2020: Issue 726, Week: 9th - 13th March
A Weekly Update from SMC (For private circulation only)
2020: Issue 726, Week: 9th - 13th March
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 saw steep fall as the concerns rose that I the hit to the global economy would be severe as the virus spreads beyond China to as many as 90 countries. Most global markets suffered their worst weekly fall since the 2008 global financial crisis last week. Central bankers across the globe tried in a coordinated manner to soothe financial markets and to support the damage that the COVID-19 could do to the global growth by cutting interest rates and opening of credit lines by the government and IMF. Fed had cut interest rates by 50bp, there is large expectation that Fed will again cut another 50 bp when Fed policymakers gather March 17-18. The IMF has made available about $50 billion through its rapiddisbursing emergency financing facilities for low income and emerging market countries that could potentially seek support. Even the World Bank on Tuesday announced an initial $12 billion in immediate funds to assist countries grappling with the health and economic impacts of the coronavirus outbreak.
Back at home, Indian stock market witnessed a volatile movement as fears over coronavirus cases and its economic fallout continued weighing on sentiment. The sentiment of the investors got further deteriorated after the Reserve Bank of India superseded the board of YES Bank and imposed a 30-day moratorium on it “in the absence of a credible revival plan” amid a “serious deterioration” in its financial health. However, RBI Governor has said that the central bank is prepared to face the challenges arising out of the Yes Bank situation. Earlier RBI said it stands ready to safeguard the country’s banking system from financial and market risks stemming from the spread of Covid-19, citing expectations of “coordinated policy action” by central banks around the world amid threats to global demand and currency movements. Despite the assurance, the Indian rupee too continued its downward journey against the US dollar amid mounting fears of a coronavirus-led economic slowdown. Meanwhile, the deadly virus is choking flows into Indian markets from foreign funds domiciled in Japan, Germany, South Korea and China. Going forward, stock markets across the globe are unlikely to see a sustained rebound until the spread of the coronavirus epidemic slows. Besides, the rupee movement, inflow and outflow of Funds, crude oil prices, macroeconomic data will continue to give the direction to the market.
On the commodity market front, some revival was seen in the last week; however it is tough to say, if the recovery will continue in coming week as Coronavirus is continuously hunting sentiments of the market participants. CRB saw marginal gain; whereas many agri commodities noticed value buying after the fall of many weeks. Furthermore, the Oil producer group known as OPEC+, which is currently reducing output by roughly 1.2 million barrels per day to support prices, is due to meet in Vienna on March 5-6. In Bullion counter, yellow metal can continue its upside momentum as mounting worries over the economic fallout from the fast-spreading coronavirus drove investors towards the safe-haven metal. Gold may move towards 45800 levels while taking support near 43500 levels and silver can test 48900 levels while taking support near 47000 levels. Crude oil prices may continue to remain under selling pressure as worries about demand for fuel being sapped by the global coronavirus outbreak. Unemployment Rate of Canada, Change in Non-farm Payrolls and Unemployment Rate of US etc are some high importance data scheduled this week.
SMC Global Securities Ltd. (hereinafter referred to as “SMC”) is a registered Member of National Stock Exchange of India Limited, Bombay Stock Exchange Limited and its associate is member of MCX stock Exchange Limited. It is also registered as a Depository Participant with CDSL and NSDL. Its associates merchant banker and Portfolio Manager are registered with SEBI and NBFC registered with RBI. It also has registration with AMFI as a Mutual Fund Distributor.
SMC is a SEBI registered Research Analyst having registration number INH100001849. SMC or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing /dealing in securities market.
SMC or its associates including its relatives/analyst do not hold any financial interest/beneficial ownership of more than 1% in the company covered by Analyst. SMC or its associates and relatives does not have any material conflict of interest. SMC or its associates/analyst has not received any compensation from the company covered by Analyst during the past twelve months. The subject company has not been a client of SMC during the past twelve months. SMC or its associates has not received any compensation or other benefits from the company covered by analyst or third party in connection with the research report. The Analyst has not served as an officer, director or employee of company covered by Analyst and SMC has not been engaged in market making activity of the company covered by Analyst.
The views expressed are based solely on information available publicly available/internal data/ other reliable sources believed to be true.
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
Economy
• According to the survey data from IHS Markit showed, India's service sector expanded at the fastest pace in seven years in February, with increases in new export orders and business confidence. The services Purchasing Managers' Index rose to 57.5 in February from 55.5 in January. A score above 50 suggests expansion.
• DrReddys Laboratories announced that the audit of the company's API Manufacturing Plant - 5 at Miryalaguda, Nalgonda District, Telangana, by the US FDA, has been completed on 05 March 2020. The company has been issued a Form 483 with three observations.
• Alembic Pharmaceuticals has received final approval from the US Food & Drug Administration (USFDA) for its Abbreviated New Drug Application (ANDA) Doxycycline Hyclate Tablets USP, 20 mg. The approved ANDA is therapeutically equivalent to the reference listed drug product (RLD) Periostat Tablets, 20 mg of Galderma Laboratories, L.P. (Galderma). Doxycycline Hyclate Tablets are indicated for use as an adjunct to scaling and root planing to promote attachment level gain and to reduce pocket depth in patients with adult periodontitis.
• ZydusCadila has received final approval from the USFDA to market Emtricitabine and TenofovirDisoproxil Fumarate Tablets, 200 mg/300 mg (US RLD: Truvada® Tablets) and tentative approval for the strengths of 100 mg/ISO mg, 133 mg/200 mg, and 167 mg/250 mg, of the same drug.
Consumer Durables
• Voltas has launched the new Voltas Maha Adjustable Inverter AC. Based on the cultural insight of Indians opting to ‘adjust', Voltas' MahaAdjustable Inverter AC comes with the unique value proposition of ‘Flexible Air Conditioning' that allows the user to choose from multiple tonnage options. Consumers have the ability to switch from 1.5 Ton to 1 Ton capacity or 2 Ton, depending on the ambient heat or number of people in the room; leading to savings and optimization of running cost.
Power
• Jaguar Land Rover India announced that it has entered into a partnership with Tata Power to offer end-to-end EV charging solutions. Tata Power will provide charging solutions for Jaguar Land Rover in India, across its retail network of 27 outlets in 24 cities and at customer's residence and/or office.
Realty/ Construction
• L&T Construction has bagged an order from a prestigious client in the Sultanate of Oman for the design and execution of a water infrastructure project to enhance the Al Dhakhlia Water Transmission System, Phase - II. This is a repeat order from the client and has been secured under international competitive bidding.
Retail
• Reliance Retail has acquired a Coimbatore-based retail company that operates more than two dozen grocery outlets and the buy-out will help the Mumbai conglomerate to expand its presence in the southern state.
INTERNATIONAL NEWS
• According to the International Monetary Fund Managing Director Kristalina Georgieva said, Global growth this year would be much lower than 2019 level as the coronavirus, or COVID-19, spreads to several countries hurting economic activity.
• US factory orders slid by 0.5 percent in January after surging up by 1.9 percent in December. Economists had expected factory orders to edge down by 0.1 percent.
• US labor productivity climbed by 1.2 percent in the fourth quarter compared to the previously reported 1.4 percent jump. Economists had expected the pace of productivity growth to be unrevised from the initial estimate.
• US initial jobless claims edged down to 216,000, a decrease of 3,000 from the previous week's unrevised level of 219,000. Economists had expected jobless claims to slip to 215,000.
• European Central Bank President Christine Lagarde surprised markets as the bank chose to leave rates unchanged, but there was relief in the form of fresh stimulus measures that included additional EUR 120 billion bond purchases, as the Eurozone is facing a "major shock" from the coronavirus, or Covid-19, outbreak.• According to the preliminary data from the Cabinet Office, Japan's leading index fell in January after rising in the previous month. The leading index, which measures the future economic activity, fell to 90.3 in January from 91.0 in December. Economists had expected a score of 91.3. A similar reading was seen in November 2009.
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TATA CONSULTANCY SERVICES LIMITED
CMP: 2124.90
Target Price: 2456
Upside: 16%
| Face Value (Rs.) | 1.00 |
| 52 Week High/Low | 2296.00/1929.00 |
| M.Cap (Rs. in Cr.) | 797344.25 |
| EPS (Rs.) | 86.39 |
| P/E Ratio (times) | 24.60 |
| P/B Ratio (times) | 8.41 |
| Dividend Yield (%) | 1.41 |
| Stock Exchange | BSE |
Investment Rationale
• Tata Consultancy Services Limited (TCS) is engaged in providing information technology (IT) services, digital and business solutions. The Company's segments include banking, finance and insurance services (BFSI); manufacturing; retail and consumer packaged goods (CPG); telecom, media and entertainment, and others, such as energy, resources and utilities, hi-tech, life science and healthcare, s-Governance, travel, transportation and hospitality, and other products.
• The company reiterated its focus on investing heavily in up skilling mid-level employees. In addition, it was also indicated that attrition is not being looked at as a management tool.
• During Q3FY20, the company's order book for the quarter was at $6 billion. Pipeline of orders continue to be strong and well distributed in-terms of sub vertical and geography.
• The number of $100 million clients remained flat on a sequential basis during the quarter, with total clients to 47. The number of $50 million clients increased by one on a q-o-q basis and by three on a y-o-y basis. The number of clients under the $20 million client bucket increased by seven on a sequential basis.
• The management believes EBIT margin would bounce back in the coming quarters on account of pyramid rationalisation and control on subcontracting expenses. Further, margin of the retail and BFSI verticals would improve with the return of growth in the respective verticals.
• Total employees count as end of Dec 2019 was 446675 with net addition for 9mFY20 being 22390 associates. The LTM attrition in IT services is
12.2%. The hiring in Q3FY20 moderated after spiking in hiring in Q2FY20. Having on boarded over 30000 trainees in H1FY20, the company has worked on driving up utilisation in Q3FY20 and had good outcomes.
Risk
• Currency Fluctuation
• Structural change in business model
• Regulatory Changes
Valuation
The company is well positioned to benefit from the growing demand for digital technology. Further, the company is well placed from a competitive perspective, especially in newer technologies. A stable management along with the ability to structure large multi-service deals and resilient margin performance would help TCS maintain its growth trajectory in the long term. Thus, it is expected that the stock will see a price target of Rs.2456 in 8 to 10 months time frame on target PEx of 26 x and FY21 EPS of Rs.94.45.
HDFC BANK LIMITED
CMP: 1151.65
Target Price: 1385
Upside:20%
| Face Value (Rs.) | 1.00 |
| 52 Week High/Low | 1304.10/1035.13 |
| M.Cap (Rs. in Cr.) | 631319.50 |
| EPS (Rs.) | 47.93 |
| P/E Ratio (times) | 24.03 |
| P/B Ratio (times) | 3.74 |
| Stock Exchange | BSE |
Investment Rationale
• The financial performance of the bank remained healthy during Q3FY20 as compared to its peers and management expects retail segment would play vital role to sustain its credit growth and core net interest margin.
• Advances grew by 20% end December 2019 over December 2018. The domestic retail loans grew at slower pace of 14%, while wholesale loans jumped 27%. Overseas advances constituted 2% of total advances compared with 3% end September 2019. CASA deposits of the bank increased at accelerated pace of 22% with savings account deposits rising 18% to Rs 277928 crore and current account deposits jumping 29% to Rs 143900 crore.
• The liquidity coverage ratio (LCR) of the bank has further increased to 140% end December 2019 from 133% end September 2019 with the continuous focus on deposits, which has impacted the net interest income growth of the bank.
• Net interest income growth moderated to 13% to Rs 14172.90 crore. The net interest margin of the bank was steady on sequential basis. Its interest income rose at 13% to Rs 29369.72 crore, while interest expenses also rose at 14% to Rs 15196.82 crore.
• The Bank’s total Capital Adequacy Ratio (CAR) as per Basel III guidelines was at 18.50% as on December 31, 2019 (17.50% as on September 30, 2018) as against a regulatory requirement of 11.075%. The bank has exhibited sharp decline in ratio of risk weighted assets to assets to 68.2% end December 2019 from 72.7% end September 2019 on account of better mix of assets, improved market risk, ratings improvements, incremental lending to public sector units etc.
• Provisions were quite high on the back of contingent provisions in various sectors, NBFC/HFC and change in accelerated provisioning on unsecured NPA book and business growth was
slower than usual run rate but the NIM profile remained stable and in a broad range. The management sees NII growth remained strong on loan mix towards retail growth.
• The bank hopes to bring the cost-to-income down by 300- 400 basis points over the next few years mostly through digitizing processes and digital marketing initiatives.
Risk
• slowdown in demand for end-markets
• Regulatory norms
Valuation
Operating performance of the bank remains strong and doing better than industry average during current quarter and management expects core operating performance continues to be strong. As per management, retail assets, insurance and better business mix strategy would be key drivers of fee. Moreover, it is looking to diversify funding towards increasing institutional funding as well. Overall, it has increased focus toward garnering deposits. Thus, it is expected that the stock will see a price target of Rs.1385 in 8 to 10 months time frame on current P/Bvx of 3.85x and FY20 BVPS of Rs.359.70.
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 308.05 on 06th March 2020. It made a 52-week low of Rs 211.05 on 20th August 2019 and a 52-week high of Rs. 323.50 on 24th February, 2020. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 278.44
Short term, medium term and long term bias are looking positive for the stock as it is forming an “Inverted Head and Shoulder” pattern on weekly charts which is bullish in nature. Last week, stock ended with 7% gains and also has managed to close on verge of breakout of pattern, but its consolidation from past few weeks indicates that there may be a strong spurt in coming days. Therefore, one can buy in the range of 296-301 levels for the upside target of 340-345 levels with SL below 280.
The stock closed at Rs 1649 on 06th March, 2020. It made a 52-week low at Rs 1095 on 15th May 2019 and a 52-week high of Rs. 1661.20 on 06th March, 2020. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 1372.24
As we can see on charts that stock is trading in higher highs and higher lows sort of “Rising Wedge” on weekly chart, which is bullish in nature. Last week, stock has given the breakout of pattern and also has managed to close with 9% gains along with high volumes so buying momentum may continue for coming days. Therefore, one can buy in the range of 1615-1625 levels for the upside target of 1750-1780 levels with SL below 1550.
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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Indian markets once again fell like a pack of cards in the week gone by with Banknifty dropping more than 4.50% while Nifty ended the week with nearly 2% of losses, as sentiments got hit by concerns over corona virus, stoking fears of a prolonged world economic slowdown. Indian rupee also hit 74 per US dollar after the central bank seized control of Yes Bank and limited deposit withdrawals. From derivative front, call writers seen adding heavy open interest build up in 11000,11100 & 11200 call strike which clearly indicates limited upside in coming sessions. The Implied Volatility (IV) of calls closed at 21.32% while that for put options closed at 25.50%. The Nifty VIX for the week closed at 25.64% and is expected to remain volatile. PCR OI for the week closed at 0.85. From technical front, both the indices are holding well below its 200 days exponential moving average on daily charts and trading with negative bias on broader charts as well. We expect that huge volatility is likely to pursue in coming sessions as well and on any bounce towards 11200 to 11300 in Nifty will cap any sharp upside into the prices. However, on downside 10800-10700 zone would be immediate support for Nifty while 27500 to 27000 zone would act as support for bank nifty in coming sessions.
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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 (April) is expected to trade sideways to down in the range of 5850-6150 levels. The ample supply and sluggish demand for the spice may continue to keep the upside.The new crop is arriving only in Nizamabad, and by mid-March supply will start in all other producing centers. On the demand side, exporters' demand is weak due to a sharp increase in coronavirus cases outside of China, including in the US and Europe. Jeera futures (April) is expected to take support near 13250 levels & the upside momentum may get extended towards 14100 levels, if surpasses the resistance near 13780 levels. In the spot, jeera prices are moving higher at the major Unjha and Rajkot markets in Gujarat with rise in demand at lower levels and amid expectations of crop damage in the wake of inclement weather conditions in Rajasthan. Coriander futures (April) taking support near 6100 levels is likely to trade higher & test 6450-6550 levels. The major growing areas of Palanpur, Ganganagar and Bikaner have received heavy rains & witnessed hailstorms too. In such a situation there is a possibility of damage to the crop. Cardamom futures (April) is expected to plunge further towards 2400-2300 levels. The reason being is that export of these aromatic capsules to West Asian countries have fallen owing to Covid-19. On the supply side, it is expected that the summer showers would further rejuvenate the vegetative growth in plantations and in turn give more yields. At the auctions, the increase in arrivals is giving an indication that planters are trying to liquidate their stock at the early available opportunity.
In Bullion counter, yellow metal can continue its upside momentum on as mounting worries over the economic fallout from the fast-spreading coronavirus drove investors towards the safe-haven metal. The virus death toll in the United States rose to 12 with the latest fatality recorded in King County, Washington, and 53 new cases broke out across the country, striking for the first time in Colorado, Tennessee, Texas and San Francisco. Meanwhile U.S. 10-year Treasury yields fell to a record low, while the dollar held close to a two-month low. The virus could knock $211 billion off the combined economies of the Asia-Pacific, with Japan, Hong Kong, Singapore and Australia among the most exposed, S&P Global Ratings said. The European Central Bank has asked euro zone banks to review their business continuity plans and the actions they can take to prepare for and minimize the potential adverse effects of the virus. Gold may move towards 45800 while taking support near 43500 and silver can test 48900 while taking support near 47000. On 3rd March US policymakers unanimously approved their biggest one-time cut and first emergency rate move since the depths of the 2008 financial crisis. Interest rates are now set in a 1 percent to 1.25 percent range, and Jerome H. Powell, the Fed chair, signaled that further moves were possible. India's gold imports plunged 41% in February from a year earlier as a rally in local prices to a record high squeezed retail demand. The world’s second-biggest consumer of gold imported 46 tonnes in February, compared with 77.64 tonnes a year earlier.
Soybean futures (April) is expected to face resistance near 3800 levels, while the downside may remain capped near 3700-3650 levels. Overall, soya oilseed may trade with a downside bias as the prospects of exports are dim due to the spread of coronavirus which has hit overseas demand for soymeal from India. Mustard futures (April) may show an upside momentum towards 4100-4180, taking support near 4000. In the present scenario, the counter is attracting positive sentiments due to the untimely rains accompanied by strong winds and hailstorm have flattened the crop across Bhiwani, Rohtak, Sonepat, Dadri, Hisar and Mahendergarh districts.Crop damage is also being reported from other parts of the state of Haryana. In some parts of the state, wheat and mustard crops, which were set to be harvested in next three to four weeks, have been damaged due to hailstorm. On the other hand, the state government is making all necessary arrangements for smooth and hassle-free procurement of mustard seed for farmers. The bearish phase of edible oils are likely to resume again as the supplies in the international market may take a toll over the demand. The consumption has slowed down as millions of people are staying home instead of eating at canteens and restaurants due to the epidemic. Moreover, the market participants would be cautious ahead of the Malaysia Palm Oil Board & USDA’s supply and demand report scheduled to be released on March 10. Saying this, it is expected that soy oil futures (April) may face resistance near 790 and on the downside 760-750 can be seen again this week. While, CPO futures (March) can move lower towards 660-650 levels.
Crude oil prices may continue to remain under selling pressure as worries about demand for fuel being sapped by the global coronavirus outbreak. The Organization of the Petroleum Exporting Countries (OPEC) pushed for crude output by OPEC and associated producers - a group known as OPEC+ to be cut by an extra 1.5 million barrels per day (bpd) in total until the end of 2020. NonOPEC states were expected to contribute 500,000 bpd to the overall extra cut, OPEC ministers stated. But Russia and Kazakhstan, both members of OPEC+, said they had not yet agreed to the deeper cut, raising the risk of a collapse in cooperation that has propped up crude prices since 2016. Crude oil may further dip towards 3200 while taking resistance near 3550. Brent and WTI have each fallen about 27% their 2020 peak reached in January because of the declining demand from the coronavirus outbreak. China's factory activity also shrank at the fastest pace ever in February, underscoring the colossal damage from the coronavirus outbreak on the world's second-largest economy. Natural gas may extend its downside momentum as it may test 115 while taking resistance near 140. The weather is expected to warmer than normal over the next 6-10 and 8-14 days, according to the latest forecast from the National Oceanic Atmospheric Administration. This should put downward pressure on natural gas demand, ahead of the spring when demand generally declines. The net withdrawal from storage totaled 143 Bcf for the week ending February 21, compared with the five-year average net withdrawal of 122 Bcf and last year’s net withdrawal of 167 Bcf during the same week.
Cotton futures (March) may continue to consolidate in the range of 18000- 19000 levels. The gains may remain checked due to supply glut in the domestic market after exports to China came to a grinding halt. In the present scenario, Indian exporters areshowing any interest in pursuing with export orders, because in case any quality or quantity issue arises after shipment, travelling to China for clearing the cargo will be difficult. The outbreak of the coronavirus worldwide and the consequent lockout of production units are resulting in lower demand for the yarn. In the international market, ICE cotton may trade with a bearish bias in the range of 60-65 cents per pound. The Coronavirus is hurting the trade between the US and China. Moreover, the strong dollar is showing China alternative ways like Brazil. It is to be noted here that Brazil has the quality to compete with the US and the Real is much cheaper than the US Dollar right now.Chana futures (April) will witness consolidation in the range of 3850-4050 levels.Downtrend in continuing in the spot markets amidst weak physical demand and rise in the arrival of the new crop.Compared to last week chana is ruling ₹100 per kg lower. The Arrival pressure of new domestic Chana will be witnessed after holi in Maharashtra, Madhya Pradesh and Rajasthan. Guar seed (April) is likely to trade sideways in the range of 3700-3900levels, while guar gum (April) may consolidate in the range of 5950-6600levels. Weakness in oil prices in the international market due to ongoing worries about global oil demand caused by the coronavirus outbreak may keep the upside capped.
Base metal counter may remain on weaker path as the coronavirus outbreak spread rapidly outside China, stoking fears of a more severe impact on the global economy. Industrial metals are closely correlated with the health of the global economy due to their vast use in many industries. Copper may test 420 levels while facing resistance near 437 levels. Copper stocks in warehouses monitored by the Shanghai Futures Exchange at 310,760 tonnes are more than double the levels seen in the middle of January. The virus likely halved China's growth in the first quarter compared to the previous three months, more severe than thought just three weeks ago and triggering expectations for earlier interest rate cuts. Meanwhile, lead may remain in red as it can test 138 while taking resistance near 149 levels. Zinc may remain on weak bias as it can test 148 levels while facing resistance near 160 levels. Spot treatment charges for zinc concentrate in China have fallen for the first time in almost two years, data from industry pricing and information provider Asian Metal shows, indicating a slight tightening in supply. Nickel prices may slip lower towards 920 while taking resistance near 965. LME nickel stocks touched their highest since September 2018, having tripled to 235,428 tonnes since early December. Aluminium prices can dip towards 135 while taking resistance near 140. Aluminium stocks too have more than doubled since the middle of January to 439,087 tonnes. Global aluminium producers have increased their offers to Japanese buyers for the second quarter by as much as 27% from the current quarter.
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SILVER MCX (MAY) contract closed at Rs. 47372.00 on 05th Mar’2020. The contract made its high of Rs. 50123.00 on 24th Feb’2020 and a low of Rs. 43906.00 on 10th Dec’19. The 18-day Exponential Moving Average of the commodity is currently at Rs. 46925.17. On the daily chart, the commodity has Relative Strength Index (14-day) value of 51.359.
One can buy near Rs. 46800 for a target of Rs. 48500 with the stop loss of Rs. 45950.
COPPER MCX (MAR) contract closed at Rs. 431.00 on 05th Mar’2020. The contract made its high of Rs. 450.00 on 31st Dec’19 and a low of Rs. 415.30 on 28th Feb’2020. The 18- day Exponential Moving Average of the commodity is currently at Rs. 430.26. On the daily chart, the commodity has Relative Strength Index (14-day) value of 45.591.
One can buy above Rs. 432 for a target of Rs. 450 with the stop loss of Rs. 423.
RMSEED NCDEX (APR) contract was closed at Rs. 4071.00 on 05th Mar’2020. The contract made its high of Rs. 4635.00 on 31st Dec’19 and a low of Rs. 3931.00 on 03rd Mar’2020. The 18-day Exponential Moving Average of the commodity is currently at Rs. 4037.90. On the daily chart, the commodity has Relative Strength Index (14-day) value of 49.926.
One can buy near Rs. 4020 for a target of Rs. 4180 with the stop loss of Rs 3940.
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Ÿ Sebi has relaxed norms for matched book for commodity derivatives contracts.
Ÿ Soymeal exports from the country are seen halving on year to around 700,000 tn in 2019-20 (Oct-Sep). - Soybean Processors Association of India.
Ÿ The Solvent Extractors’ Association (SEA) forecasts the bumper rapeseed crop in the current year (2019-20) at 77.80 lakh tons.
Ÿ As on March 2, 2020, total 3,86,103 farmers have registered on 'Meri FasalMeraByora' portal for mustard seed crop Rabi 2020-21 covering an area of 17.20 lakh acres.
Ÿ The estimated production of Jeera for the year 2020, is estimated at 5,35,500tonnes as against the estimated 4,16,600 tonnes in 2019. - Federation of Indian Spice Stakeholders (FISS).
Ÿ According to the WGC, global gold ETFs and similar products added 61.7 tonnes to their holding in January 2020, taking the holdings of these investment vehicles to an all-time high of 2,947 tonnes.
Ÿ According to the IMF” The global spread of the virus has crushed hopes for stronger growth this year and will hold 2020 global output gains to their slowest pace since the 2008-2009 financial crises”
Ÿ T he Saudi-led coalition fighting in Yemen had foiled an attack on an oil tanker off Yemen's coast on the Arabian Sea.
Ÿ Global aluminium producers have increased their offers to Japanese buyers for the second quarter by as much as 27% from the current quarter.
Ÿ China is to ramp up gasoline exports in March and April as its refiners rid themselves of excess stock in the world's largest energy consumer after the coronavirus outbreak hit domestic fuel sales. NCDEX TOP GAINERS & LOSERS
Some revival was seen in the last week; however it is tough to say, if the recovery will continue in coming week as Coronavirus is continuously hunting sentiments of the market participants. CRB saw marginal gain; whereas many agri commodities noticed value buying after fall of many weeks. Gold silver ratio also widened this week as gold continued to outperform silver. Base metals prices augmented on U.S. central bank's rate cut as a positive move that will ease liquidity, but worries about demand in top consumer China dominated the market. The U.S. Federal Reserve cut interest rates on Tuesday in a bid to shield the world's largest economy from the impact of the coronavirus, in what was seen as an emergency move. Furthermore, the International Monetary Fund (IMF) announced a $50 billion aid package to ease the impact on global economies caused by the coronavirus outbreak. Separately, the U.S. House of Representatives overwhelmingly approved an $8.3 billion funding bill to combat the spread of the virus. It stimulated rallies in equities and other riskier asset like industrial metals. Though, it shed some previous gain of gold. Crude prices gained on all positive news, nevertheless nervousness ahead of OPEC+ meet dragged down prices marginally. OPEC sources have signaled that preliminary talks with Russia this week in Vienna have been trickier than before. Global oil demand is set to decline in 2020. This is notable because oil demand has consistently increased every year for several decades, with the exception of a few occasions like the early 1990s recession. A contraction in oil demand in 2020 will be the first decline since the financial crisis of 2008-2009. Natural gas futures edged due to a slight decline in output, despite weather forecasts confirming the previous warmer-than-normal forecast for the next two weeks. In agri oil seeds and edible oil counter jump was witnessed in prices on factors such as lower level buying accompanied with the news coming from international market that China will probably boosts its agricultural imports from U.S after issuing a list of products. CPO was up as buyers stocked up ahead of Muslim holy month of Ramadan and expectations of 2019/2020 production falling also boosted prices. Turmeric saw limited upside the arrival of new crops is increasing day by day, while the demand from bulk buyers and stockists is sluggish for the new crop. Cotton was up gained support due to the rise in the global market. At the same time, strong procurement by mills at lower levels has also started. Guar prices augmented taking positive cues from the higher oil prices in the international market.
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As per Reuters survey, OPEC oil output dropped in February to the lowest in over a decade as Libyan supply collapsed due to a blockade of ports and oilfields and Saudi Arabia and other Gulf members over delivered on a new production-limiting accord. On average, the 13-member Organization of the Petroleum Exporting Countries pumped 27.84 million barrels per day (bpd) last month, according to the survey, down 510,000 bpd from January’s figure. OPEC, Russia and other allies, known as OPEC+, agreed to deepen an existing supply cut by 500,000 bpd from Jan. 1, 2020. OPEC’s share of the new reduction is about 1.17 million bpd, to be made by 10 members, all except Iran, Libya and Venezuela.
Now Saudi Arabia and other OPEC members struggled to win support from Russia to join them in additional oil output cuts in a bid to prop up prices which have tumbled by a fifth this year because of the coronavirus outbreak. Saudi Arabia wants extra cuts of 1 million to 1.5 million barrels per day (bpd) for the second quarter while keeping existing cuts of 2.1 million bpd in place until the end of 2020. But Saudi Arabia did not want to carry most of the burden of cuts alone and was pressing Moscow to join in with a proper contribution while Russia is worried by the rise of shale oil in the United States, which is not part of OPEC.
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| 1th MAR | China's Manufacturing PMI tumbled to 35.7, worse than 2008, amid Coronavirus. |
| 2th MAR | Divergence in monetary policy between US and EU lifted EUR/USD to six weeks high. |
| 3rd MAR | The G7 finance ministers ‘stand ready to cooperate further on timely and effective measures’ to address coronavirus. |
| 4th MAR | Fed cut half point in emergency move amid spreading virus. |
| 5th MAR | US Treasury yields hit new lows on coronavirus fears. |
The implications of possible pandemic continue throughout last week as markets were unable to assess the reliability of the containment of the deadly virus in the coming weeks. Amid deterioration in financial markets weigh rupee to fall steeply to 52- week low. Admittedly the deceleration in rupee came after capital flight over Rs 24,000 cores recorded since the beginning of this year. On the top of that, RBI's intervention was negligible to warrant the fall in domestic unit. The only respite for RBI at present is the expectations of moderate headline monthly inflation ( releasing on 12th March) amid drop in food prices in February which will help rate setters to cut repo rate in the wake of global rate cut scenario. Further sentiment was deteriorated when US Treasury 10 Y yield fell the lowest in history after Fed cut 50 bps as an emergency step to boost the economy. Markets undermine such lukewarm policy at a time when life is at stake over any policy guidance. FX volatility lifted further after investor stampede from funds that invest in global equities accelerated in the latest week, with $23.2bn of withdrawals, the biggest outflow since August 2019, as the economic impact of the spreading coronavirus intensified.
USDINR March futures likely to hit 75.00 in the coming week if the spread of the virus escalates further.
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USD/INR (MAR) contract closed at 73.5375 on 05-Mar-2020. The contract made its high 73.8975 on 04-Mar-2020 and a low of 72.2550 on 02-Mar-2020 (Weekly Basis). The 21-day Exponential Moving Average of the USD/INR is currently at 72.20.
On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 82.48. One can buy at 73.60 for the target of 75.00 with the stop loss of 73.00
EUR/INR (MAR) contract closed 82.1100 on 05-Mar-2020. The contract made its high of 82.4875 on 04-Mar-2020 and a low 79.9550 on 02-Mar-2020 (Weekly Basis). The 21-day Exponential Moving Average of the EUR/INR is currently at 79.49.
On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 80.35. One can buy at 82.50 for a target of 84.00 with the stop loss of 81.90
GBP/INR (MAR) contract closed at 94.8275 on 05-Mar-2020. The contract made its high of 95.0000 on 05-Mar-2020 and a low of 92.4600 on 02-Mar-2020 (Weekly Basis). The 21-day Exponential Moving Average of the GBP/INR is currently at 93.29.
On the daily chart, GBP/INR has Relative Strength Index (14-day) value of 63.81. One can buy at 95.30 for a target of 97.00 with the stop loss of 94.80.
JPY/INR (MAR) contract closed at 68.6500 on 05-Mar-2020. The contract made its high of 68.8200 on 05-Mar-2020 and a low of 66.7550 on 02-Mar-2020 (Weekly Basis). The 21-day Exponential Moving Average of the JPY/INR is currently at 66.21.
On the daily chart, JPY/INR has Relative Strength Index (14-day) value of 76.56. One can buy at 69.50 for a target of 71.50 with the stop loss of 68.90.
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Antony Waste Handling Cell subscribed 16% on second day of bidding
The Rs 203-crore initial public offer of Antony Waste Handling Cell was subscribed 15.54 percent on the second day of bidding. The IPO has received bids for 7,55,000 equity shares against the total issue size of 48,20,508 equity shares, as per the data available on exchanges. The reserved portion of non-institutional investors was subscribed 12.98 percent and that of retail individual investors 25.93 percent, but the qualified institutional investors' portion is yet to be subscribed. The IPO comprises a fresh issue of Rs 35 crore and an offer for sale of 57 lakh shares, including anchor portion of 20,65,932 shares, by investors Cambridge (Mauritius), Guildford (Mauritius), Leeds (Mauritius) and Tonbridge (Mauritius). Antony Waste Handling Cell on March 3 already raised Rs 60.94 crore from three anchor investors at a lower end of price band of Rs 295-300 per share. The company intends to utilise the net fresh issue proceeds for reduction of the consolidated borrowings by infusing debt in subsidiary - AG Enviro Infra Projects. Equity shares of the company are proposed to be listed on the BSE and NSE. Equirus Capital is the sole book running lead manager to the offer.
SBI Card IPO final day: Issue oversubscribed 26.5 times, HNIs portion subscription at 45x
The Rs 10,355-crore public offer of the country's second largest credit card issuer SBI Cards and Payment Services has been oversubscribed 26.54 times so far on the final day of bidding, March 5. The offer has received bids for more than 266.16 crore equity shares against the IPO size of over 10 crore shares (excluding anchor book over 3.66 crore shares), the exchanges data showed. The portion set aside for non-institutional investors (highnetworth individuals) is subscribed 45.22 times, and that of retail is subscribed 2.50 times. The reserved portion of employees saw a 4.73 times subscription, while that of State Bank of India's shareholders portion is oversubscribed 25.35 times. SBI Card will offer shares to its employees at a discount of Rs 75 over final IPO price that is expected to be decided in the next couple of days. The qualified institutional buyers' portion, which closed on March 4, was subscribed 57.18 times. Meanwhile, the company garnered Rs 2,768.55 crore through anchor book, which closed on February 28.
Equitas Small Finance Bank gets SEBI nod to float IPO
Equitas Small Finance Bank, the subsidiary of Equitas Holdings, on March 3 received Securities and Exchange Board of India's (SEBI) approval to launch initial public offering. The issue consists of a fresh issue of Rs 550 crore and an offer for sale of 8 crore equity shares. Equitas SFB had filed the draft red herring prospectus with the SEBI on December 16 last year. The offer includes a reservation of up to Rs 100 crore for subscription by eligible shareholders of Equitas Holdings and a reservation aggregating up to Rs 5 crore for subscription by eligible employees. Equitas SFB has proposed to utilise the net fresh issue proceeds from the offer towards augmenting its Tier I capital base to meet the future capital requirements. Equitas Small Finance Bank is the largest SFB in India in terms of the number of banking outlets, and the second-largest in India in terms of assets under management and total deposits in fiscal 2019. JM Financial, Edelweiss Financial Services and IIFL Securities are the book running lead managers to the issue.
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* Interest Rate may be revised by company from time to time. Please confirm Interest rates before submitting the application.
* For Application of Rs.50 Lac & above, Contact to Head Office.
* Email us at fd@smcindiaonline.com
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Sundaram MF waives off exit load for switching from dividend to growth options; other MFs plan to join bandwagon
With the April 1 deadline - from when investors will have to bear tax on dividends - inching closer, mutual fund houses are helping by reducing the cost burden. Sundaram Mutual Fund has become the first fund house to waive off exit load for switching out from dividend option to growth option in an equity scheme. Most fund houses are contemplating a similar move to waive off exit load or may give other incentives to retain investors. “In order to reduce the cost burden on investors if they so choose, Sundaram Mutual has announced the waiver of exit load from redemption in many of our schemes up to 25 percent of the investment value per annum if done through STP (systematic transfer plan) mode,” said Sunil Subramaniam, Managing Director and Chief Executive Officer - Sundaram Mutual Fund. Sundaram Mutual Fund has announced changes in exit loads of all open-ended equity schemes, including Sundaram Global Brand Fund, Sundaram Equity Hybrid Fund, Sundaram Arbitrage Fund, and Sundaram Medium Term Bond Fund. Sundaram Mutual Fund said, that if more than 25 percent of the units are redeemed or withdrawn by way of Systematic Withdrawal Plan (SWP) within 365 days from the date of allotment, an exit load of 1 percent of the applicable net asset value (NAV) will be charged. The company will also waive exit load on intra-scheme and inter-scheme switch-outs for all purchase transactions from March 2. Currently, an exit load of 1 percent is imposed on such transactions.
Inflows into gold ETF hit all-time high of Rs 1,483 crore in Feb
Gold exchange-traded funds witnessed an all-time high net inflow of Rs 1,483 crore in February, as slowdown in global economy amid the coronavirus outbreak led investors to opt for the instrument as a safe haven. This also marks the fourth consecutive monthly net inflow in gold ETFs. The latest inflow comes amid a sell-off in broader market and sharp plunge in international crude oil prices. According to the latest data available with the Association of Mutual Funds in India (Amfi), a net sum of Rs 1,483 crore was pumped in into gold-linked ETFs in February as compared with the 7-year high of Rs 202 crore in the preceding month. Prior to that, the safe-haven asset saw an infusion of Rs 27 crore in December and Rs 7.68 crore in November. However, it had
Indiabulls Mutual Fund announced the launch of Indiabulls Multi Cap Fund
Indiabulls Mutual Fund announced the launch of Indiabulls Multi Cap Fund, an open-ended equity scheme investing across large cap, mid cap and small cap stocks. The New Fund Offer (NFO) opened for subscription on Mar 4, 2020 and will close on Mar 18, 2020.
Sundaram Mutual Fund announced the appointment of Independent Motilal Oswal Mutual Fund announced change in exit load of Motilal Oswal Dynamic Fund
Motilal Oswal Mutual Fund announced change in exit load of Motilal Oswal Dynamic Fund. As per the revised provision, 1% exit load would be applicable if units are redeemed on or before 1 year from the date of allotment with effect from Mar 6, 2020. No exit load would be applicable otherwise.
ICICI Prudential Mutual Fund changes fund manager of ICICI Prudential Corporate Bond Fund
ICICI Prudential Mutual Fund announced the change in fund manager of ICICI Prudential Corporate Bond Fund. Anuj Tangra, Chandni Gupta and Rahul Goswami are the new fund managers with immediate effect.
PGIM Mutual Fund announced change in benchmark of PGIM India Gilt Fund
PGIM Mutual Fund announced change in benchmark of PGIM India Gilt Fund from I-Sec Mi-Bex to CRISIL Dynamic Gilt Index with effect from Mar 1, 2020.
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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) during the Assocham's "12th Capital Market Summit" held on 04th March 2020 at Hotel Four Seasons, Mumbai.
Mr. Nitin Murarka (Head Derivatives, SMC Global) addressing the audience during an Investor Awareness Program organized by SMC in association with NSDL on 19th February 2020 at Hotel Yellow Chilli, Meerut.
SMC distributing Face masks for protection against the Corona Virus at Head Office, Delhi.
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