaysian palm oil market due to swelling inventories which rose for the first time in seven months in September.
Crude oil prices witness bounce back at lower levels as OPEC hinted at making deeper cuts in supply while optimism was revived over talks between the United States and China to end their trade war. Mohammad Barkindo, Secretary-General of the Organization of the Petroleum Exporting Countries (OPEC), stated that all options were on the table, including a deeper supply cut to balance oil markets. Crude oil may recover towards 4050 while taking support near 3600 levels. OPEC lowered its 2019 global oil demand growth forecast to 0.98 million barrels per day (bpd), while leaving its 2020 demand growth estimate unchanged at 1.08 million bpd, according to OPEC’s monthly report. Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) has granted Nigeria a higher oil output target under an OPEC-led supply cut deal, lifting the quota to 1.774 million barrels per day (bpd) from 1.685 million bpd. Nigeria secured higher production target from the OPEC and a force majeure over exports from key Bonny Light stream was lifted. EIA cut its 2020 world oil demand growth forecast by 100,000 barrels per day (bpd) to 1.30 million. EIA expected the US production to reach record high of 12.26 M bpd in 2019 providing an upside revision to previous expected rise of 1.25 Mbpd. Natural gas may dip further lower as it can test 150 while taking resistance near 167 . The weather is expected to be near normal in the US for the next 6-10 whereas 8-14 days are forecasted to show 30%-50% above the normal temperature levels .
Cotton futures (Oct) make attempt to break the support near 19320 & descend further towards 19200-19000 levels. The ground report is showing strong crop vigor in both Gujarat and Maharashtra. Currently the crop is in the boll stage in central India. USDA estimates India cotton production for 2019/20 at 30.5 million 480-pound bales, up 3 percent from last month and up 15 percent from the previous year. Yield is estimated at 515 kilograms per hectare, up 12 percent from last year. In the international market, ICE cotton futures may trade sideways in the range of 61-64 cents per pound. In the latest estimates given by the US Department of Agriculture, U.S cotton production was lowered less than 1percent, to 21.7 million bales, largely the result of a reduction in Texas. At 7.0 million bales, U.S. ending stocks in 2019/20 are projected at 36 percent of use, compared with 27 percent in 2018/19. Chana futures (Nov) may witness a consolidation in the range of 4300-4400 levels. On the spot markets, the buyers are buying only to meet their immediate requirement for crushing amid lack of demand in the domestic market and also are cautious at prevailing rates as government is holding major stock of Chana. Actual demand in chana dal and besan from consumption centres is seen limited in the market. Mentha oil futures (Oct) may witness a rally till 1255, taking support near 1210levelsdue a fall in warehouse stocks. Mentha oil stocks at MCX-accredited warehouses were at 4,21,426.62 Kgs at end of last week, lesser by 32,401.15Kgs during the beginning of this month, according to data from the bourse.
Cotton futures (Oct) make attempt to break the support near 19320 & descend further towards 19200-19000 levels. The ground report is showing strong crop vigor in both Gujarat and Maharashtra. Currently the crop is in the boll stage in central India. USDA estimates India cotton production for 2019/20 at 30.5 million 480-pound bales, up 3 percent from last month and up 15 percent from the previous year. Yield is estimated at 515 kilograms per hectare, up 12 percent from last year. In the international market, ICE cotton futures may trade sideways in the range of 61-64 cents per pound. In the latest estimates given by the US Department of Agriculture, U.S cotton production was lowered less than 1percent, to 21.7 million bales, largely the result of a reduction in Texas. At 7.0 million bales, U.S. ending stocks in 2019/20 are projected at 36 percent of use, compared with 27 percent in 2018/19. Chana futures (Nov) may witness a consolidation in the range of 4300-4400 levels. On the spot markets, the buyers are buying only to meet their immediate requirement for crushing amid lack of demand in the domestic market and also are cautious at prevailing rates as government is holding major stock of Chana. Actual demand in chana dal and besan from consumption centres is seen limited in the market. Mentha oil futures (Oct) may witness a rally till 1255, taking support near 1210levelsdue a fall in warehouse stocks. Mentha oil stocks at MCX-accredited warehouses were at 4,21,426.62 Kgs at end of last week, lesser by 32,401.15Kgs during the beginning of this month, according to data from the bourse.
10
ALUMINIUM MCX (OCT) contract closed at Rs. 135.30 on 10th Oct’19. The contract made its high of Rs. 143.90 on 5th Sep’19 and a low of Rs. 133.50 on 3rd Oct’19. The 18-day Exponential Moving Average of the commodity is currently at Rs.137.05. On the daily chart, the commodity has Relative Strength Index (14-day) value of 30.231.
One can sell near Rs. 138 for a target of Rs. 128 with the stop loss of Rs. 143.
COPPER MCX (OCT) contract closed at Rs. 441.55 on 10th Oct’19. The contract made its high of Rs. 460.95 on 13th Sep’19 and a low of Rs. 431.70 on 1st Oct’19. The 18-day Exponential Moving Average of the commodity is currently at Rs. 442.46. On the daily chart, the commodity has Relative Strength Index (14-day) value of 47.994.
One can buy near Rs. 440 for a target of Rs. 456 with the stop loss of Rs. 432.
CHANA NCDEX (NOV) contract was closed at Rs. 4323.00 on 10th Oct’19. The contract made its high of Rs. 4517.00 on 26th Sep’19 and a low of Rs. 4010.00 on 18th Sep’19. The 18-day Exponential Moving Average of the commodity is currently at Rs. 4268.37. On the daily chart, the commodity has Relative Strength Index (14-day) value of 57.723.
One can buy above Rs. 4360 for a target of Rs. 4580 with the stop loss of Rs 4250.
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• An explosion has set an Iranian oil tanker on fire near the Saudi port city of Jeddah
• Chile's Codelco, the world's biggest copper producer, has agreed with some Chinese customers to keep its physical copper premium for 2020 unchanged from this year at $88 a tonne.
• Japan's copper output in the second half of the 2019/20 financial year to March 31 is forecast to climb 2.5% from a year earlier.
• The government is planning to set up a Rs 6,660 crore fund to nurture 10,000 farmer producer organisations (FPOs) across the country over the next five years.
• India and China signed more than 120 MoUs for export of various products from India, including sugar, chemicals, fish, plastics, pharmaceuticals and fertilisers.
• U.S soybean production is forecast at 3.6 billion bushels,down 83 million, mainly on lower yield. – USDA
• U.S cotton production is lowered less than 1percent, to 21.7 million bales, largely the result of a reduction in Texas. – USDA
• The state-run Cotton Corporation of India (CCI) has begun purchases of the cotton crop in Rajasthan and Punjab.
• India’s total soybean output may remain at 89.94 lakh tonnes in 2019, down 17.74 percent from 109.33 lakh tonnes in 2018, according to SOPA.
• Belgium’s Financial Services and Markets Authority have opened a formal investigation into zinc group Nyrstar, now majority-owned by commodities trader Trafigura.
• Venezuela's cash-strapped state-run oil company PDVSA expects crude output to rebound to above 1.2 million barrels per day (bpd) next year.
Trade talks between the United States and China remained on the market's radar as the world's top two economies seek to resolve a more-than-a-year-long trade row that has slowed global economic growth. The Baltic Exchange’s main sea freight index, which tracks rates for ships ferrying dry bulk commodities, hit a two-week high on Thursday, as vessel rates across the board continued to strengthen. Oil prices gained in second half of the week after OPEC indicated it expected supply from non-OPEC sources to grow slightly less than previously thought. Non-OPEC supply is expected to grow 2.20 million barrels per day, down from 2.25 million in OPEC’s September report. OPEC lowered its 2019 global oil demand growth forecast to 0.98 million barrels per day (bpd), while leaving its 2020 demand growth estimate unchanged at 1.08 million bpd, according to OPEC's monthly report. Natural gas prices turned weaker. The U.S. EIA reported Thursday that domestic supplies of natural gas rose by 98 billion cubic feet for the week ended Oct. 4. The data were expected to show a build of 97 billion cubic feet, on average. US and China might be close to announcing a partial trade deal later last week, averting a further escalation in trade tensions boosted oil and some base metals prices. Everything doesn’t look rosy as earlier last week, the U.S. blacklisted eight Chinese technology firms and trade talk was shortened. In base metals nickel remain traded in upper zone but with limited upside. Copper and zinc were marginally higher. Bullion traded weak U.S. President Donald Trump’s remarks on progress in Sino-U.S. trade talks lifted risk.
India's soybean production in the year starting Oct 1 is likely to drop at least 25% as adverse weather conditions in Madhya Pradesh, Rajasthan and Maharashtra has badly damaged the crop. Crop losses in Madhya Pradesh and Rajasthan are worse, while the condition in Maharashtra is relatively better. As cotton prices come under pressure at the start of harvest, state-run Cotton Corporation of India (CCI) has begun purchases of the fibre crop in Rajasthan and Punjab. However, CCI’s purchases are in small quantities as the moisture content in the cotton being brought into the market is very high. Industry sources believe that good cotton will start arriving only by the first week of November; with a delay of 40-45 days. Castor prices strengthened from the multi week low on lower level buying. . Jeera prices saw decline due to a sharp rise in arrivals. Cardamom traded firm as sentiments were upbeat due to strong festival season demand & lesser supply. This is the peak season for cardamom.
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Bombay Stock Exchange has expanded its agriculture contract offering by launching futures on chana and soyabean on October 07, 2019 with the option of compulsory delivery. BSE has also launched castor futures contract on its commodity platform despite of controversy in NCDEX over investors defaulting in castor seed contract. All the three new contracts are starting from November expiry. BSE has started three contracts of chana and castor seed expiring from November to January while four new contracts in soybean expiring from November to February has been launched.
Contract Specification of Soybean, chana and castorseed Futures
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7th OCT | Boris Johnson allies admit hopes of Brexit deal at EU summit are effectively dead. |
9th OCT | No special liquidity window for NBFC’s, says RBI deputy governor. |
10th OCT | Trump sees a ‘good chance’ of a US-China trade deal. |
10th OCT | Sterling rallies on upbeat private talks between UK and Irish leaders. |
Indian Rupee pared its last week loss amid optimism in US and China trade talks. Ahead of the meet, currency market positioned for dollar sell-off to opt for the riskon opportunity. Yesterday US President Donald Trump tweeted that he would be meeting Mr. He on Friday, a positive sign for the talks. Mr. Trump said today was a “Big day of negotiations with China”, adding “They want to make a deal, but do I?”, although The Trump administration has hinted positive hope for US firms to resume some sales to Huawei. And there are rumors that a US-China currency deal could be under discussion. But we are casting doubt that this marks a major breakthrough in the trade negotiations. The “currency deal” may trigger Yuan to rally further but it seems likely to simply involve a pledge by China not to devalue the renminbi. Nevertheless final outcome on late Friday evening will direct the immediate trend in the market including Indian Rupee. Additionally this week, the minutes of the September FOMC meeting underlined that the Fed is prepared to cut rates further, but provided few hints of when that might happen. That suggests the next 25bp cut may not come until the December meeting. That said, the minutes repeated the hints made by Chair Jerome Powell on Tuesday that the Fed will resume the “organic” growth of its balance sheet later this month. Next week important economic release will be US and UK retail sales for the month of September will give further measures of the consumer confidence.
USDINR is likely to remain in the range of 70.50 and 71.60 in the next week.
USD/INR (OCT) contract closed at 71.1850 on 10th Oct’19. The contract made its high of 71.3575 on 9th Oct’19 and a low of 70.0625 on 10th Oct’19 (Weekly Basis). The 14-day Exponential Moving Average of the USD/INR is currently at 71.27.
On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 46.22. One can buy at 71.00 for the target of 71.60 with the stop loss of 70.70.
EUR/INR (OCT) contract closed at 78.5750 on 10th Oct’19. The contract made its high of 78.6225 on 10th Oct’19 and a low of 78.14 on 7th Oct’19 (Weekly Basis). The 14-day Exponential Moving Average of the EUR/INR is currently at 78.47.
On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 46.33. One can buy at 78.50 for a target of 79.10 with the stop loss of 78.20.
GBP/INR (OCT) contract closed at 87.2625 on 10th Oct’19. The contract made its high of 87.86 on 7th Oct’19 and a low of 86.8925 on 9th Oct’19 (Weekly Basis). The 14-day Exponential Moving Average of the GBP/INR is currently at 87.87.
On the daily chart, GBP/INR has Relative Strength Index (14-day) value of 41.45. One can sell below 89.50 for a target of 88.50 with the stop loss of 90.
JPY/INR (OCT) contract closed at 66.32 on 10th Oct’19. The contract made its high of 66.80 on 7th Oct’19 and a low of 66.1725 on 10th Oct’19 (Weekly Basis). The 14-day Exponential Moving Average of the JPY/INR is currently at 66.45.
On the daily chart, JPY/INR has Relative Strength Index (14-day) value of 46.04. One can buy above 65.90 for a target of 66.50 with the stop loss of 65.60.
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IREDA, Shyam Steel get Sebi go ahead for IPO
Shyam Steel's IPO consists of fresh issue of up to Rs 200 crore and an offer for sale of up to 66.70 lakh shares. State-owned Indian Renewable Energy Development Agency (IREDA) and Kolkata-based firm Shyam Steel Industries have received markets regulator Sebi's approval to float initial public offerings. IREDA, which filed its draft IPO papers with the regulator in July, received its observations on September 27, latest update with the Securities and Exchange Board of India.
UTI AMC plans to launch IPO in next six months, eyes Rs 3,000 crore from promoter stake sale
UTI Asset Management Company (AMC) plans to launch an initial public offer (IPO) within the next six months. Currently, only two AMCs, Reliance Nippon Life AMC and HDFC AMC, are listed on bourses. UTI AMC is expected to fetch a value of Rs 12,000-13,000 crore and raise funds in the range of Rs 2,500-3,000 crore, according to a report in The Economic Times.
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* For Application of Rs.50 Lac & above, Contact to Head Office.
* Email us at fd@smcindiaonline.com
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Reliance Mutual Fund renamed as Nippon India Mutual Fund
Nippon Life entered Reliance AMC first by buying a 26 percent stake in 2012 and now owns as much as 75 percent, making it the single largest promoter. Nippon has paid ₹6,000 crore for 75 percent stake. Reliance Mutual Fund has been renamed as Nippon India Mutual Fund.
Aditya Birla Sun Life Mutual Fund
Aditya Birla Sun Life Mutual Fund writes down Essel exposure in 3 schemes.
PPFAS Mutual Fund- Changes in TER
PPFAS Mutual Fund has reduced the total expense ratio or TER on the direct plan of Parag Parikh Long Term Equity Fund by 10 basis points (100 basis points = 1 per cent), the fund house said. The new TER of 1.01 per cent will come into effect on October 15.
Average Aum growth of Mutual Fund Industry
The 44-player mutual fund industry witnessed net outflows of Rs 1.51 lakh crore in September on the back of a large outgo from liquid, money market and ultra-short duration funds. In the first six months (April-September) of the current financial year (FY20), the 44-player domestic mutual fund industry posted average AUM growth of just 3.59 percent. In value terms, as on September-end, the average AUM of the mutual fund industry stood at 25.68 lakh crore as against 24.79 lakh crore in April, as per data available on The Association of Mutual Funds in India website.
Registrar and Transfer Agent (RTA) Karvy Fintech now owns Sundaram BNP Paribas Fund
Registrar and Transfer Agent (RTA) Karvy Fintech now owns Sundaram BNP Paribas Fund Services. RTA Sundaram BNP Paribas Fund Services was a joint venture between Sundaram Finance and BNP Paribas Securities Services. In this joint venture, Sundaram Finance owned 51% with BNP Paribas Securities Services holding the rest 49%.
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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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Mr. S C Aggarwal (CMD, SMC Group ) at the 2nd Sanjeevni TV National Awards & Conclave 2019 held on Sunday, 1st September 2019 at Hotel Roseate House Arrow City, Delhi.
Mr. Ajay Garg (Director & CEO, SMC Group) during an Investor Awareness Seminar organized in association with NSE & NSDL held on Friday, 27th September 2019 at Hotel Courtyard Marriott, Bhopal.
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