Indian Markets May Open Positive
DSIJ Intelligence / 21 Mar 2012
Indian markets may extend yesterday’s gains and open positive today. The SGX Nifty is trading up by 14 points at 5304 indicating a flattish gap up opening to markets today.
Opening Bias
The Indian markets may extend yesterday’s gains and open positive today. The SGX Nifty is trading up by 14 points at 5,304, indicating a flattish gap up opening to the markets today.
| Benchmark Indices | ||
|---|---|---|
| Index | Closing | % Change |
| SENSEX | 17316.18 | 0.25 |
| NIFTY | 5274.85 | 0.34 |
| Dow Jones | 13170.19 | -0.52 |
| S&P 500 | 1405.52 | -0.30 |
| NASDAQ | 3074.15 | -0.14 |
| Bovespa | 67295.56 | -0.64 |
| FTSE | 5891.41 | -1.17 |
| DAX | 7054.94 | -1.39 |
| CAC | 3530.83 | -1.32 |
| LIVE | ||
| Hang Seng | 20954.92 | 0.32 |
| Nikkei | 10113.67 | -0.28 |
| Shanghai | 2394.57 | 0.75 |
Overnight, the US stocks snapped back on their gains as commodities fell on concern about a Chinese economic slowdown. Industrial and commodity shares slumped as China raised fuel prices by the most in two years and BHP Billiton Ltd said that the nation’s steel production is slowing down. Also, the nation’s vehicle sales may miss industry forecasts this year as economic growth slows, an official from the China Association of Automobile Manufacturers said. As a result of this overnight drop in the US stocks and concerns regarding the Chinese economy, the other Asian markets of Nikkei and Hang Seng have also flagged off their trading sessions on a subdued note.
| Currency Rates | ||||
|---|---|---|---|---|
|
| Rs/$ | Rs/Euro | Rs/GBP | Rs100/JYP |
| RBI Rate | 50.2545 | 66.5226 | 79.7639 | 60.2500 |
| Future | 50.5025 | 66.6450 | 80.0100 | 60.3475 |
Back home, after miraculously scrapping through the ONGC offer for sale via the auction route, the government has finally decided to go ahead with the initial offer of National Building Construction Corporation (NBCC). The IPO, which opens on March 22 and closes on March 27 will be available in a price band of Rs 90-106 a share. For now, despite the concerns over its high dependence on government-owned companies and ministries for construction contracts, we are bullish on the prospects of the company and recommend our readers to subscribe to the issue.
| Key Global Indicators | ||
|---|---|---|
|
| Gold (Rs/10gm) | Crude ($/bbl) |
| Spot | 26784 | 125.04 |
| % change | - | 0.43 |
| Future | 27814 | 106.72 |
| % change | -0.31 | 0.61 |
Our confidence in the counter stems from its consistent growth, excellent dividend paying history and comfortable return ratios. On the valuation front too the counter looks attractive at a PE of 10.8-12.73x its annualised EPS of Rs 8.33. With cash balance of Rs 1,368.1 crore as on September 30, 2012 the value per share of Rs 114 stands higher than the upper band of the offer price. Also, the 5 per cent discount to be offered on the final issue price is a confidence booster for retail investors.
In conclusion, for today we still do not expect the markets to sustain their gains from the early hours. Rather, they may remain volatile due to lack of any triggers to support a rally. Our advice to readers is to adopt a ‘wait and watch’ strategy and park funds in the upcoming NBCC IPO for significant listing day gains.
Stocks In Action
American drug regulator USFDA, which issued an import alert on products made in the Mexico unit of India’s Dr Reddy’s Laboratories, may visit the facility for an inspection later this month. However, Dr Reddy’s believes that the Detention Without Physical Examination (DWPE) alert issued by the USFDA is of a temporary nature and is not expected to have a material long-term effect on the company’s Mexican operations.
According to a press release on the BSE, the country’s largest power producer, NTPC, has tied up a loan of USD 100 million with the Japanese Mizuho Corporate Bank in a bid to part-finance its capex plans. The loan will be spent on capital expenditure for the company’s ongoing as well as new projects. It would also be utilised for financing coal mining projects and renovation and modernisation of the power stations. NTPC is planning to invest Rs 24,000 crore on setting up a thermal plant of 4,000 MW at Vishakhapatnam in Andhra Pradesh. The state government will facilitate land availability and coal linkage for the project. NTPC operates plants with over 36,000 MW of capacity from all sources of energy and has plans to enhance the capacity to about 70,000 MW by March 2017.
According to a press release on both the exchanges, auto component maker, Amtek India, has raised USD 130 million (about Rs 650 crore) through the issue of foreign currency convertible bonds to fund acquisitions and other capital expenditure. The FCCBs (foreign currency convertible bonds) will have a maturity period of five years and will bear a coupon rate of 6 per cent payable on a semi-annual basis. The FCCBs are expected to be listed on the Singapore Stock Exchange at a minimum floor price fixed at Rs 99.13. Earlier in January, the company’s board was authorised to raise up to USD 250 million from overseas debt instruments, including GDRs, ADRs, FCCBs or other securities convertible into equity.
According to two separate press filings on the BSE, the boards of Satyam Computer Services and Tech Mahindra will meet today to consider a merger between the two companies. Mahindra had purchased Satyam in a government-sponsored sale in 2009 after the founder of the Hyderabad-based software services provider admitted to one of the largest accounting frauds in India. Mahindra is seeking to create a consolidated IT services powerhouse by merging Satyam and Tech Mahindra, which provide software services to clients mostly in the United States and Europe. The two companies will also consider the amalgamation of some of their wholly-owned subsidiaries - Venturbay Consultants Private Ltd, C&S System Technologies Private Ltd, CanvasM Technologies Ltd and Mahindra Logisoft Business Solutions Ltd.
According to Economic Times, four states have slapped a fine of Rs 400 crore on a Reliance Power entity setting up one of India’s largest power projects, worsening troubles for a prestigious venture which has been in limbo for about nine months. Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra, which have agreements to buy electricity from the 4,000 MW project, have also threatened to encash the bank guarantees, terminate the power purchase agreements and recover the land allotted for the coal-fired project. The stoppage of the project has caused irreparable loss to the electricity procurers, which would ultimately be detrimental to end-consumers of the four beneficiary states, reckons K Vidya Sagar Reddy, CMD of AP Southern Power Distribution Company.
Corporate Action
| Corp Action | ||
|---|---|---|
| Scrip Name | Action | Ratio |
| JRIIIL | Stock Split | Rs 10/- to Rs 2/- |
| Neuland Lab | Rights Issue | 5:12 |
| Stocks Paying Dividend (Ex-Date) | ||
|---|---|---|
| Scrip Name | Action | Rs |
| Amrit Banaspati | Interim Dividend | 60.00 |
| Arihant Found-$ | Final Dividend | 1 |
| Foseco India | Final Dividend | 7 |
| Helios & Matheson-$ | Dividend | 1.5 |
| Lakshmi Over | Final Dividend | 0.2 |
| Nestle India | Final Dividend | 12.5 |
| Om Metals | Interim Dividend | 0.1 |
| Shasun Pharma | Interim Dividend | 2 |
| BSE Institutional Turnover | ||||||
|---|---|---|---|---|---|---|
|
| FII | DII | ||||
| Trade Date | Buy | Sales | Net | Buy | Sales | Net |
| 20-Mar-12 | 2,110.50 | 1,999.41 | 111.09 | 994.50 | 1,114.85 | -120.35 |
| 19-Mar-12 | 2,387.61 | 2,226.74 | 160.87 | 1,111.51 | 1,407.49 | -295.98 |
| 16-Mar-12 | 3,490.69 | 2,607.11 | 883.58 | 1,201.53 | 1,971.92 | -770.39 |
| Mar , 12 | 36,631.99 | 30,382.86 | 6,249.13 | 13,622.36 | 16,592.33 | -2,969.97 |
| FII DERIVATIVES STATISTICS FOR 20-Mar-2012 | |||||
|---|---|---|---|---|---|
|
| Buy | Sell | OI (End of day) | Net Position | |
|
| Rs (crore) | Rs (crore) | No. of contracts | Rs (crore) | Rs (crore) |
| Index Futures | 1572.64 | 1765.96 | 612730 | 16178.74 | -193.32 |
| Index Options | 21777.06 | 21128.82 | 1855650 | 48938.10 | 648.24 |
| Stock Futures | 2445.78 | 2205.24 | 1045598 | 29968.83 | 240.54 |
| Stock Options | 536.04 | 542.21 | 57563 | 1627.00 | -6.17 |
| Total | 26331.52 | 25642.23 | 3571541 | 96712.67 | 689.29 |
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