In the week gone by, global stock markets around the world remained volatile as investors weighed the prospect of further interest rate increases from central banks along with a possible recession. Fed’s Powell had already warned of more pain to the economy as a result of hikes in rates to tame inflation. In his much-awaited speech at Jackson Hole symposium last week, Powell said the US central bank would continue to take strong action through higher interest rates. Powell’s speech was inferred as hawkish and thus investors took a flight from riskier assets. European stock markets also remained volatile as investors fret about the combination of tightening monetary policy and slowing global growth. However, there was some good news as German retail sales rose 1.9% on the month in July, an annual fall of 2.6%, as consumers in the Eurozone’s biggest economy showed a degree of resilience with discretionary spending in the face of soaring inflation. Chinese manufacturing activity shrank in August, data from a private survey showed on Thursday, as COVID lockdowns and a drought-driven energy crunch weighed on industrial activity in the world’s second-largest economy and major regional growth driver. The Caixin manufacturing purchasing managers index came in at 49.5 for August, a drop from July’s reading of 50.4, and below the 50 mark which indicates contraction. On the central banks front, the European Central Bank, along with the Federal Reserve and the Bank of England, is set to press ahead with interest rate hikes to combat inflation at historic levels.
Back at home, domestic markets remained volatility as global growth concerns weighed on investor sentiment. Besides, a weaker-than-expected domestic Q1FY23 GDP (gross domestic product) data, along with marginal downtick in Manufacturing PMI for August, worried investors. While the US, Europe and most large emerging markets have turned weak, the Indian market has shown surprising resilience. India collected Rs 1.44 lakh crore in Goods and Services Tax (GST) in August, registering an increase of 28 percent from the mop-up a year back. Going forward, investors are likely to be cautiouxxxs amid expectations of future rate hikes.
On the commodity market front, CRB saw a fall after three week rise on surge in DXY amid some weak data. The greenback hit twenty years high supported by aggressive rate hikes by the Fed in an effort to reel in decades-high inflation, and positive Job and consumer confidence data gave the central bank no reason to hold back. It will continue to give pressure on commodities prices. Growing fears over weakening fuel demand due to aggressive rate hikes by the U.S. and European central banks outweighed concerns over tight global supply. Crude oil can trade in the range of 6800- 7400. Recent signs of weakness in China's economy and the country's stronger pandemic restrictions are weighing on base metals. This counter is expected to remain under bearish pressure. GDP Growth Rate of Switzerland, Australia, Japan and Euro Area, RBA Interest Rate Decision, ISM Non-Manufacturing PMI of US, Interest Rate Decision and Balance of Trade, Unemployment Rate and Employment Change of Canada, Inflation Rate of Mexico and China, ECB Interest Rate Decision and ECB Press Conference, etc are some important data scheduled this week.
SMC Global Securities Ltd. (hereinafter referred to as “SMC”) is a registered Member of National Stock Exchange of India Limited, Bombay Stock Exchange Limited and its associate is member of MCX stock Exchange Limited. It is also registered as a Depository Participant with CDSL and NSDL. Its associates merchant banker and Portfolio Manager are registered with SEBI and NBFC registered with RBI. It also has registration with AMFI as a Mutual Fund Distributor.
SMC is a SEBIregistered Research Analyst having registration number INH100001856. 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.
DISCLAIMER: This report is for informational purpose only and contains information, opinion, material obtained from reliable sources and every effort has been made to avoid errors and omissions and is not to be construed as an advice or an offer to act on views expressed therein or an offer to buy and/or sell any securities or related financial instruments, SMC, its employees and its group companies shall not be responsible and/or liable to anyone for any direct or consequential use of the contents thereof. Reproduction of the contents of this report in any form or by any means without prior written permission of the SMC is prohibited. Please note that we and our affiliates, officers, directors and employees, including person involved in the preparation or issuance of this material may; (a) from time to time, have long or short positions in, and buy or sell the securities thereof, of company (ies) mentioned herein or (b) may trade in this securities in ways different from those discussed in this report or (c) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instrument of the company (ies) discussed herein or may perform or seek to perform investment banking services for such Company (ies) or act as advisor or lender / borrower to such company (ies) or have other potential conflict of interest with respect of any recommendation and related information and opinions, All disputes shall be subject to the exclusive jurisdiction or Delhi High Court.
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 doing well and according to the management, its brands continued to grow significantly ahead of the market, gaining market shares across all key categories. Despite the macroeconomic headwinds, the company remained focused on rolling its consumercentric innovation that expanded its total addressable market and report strong, sustainable, profitable growth. Rural demand was driven by the ahead-of-thecurve investments in expanding its rural footprint to over 91,500 villages in Q1FY23, up from 89,800 villages in March 2022. Urban growth, on the other hand, was driven by new-age channels like modern trade, which grew by 42% during the quarter. Thus, it is expected that the stock will see a price target of Rs.650 in 8 to 10 months’ time frame on a one year average P/BV of 12.30x and FY23 BVPS of Rs.52.86.
The company is doing well and according to the management, new Business wins and opportunities in pipeline, improved operational performance, and increase in the market share with OE would give good growth to the earnings of the company. The company would be a standout beneficiary of rising demand for the M&HCV segment given the products such as Rear wheel Axles, Brakes and Suspensions manufactured for the spectrum of load-carrying capacity across M&HCVs for all clients. Thus, it is expected that the stock will see a price target of Rs. 2286 in 8 to 10 months’ time frame on target P/BV of 4.85x and FY23 BVPS of Rs.471.4.
The stock closed at Rs 2473.45 on 02nd September, 2022. It made a 52-week low at Rs 2030.35 on 01st September, 2021 and a 52-week high of Rs. 2820.00 on 22nd April, 2022. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 2307.72
Short term, medium term and long term bias are looking positive for the stock as it is trading in higher highs and higher lows on chart. Apart from this, it has formed an “Inverse Head and Shoulder” pattern on daily charts and has given the pattern breakout along with high volumes and it also has managed to close above the same. So further buying in stock may continue in coming days. Therefore, one can buy in the range of 2450-2460 levels for the upside target of 2700-2750 levels with SL below 2300 levels.
The stock closed at Rs 932.50 on 02nd September, 2022. It made a 52-week low at Rs 655.70 on 20th June, 2022 and a 52-week high of Rs. 1165.00 on 01st September, 2021. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 870.06
After registering yearly low of 655 levels, the stock has recovered sharply and trading in rising channel on weekly chart, forming a “Bull Flag” pattern which is bullish in nature. Moreover, stock has given the pattern breakout in last week and also has closed above the same with gained around 3%. On the technical indicators front such as RSI and MACD are also suggesting buying for the stock. Therefore, one can buy in the range of 910-920 for the upside target of 1000-1040 levels with SL below 860 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 remained highly volatile in the week gone by as Nifty is seen trading in broader range of 17200-17700 levels while Banking index remained outperformer and ended the week with gains of more than 1%. Over the week, option writers were also seen adding hefty open interest at 17600 & 17700 call strikes while marginal put wring was observed at 17500 strike. Implied volatility (IV) of calls closed at 17.46% while that for put option, it closed at 18.98%. The Nifty VIX for the week closed at 19.87%. PCR OI for the week closed at 1.45. From the technical front, secondary oscillators suggest that volatility is likely to grip Indian markets in upcoming week and traders should focus on stock specific action. On the higher side, 17800 would likely to act as strong resistance for Nifty while 17200 to 17000 zone will support any sharp downside in prices. On the other hand, Banking index is likely to face hurdle in the zone of 39800-40000 levels and may continue to outperform 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
Turmeric (Sep) prices traded sideways to down due to hand to mouth buying by local traders. Estimation of rise in production for upcoming season in the wake of surging acreages under turmeric weighed on market sentiments. Going forward, prices are expected to move up on supply shortage concerns. Stockists are reluctant to sell their produce at prevailing levels as arrivals in Aug’22 dropped by 38% Y-o-Y in Aug’22 reported at 13.20 thousand tonnes compared to 21.4 thousand tonnes of previous year. Major focus will be on crop progress as sowing activities have almost completed across India. Extended drier weather condition in Maharashtra, Telangana and major turmeric growing districts in Andhra Pradesh has raised the concerns among farmers that may cap the downfall in prices. About 14,000 Ha was sown under Turmeric in Andhra Pradesh as on 1st Sep’22 compared to 13,000 Ha of last year for corresponding period. Turmeric prices are likely to consolidate in range of 7500 – 7000 in near term.
Jeera (Sep) prices traded in limited range of 24675-25640 levels tracking mixed sentiments of the market. Concerns over supply shortages remained intact that prompted stockists to stay away from heavy selling. About 15 thousand tonnes of jeera was reported in Aug’22 at major mandies across India compared to 19 thousand tonnes previous year. Total arrivals have dropped by 31% Y-o-Y during Jan’22-Aug’22 due to lower output. Prices are likely to track cues from the upcoming export demand which is expected to pick up in wake of tighter global supply. Lower production in Syria and Turkey will lead to rise in jeera imports from India. Limited availability of stocks will force spice millers and other traders to buy on dip to fulfil their trade commitments. Jeera production is estimated to drop by 9% Y-o-Y to 7.25 lakh tons in year 2021-22 that kept stocks lower across India. Jeera prices are likely to honor resistance of 25900 wherein support can be seen near 24800.
Dhaniya (Sep) futures witnessed sharp recovery in prices due to tightness in domestic supply. Delayed imports of dhaniya and shrinking arrivals at domestic market are likely to keep prices elevated in near term as well. Gains in coriander are likely to remain intact due to lower annual production. However, demand from local traders and millers are still bleak that will restrict the major gains in prices. Coriander prices jumped to record level of 13298 in year 2022 due to lower production and now consolidating in 10700 – 12500 zone.
Bullion prices posted a third straight weekly fall, as data pointing at a resilient U.S. economy bolstered the likelihood of the FED keeping interest rates higher for longer and pinned the dollar near recent peaks. The dollar index posted a third straight weekly rise. The number of Americans filing new claims for unemployment benefits fell to a two-month low, while layoffs dropped in August. U.S. manufacturing grew steadily last month but factory activity in China, the eurozone, and Britain fell as Russia's war in Ukraine and China's zero COVID-19 curbs continued to hurt businesses, surveys showed on Thursday, although there were indications cost pressures were starting to ease. Major central banks are expected to continue with aggressive monetary policy tightening to rein in sky-high inflation but are also fanning fears of an economic slowdown. The market is still really playing on the higher for a longer interest rate narrative. Silver also witnessed a third consecutive weekly fall which takes prices to more than a two-year low. ETF outflows also show weaker investor interest. The holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell to 973.37 tonnes. The fall in silver is more impulsive than gold as it takes cues from both Gold and weaker base metals. Global stock markets were mostly lower, reflecting lingering concerns about higher interest rates and the impact on the global economy. On the technical front, ahead in the week, Gold prices may continue to witness selling from higher levels where it may take support near 48900 and could possibly face resistance near 51200. Silver may also witness selling from higher levels where it may take support near 50200 and face resistance near 54400.
Oil prices tumbled more than 10% from the high of 7770, as new COVID-19 lockdown measures in China added to worries that high inflation and interest rate hikes are denting fuel demand. Asia's factory activity slumped in August as China's zero-COVID curbs and cost pressures continued to hurt businesses, surveys showed on Thursday, darkening the outlook for the region's fragile recovery. Southern Chinese tech hub Shenzhen tightened COVID-19 curbs as cases kept increasing. Large events and indoor entertainment were suspended for three days in the city's most populous district. The dollar index hit a 20-year high after U.S. data showed a resiliently strong economy, giving the Federal Reserve more room to raise interest rates. A possible revival of a 2015 Iran nuclear deal which would allow the OPEC member to boost its oil exports also weighed on prices. Oil market volatility grew this year on concerns about inadequate supply in the months after Russia sent military forces into Ukraine and as OPEC struggles to increase output. India's crude oil import from Russia saw a decline of nearly 25 per cent in the past two months. India's crude oil imports from Iraq and the United Arab Emirates (UAE) fell 18 per cent and 20 per cent respectively in August from July while supplies from Saudi Arabia and the US shrank 3 per cent and 7 per cent respectively. Ahead in the week prices may continue to trade lower where it may find support near 6700 and face resistance near 7280. Natural gas futures posted selling, tracking a retreat in European rates, with prices hitting an over one-week low as supplies in the United States were seen rising. Ahead in the week prices may continue to trade in a tight range of 695-748.
Base metals may trade with a negative bias fuelled by bearish sentiment amid fresh COVID-19 curbs in China and possibility of more room for aggressive interest rate hikes by the Federal Reserve after positive U.S. data. Many parts of China's southern city of Guangzhou and the tech hub of Shenzhen also imposed COVID-19 curbs in battling flare-ups. This has renewed worries about weak demand after downbeat factory and property data in top metals consumer China. A private sector survey showed China's factory activity contracted for the first time in three months in August while nearly 70 Chinese cities reported declines in new home prices, the most since the start of the COVID-19 pandemic. The US Federal Reserve signalled that the fight against inflation would take priority over growth concerns, while the European Central Bank is expected to tighten policy more aggressively to combat record-high inflation despite an energy crisis. Copper may trade in the range 590-670. China's southwestern Sichuan province resumed its power supply to industrial and residential usage, and factories there have restarted their production after being ordered to shut down since Aug.15. Codelco lowered its copper production outlook for 2022 to about 1.5 million tonnes, blaming lower recovery levels at some of its mines and ore grades at the Chuquicamata site. Aluminum may trade in the range of 195-215 with a bearish bias. Zinc can trade in the range of 278-305. Lead can move in the range of 170-180. Steel long is likely to trade in the range of 48700- 49900 with bearish bias on NCDEX amid concerns about the global economy with the NYSE Arca Steel Index slumped to a one-month low.
MCX Cotton (Oct) prices traded down following weakness in ICE cotton prices. Improved crop condition and sluggish buying at domestic market is likely to put pressure on prices in coming weeks as well. Arrivals of unginned or raw cotton (kapas) of the 2022-23 season, has started much earlier in some districts of Haryana than the scheduled October 1 will pick up further in coming weeks. Ginning activities will accelerate once the cotton arrivals increases that will fill the supply gap and will put pressure on prices. Prices are likely to trade downside towards 37000 levels with resistance of 41000. Similarly, NCDEX cotton seed oil cake (Sep) futures traded sideways tracking mixed sentiments of the market. Fear of yield losses in cotton due to pest attack in Punjab and Haryana is likely to support prices as these two states are the major consuming center of cotton seed oil cake. Prices are expected to trade in 2850- 2650 range. Guar seed futures have jumped by almost 5% during the week mainly due to short covering supported by fear of crop delay in Rajasthan. Overgrowth of Guar crop due to excessive rainfall will take extra 20-25 days’ time to ripe the crop that will lead to delay in harvest. Moreover extended dryness in Rajasthan also hampered the crop growth that will support upward move in prices. However, gains will be limited due to better production outlook. Total area under Guar has been higher by 50% Y-o-Y in Rajasthan reported at 30.7 lakh Ha as on 24th Aug’22. Guar seed prices may face resistance near 5050 wherein 4700 will be the support. Mentha oil (Sep) witnessed recovery on emerging buying interest at lower level. Mentha oil prices has dropped from 1142 reported in May’22 to 977 in first week of Sep’22, down by 14% mainly due to subdued buying against adequate supply. Prices have found support near 950 level and expected to move up gradually towards 1000 level with fall in supply. Castor seed (Sep) prices extended their losses on promising crop for upcoming year as acreages under castor increased 22% Y-o-Y so far in year 2022.Sluggish export of castor oil will also put pressure on prices. Being as largest importer China has imported only 1.66 lakh tonnes of castor oil during Jan’22- Jun’22 compared to 2.04 lakh tonnes of previous year down by 19%. Going forward, castor seed prices are likely to find support near 7000 level in near term and may fall further once the new crop starts by end of Sep’22.
It closed at Rs. 633.85 on 01st Sep 2022. The 18-day Exponential Moving Average of the commodity is currently at Rs 660.07. On the daily chart, the commodity has Relative Strength Index (14-day) value of 33.566. Based on both indicators, it is giving a sell signal.
One can sell near Rs. 645 for a target of Rs. 600 with the stop loss of 670.
It closed at Rs. 740.70 on 01st Sep 2022. The 18-day Exponential Moving Average of the commodity is currently at Rs 716.79. On the daily chart, the commodity has Relative Strength Index (14-day) value of 59.763. Based on both indicators, it is giving a buy signal.
One can buy near Rs. 716 for a target of Rs. 750 with the stop loss of 699.
It closed at Rs. 49220.00 on 01st Sep 2022. The 18-day Exponential Moving Average of the commodity is currently at Rs 51240.31. On the daily chart, the commodity has Relative Strength Index (14-day) value of 32.002. Based on both indicators, it is giving a sell signal.
One can sell near Rs. 49500 for a target of Rs. 48500 with the stop loss of 50000.
NOTE: *M.High / M.Low stands for Monthly High / Monthly Low
CRB saw a fall after three week rise on surge in DXY amid some weak data. The greenback hit twenty years high supported by aggressive rate hikes by the Fed in an effort to reel in decadeshigh inflation, and positive Job and consumer confidence data gave the central bank no reason to hold back. Energy counter slipped. U.S. gasoline futures fell as low as $2.5899 per gallon on Wednesday, the lowest since Feb. 18, just before Moscow invaded Ukraine. US retail gasoline prices hit an all-time record in the United States at more than $5 a gallon in mid-June. OPEC's output hit 29.6 million barrels per day (bpd) in the most recent month, according to a Reuter’s survey, while U.S. output rose to 11.82 million bpd in June. Natural gas couldn’t stay on higher side on some ease in supply and fall in crude oil. China is reselling natural gas to Europe as an economic slowdown leaves it with a surplus. China's economy has slowed sharply in 2022 as Beijing implemented a strict zero-COVID policy and as a crisis grips the country's highly indebted property sector. Bullion saw no respite and silver saw more fall last week as the U.S. dollar gained on positive US economic data. On MCX, gold and silver closed near 50200 and 52400. Investors are penciling in an over 70% chance that the Fed will hike interest rates by 75 basis points later in September. Story was same for the base metals; they also traded with bearish bias. The red metal fell sharply after data showed Chinese manufacturing activity shrank for a second straight month in August. Weak economic readings from Germany and Japan, coupled with surging inflation in the euro zone also trumped up concerns over slowing economic activity, denting the demand for copper. China's factory activity contracted for the first time in three months in August amid weakening demand, while power shortages and fresh COVID-19 flare-ups disrupted production. Zinc breached the mark of 300 and aluminum also saw fall from the higher side on fall in crude as well. Both are at their highest levels since April 2020.
Castor seed prices extended losses on promising crop for upcoming year. Sluggish export of castor oil also weighed on market sentiments. Slowdown in Chinese economy and higher fuel prices has trimmed the Chinese buying of castor oil from India. Arrivals of unginned or raw cotton (kapas) of the 2022-23 season, has started much earlier in some districts of Haryana than the scheduled October 1, will pick up further in coming weeks and this gave some selling pressure in cotton prices. Tighter supply at major trading centers and emerging fear of crop damage in guar due to extended dryness in Rajasthan supported upward move in prices.
MCX Bullion Futures Index is India's first tradeable Index which tracks the realtime performance of flagship near month MCX Gold (1 Kg) & Silver (30 Kg) futures contracts. Bullion Index is one of the sectoral indices in the MCX iCOMDEX family, and the index is based on the liquid gold and silver futures contracts traded on MCX. The Index is an efficient tool for investors looking to manage their investments in bullion and, being an excess returns index; it is ideal for benchmarking and trading.
MCX iCOMDEX indices represent a series of real-time commodity futures price indices, conceptualized for market participants to capture the pulse of commodity markets.
Long-term investors are using the MCX iCOMDEX Bullion Index to gain from exposure to the bullion sector as a whole. The Index is also used as a powerful portfolio diversifier on account of its low volatility and low correlation with other financial assets over a long period. Further, the diversification potentially reduces volatility in comparison to single commodity exposures.
MCX iCOMDEX Bullion Index surged by about 7% by the end of FY2021-22. The Index was world’s most traded commodity index futures contract in the year 2021, as per data released by the Futures Industry Association.
Weekly price movement of MCX Bulldex
Bulldex prices continue to trade lower as both the counters traded with a bearish tone amid a firmer U.S. dollar and prospects of major global central banks increasing interest rates aggressively to bring down inflation. Recently, the U.S. Federal Reserve’s Loretta Mester said the central bank would need to raise interest rates somewhat above 4% by early next year. Silver, on the other hand, gave the biggest monthly drop since September 2020. Ahead in Sep, Bulldex prices may continue to trade on the lower side where it may take support near 13100 and could possibly face resistance near 14100.
Indian Rupee is poised to end the week on a weaker start as the dollar extended its gain against a basket of currencies, which is likely to run-down the sentiment lower in rupee despite we have some cheerful fact that oil prices slide substantially in recent days. Apparently, USDINR may find weekly support around 79.20-79.30 on the spot while resistance still remains intact around 80.25 as RBI remains defensive whenever the rupee breaches below 80.00. Inevitably rupee may edge lower tracking its Asian peers notably yuan, which is trading near $6.90. Further possible weakness in Yuan towards $7.00 in coming days will add more vulnerability to rupee to trade with negative bias. Meanwhile, major basket seems to be destroyed against dollar. The yen fell below $140.00, which is the lowest in last 24 years, pound hit the lowest level in 35 years trading below 1.1570 and what not euro is set to fall its recent low of $0.99. The monetary policy divergence between US and Japan, the UK & EZ prompted dollar to rise sharply. Next week later based on the outcome of key US job payroll release for the month of August as well US monthly CPI data will guide the broad dollar move. Indeed US August payroll report sees as one of the key measures for the Fed and it will have a lot for the market to ponder over in the lead-up to the September FOMC. The headline NFP may dip below 300k as what the consensus is. On the top of that average earnings are also expected to show a peaking in this series with earnings dropping back to 0.4% MoM. It’s over to NFP now to carry the dollar trend for next week.
USD/INR (SEP)contract closed at 79.7750 on 01-SEP-22. The contract made its high of 80.3450 on 29-AUG-22 and a low of 79.4675 on 01-SEP-22 (Weekly Basis). The 21-day Exponential Moving Average of the USD/INR is currently at 79.7675.
On the daily chart, the USD/INR has Relative Strength Index (14-day) value of 51.79.One can buy at 79.50 for the target of 80.50 with the stop loss of 79.00.
GBP/INR (SEP)contract closed at 92.3825 on 01-SEP-22. The contract made its high of 94.0900 on 29-AUG-22 and a low of 92.2025 on 01-SEP-22 (Weekly Basis). The 21-day Exponential Moving Average of the GBP/INR is currently at 94.9533.
On the daily chart, GBP/INR has Relative Strength Index (14-day) value of 28.52. One can sell at 93.00 for a target of 92.00 with the stop loss of 93.50.
| 29th AUG | ECB chief economist sees benefits of raising rates in ‘smaller increments’ |
| 30th AUG | German inflation hits 40-year high as calls mount for bigger ECB rate rises |
| 30th AUG | JOLTs job openings for July 11.239M vs 10.45M estimate |
| 31th AUG | Euro zone inflation hits another record of 9.1% as food and energy prices soar |
| 31th AUG | India's GDP grows at 13.5% in April-June quarter |
| 31th AUG | German companies halt production to cope with rising energy prices |
| 01st SEPT | Euro zone unemployment remains stable at 6.6%, lower than in pandemic |
| 01st SEPT | US ISM Manufacturing PMI at 52.8 in August, same as July |
| 01st SEPT | UK businesses expect consumers to pay more as costs rise, finds survey |
EUR/INR (SEP) contract closed at 80.0750 on 01-SEP-22. The contract made its high of 80.3050 on 30-AUG-22 and a low of 79.7350 on 29-AUG-22 (Weekly Basis). The 21-day Exponential Moving Average of the EUR/INR is currently at 80.6133.
On the daily chart, EUR/INR has Relative Strength Index (14-day) value of 42.54. One can buy at 79.70 for a target of 80.70 with the stop loss of 79.20.
JPY/INR (SEP) contract closed at 57.4400 on 01-SEP-22. The contract made its high of 58.2850 on 29- AUG-22 and a low of 57.1825 on 01-SEP-22 (Weekly Basis). The 21-day Exponential Moving Average of the JPY/INR is currently at 58.5926.
On the daily chart, JPY/INR has Relative Strength Index (14-day) value of 35.73. One can sell at 58.00 for a target of 57.00 with the stop loss of 58.50.
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The net proceeds from the issue will be utilized for the following purposes;
Considering the P/E valuation, on the upper end of the price band of Rs.525, the stock is priced at pre issue P/E of 8.30x on Annualised FY22 EPS of Rs.63.29. Post issue, the stock is priced at a P/E of 9.22x on its EPS of Rs.56.96. Looking at the P/B ratio at Rs.525, pre issue, book value of Rs. 374.41 of P/Bvx 1.40x. Post issue, book value of Rs.389.47 of P/Bvx 1.35x.
Considering the P/E valuation, on the lower end of the price band of Rs.500, the stock is priced at pre issue P/E of 7.90x on Annualised FY22 EPS of Rs.63.29. Post issue, the stock is priced at a P/E of 8.78x on its EPS of Rs.56.96. Looking at the P/B ratio at Rs.500, pre issue, book value of Rs. 374.41 of P/Bvx 1.34x. Post issue, book value of Rs.389.47 of P/Bvx 1.28x.
Incorporated in 1921, Tamilnad Mercantile Bank Limited (TMB) is one of the oldest and leading private sectors in India. It offers an array of banking and financial services to retail customers, micro, small, and medium enterprises (MSMEs), and more. The bank has a strong portfolio of advances and deposits from a diversified customer base including retail customers, agricultural customers, and MSMEs. As of March 31, 2022, it has a strong branch network of 509 branches and a total customer base of 5.08 million.
Strong legacy, loyal customer base and focus on improving servicing framework: With almost 100 years of history, the bank has established itself as a well-recognized scheduled commercial bank having a strong network of branches, ATMs and CRMs across several states of South India including Tamil Nadu being its home state, along with Maharashtra, Gujarat, Karnataka, and Andhra Pradesh, which has enabled it to maintain a strong customer base. With a focus on increasing its existing customer base, the banks has also introduced various alternate banking channels such as ATMs, CRMs, internet banking, mobile banking, E-Lobbies, point of sales (“PoS”), banking and debit and credit cards.
Strong presence in Tamil Nadu and consistent focus to expand presence in strategic regions: in 15 other states and 4 union territories of India. As of March 31, 2020, 2021 and 2022 its deposits and advances in the state of Tamil Nadu contributed to 75.93%, 76.33% and 75.06%, respectively, of its Total Business. As of March 31, 2022, the bank had 4.32 million customers, 85.03% of its overall customer base, contributing to its deposits and advances portfolios in the State of Tamil Nadu. Its current account and savings account deposits to total deposits are also competitive among peers at 30.50%. Apart from home state, the bank focuses on diversifying its reach in its already existing network including in the states of Gujarat, Maharashtra, Karnataka and Andhra Pradesh.
Advances with focus on MSME, agricultural and retail segments: Its advances portfolio consists of a wide basket of retail finance and small ticket size MSME finance products. Its focus is on understanding the needs and expectation of its customers, particularly in the RAM space and adopting strategies to target these customer segments for its growth. It has dedicated marketing managers and agri-officers across its regional offices who specifically focus on growing the network of its existing MSME and agricultural customers.
Consistently growing deposit base with focus on low-cost retail CASA: During the last three Fiscals, its overall deposits base has increased from Rs. 36825 Crore in Fiscal 2020 to Rs. 40970 Crore in Fiscal 2021 to Rs. 44933 Crore in Fiscal 2022, owing to an increase in both term deposits and CASA deposits. Its CASA deposits as a share of total deposits has increased from rs. 9518 Crore or 25.85 % in Fiscal 2020 to Rs 11685 crore in Fiscal 2021 or 28.52% to Rs.13705 Crore in Fiscal 2022 or 30.50% with a CAGR of 20.00 % from Fiscal 2020 to Fiscal 2022. Its CASA portfolio is diversified and has low concentration with 2.91% of deposits from its top 20 deposit holders and 4.75% deposits from its top 50 depositors as of March 31, 2022.
Continue to strengthen its product portfolios across deposits and advances:The banks aims to expand the branch-wise targets by opening new Retail Assets Central Processing Centres (“RACPCs”) with dedicated home loan sales teams posted at these locations to drive further home loan portfolio growth. The bank is also promoting investments in sovereign gold bonds floated by the RBI. With an endeavour to boost its revenue from fee based products, it continues to tie up with various financial and other institutions. It also plans to focus on and develop this revenue stream further by scaling up its promotion of the insurance and mutual fund products in its Bank’s digital platforms apart from dedicated business campaigns.
Continue to improve asset quality: It aims is to continuously monitor and improve asset quality by focusing on secured advances, high loan to value ratio, diversification across loan book tenures, low concentration across branches and more stringent audit procedures for sanction of the loans specifically focusing on higher value loans.
The bank is the most popular bank from the southern region planning PAN India network. It has posted steady growth in its working year on year and is poised for better prospects post expansion of its network. A long term investor may opt the issue.
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Union AMC launched Union Retirement Fund, an open-ended retirement solution-oriented scheme with a lock-in period of five years or till retirement age (whichever is earlier). The New Fund Offer (NFO) of Union Retirement Fund will open on September 1 and close on September 15. The minimum investment required is Rs 1,000 and in multiples of Rs 1 thereafter. The scheme comes with a compulsory lock in of five years or retirement age whichever is earlier and offers only an equity investment plan. The Scheme is benchmarked against S&P BSE 500 Index (TRI) and will be managed by Vinay Paharia and Sanjay Bembalkar. G Pradeepkumar, Chief Executive Officer (CEO), Union AMC, said, “Union Retirement Fund is not just an NFO. It is a bugle that calls for serious introspection amongst all stakeholders to dovetail Aspiration planning with Financial planning. Renewment planning is how one meticulously plans for Freedom in a disciplined manner. It goes beyond just planning for the pursuit or accumulation of wealth.”
Edelweiss Asset Management Limited has launched the Edelweiss Gold and Silver ETF Fund of Fund. The fund will be open for subscription till September 7. This is the first fund in the industry to have allocation to both gold and silver. The Fund will be managed by Bhavesh Jain and Bharat Lahoti. The fund house said in the press release that gold and silver have proven to be popular investment tools in current times as they offer a hedge against inflation. These precious metals also have a low correlation with equities and therefore offer better diversification. Compared to physical gold and silver, the mutual fund structure offers greater convenience, affordability, and liquidity.
ICICI Prudential Mutual Fund has launched ICICI Prudential PSU Equity Fund, an open-ended equity scheme with an objective to provide long-term capital appreciation by investing predominantly in equity and equity related instruments of PSU companies. The scheme may invest in sectors/stocks that form a part of S&P BSE PSU Index. The scheme may also invest in opportunities across market cap - that is. large, mid or small cap. The NFO opens on August 23 and closes on September 06. “PSU companies form an important constituent of Capital Markets and are present across different sectors presenting wide investment opportunities. Also, PSUs appear to be attractively placed on valuation basis and offer better margin of safety. In a volatile environment, companies providing high dividend yield tend to have higher demand resulting in capital appreciation,” Chintan Haria, Head - Product Development and Strategy, ICICI Prudential AMC. According to the fund house, many factors make the PSU space attractive: One, government ownership in PSU companies is substantial compared to nonpromoters (FPIs, DIIs & Retail). As these companies are highly under owned by non-promoters, the PSU space provides better Margin of Safety. Two, valuations in the PSU space have been attractive for a while now again indicating that companies have better Margin of Safety. Three, PSUs tend to offer better dividend yield than broader markets. Average dividend yield of S&P BSE PSU Index (last 17 years) is 2.6 whereas that of S&P BSE Sensex is 1.3. In a volatile environment, companies providing high dividend yield tend to have higher demand resulting in capital appreciation.
WhiteOak Capital Mutual Fund has launched two schemes - WhiteOak Capital Mid Cap Fund and WhiteOak Capital Tax Saver Fund. While the New Fund Offer of the mid cap fund closes on August 30, the tax saver fund NFO will be open for subscription till September 23. These are open-ended equity schemes. Both regular and direct plans will be available for investors in both the funds. The WhiteOak Capital Mid Cap Fund will allow lumpsum investments only during the NFO period. The scheme will take investments only via SIP after the NFO period. According to a press release, WhiteOak Capital Mid Cap Fund will invest nearly 65% of the portfolio in Mid-cap stocks. The remaining allocation will be towards both large caps (for liquidity purposes) and small caps (to capture some compelling opportunities). The fund is benchmarked against S&P BSE Midcap 150 TRI. The fund house said that the mid cap segment can be a good investment option for investors seeking to invest for the long term via the SIP route. With additional options which include WhiteOak Capital Goal SIP, WhiteOak Capital Flexi SIP, and WhiteOak Capital Top Up SIP , investors have the flexibility to choose from a wide range of SIP variants.
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