All You Need To Know Going Into Trade On June 25
Asian markets have opened lower this morning after a weak session on Wall Street. Sentiment turned risk-off after a surge in Covid-19 cases in multiple states across the U.S.
The U.S. Dollar has extended Wednesday's gains while treasuries are holding on to an overnight advance.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, fell 1.5% to 10,142 as of 7:50 a.m.
Short on time? Well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.
Let’s take a look at all that can influence equities in today’s session:
- Markets in Japan and Australia have opened lower in early trade with the Topix Index falling over 1%.
- Markets in Hong Kong and China are shut today on account of a holiday.
- Futures on the S&P 500 were down 0.3% after the index fell 2.6% overnight. The Nasdaq composite snapped a nine-day winning streak.
- Florida and California set a new daily record for Covid-19 cases while Houston said that its ICU beds are at 97% capacity.
- "We’ve had such a great run from the end of March it’s only inevitable that we should get at least a little step back on the way to higher prices over the course of the year," Margie Patel of Wells Fargo Asset Management told Bloomberg Television in an interview.
- The White House is weighing new tariffs on exports worth $3.1 billion from France, Germany, Spain and the U.K. The U.S. Trade Representative wants to impose new tariffs on European products like olives, beer, gin and trucks while increasing duties on products like aircrafts, cheese and yogurt.
- The International Monetary Fund downgraded its outlook for the world economy, projecting a significantly deeper recession and slower recovery than it anticipated two months ago.
- The U.S. will report jobless claims and GDP data today.
- West Texas Intermediate Crude was little changed at $38 per barrel.
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Stocks To Watch
- Bharti Infratel: Extends long stop date for Indus Towers deal till August 31. Board said that conditions precedent to be fulfilled for the Indus Tower merger to become effective cannot be completed by June 24. Each party retains the right to terminate and withdraw from the scheme.
- Reliance Industries: CCI approves acquisition of 9.99% stake in Jio Platforms by Facebook’s arm Jaadhu Holdings.
- BPCL: To raise Rs 3,000 crore during fiscal 2021 via NCDs.
- Indian Oil Corporation: Paradip refinery will be shut for maintenance and the company expects refineries to achieve 100% utilization by the end of the year.
- Andhra Paper: Promoter International Paper Investments to sell 39.77 lakh shares (10% equity) through an offer for sale (OFS), with an option to sell an additional 28.64 lakh shares (7.2% equity). Floor price for the same is set at Rs 186 per share, a 20% discount to Wednesday's closing price. On use of the oversubscription option, the stake of International Papers Investments can come down to 2.8% from 20%. Trade date for non-retail investors is June 25 and for retail investors it is June 26.
- Page Industries' Covid-19 Impact: Operations at all 15 manufacturing facilities resumed on different dates starting May 4. Response from the market has been healthy. Expect momentum to accelerate in the coming quarters as restrictions get lifted in the market.
- PFC & REC: Fitch Ratings revises the outlook to negative from stable. Long-term Foreign-Currency Issuer Default Rating affirmed at BBB-.
- Embassy Office Parks REIT: Bloomberg News reports that Blackstone Group has raised $302 million through a minority stake sale, mostly to pay back its investors. The U.S.-based PE firm sold 6.7 crore units at Rs 341 each, as per the term sheet obtained by Bloomberg News. The group will continue to remain the largest shareholder in the company despite the drop in stake. The Capital Group, Canada-based CI Investments and ICICI Prudential Asset Management added to their holdings while Nomura Asset Management, Brookfield Asset Management, Norges Bank and Prusec are some of the new investors in the company.
- India Glycols: Board approved raising Rs 250 crore via equity.
- Non-Nifty Earnings Today: Apollo Hospitals, Somany Ceramics, Hindustan Aeronautics, TTK Prestige, Ashok Leyland, Bank of India, Container Corporation of India, Endurance Technologies, Engineers India, IDFC, Indian Overseas Bank, V2 Retail.
Earnings Reported After Market Hours
United Breweries Q4FY20
- Revenue down 12.6% to Rs 1,424.2 crore
- Net profit down 39.3% to Rs 14.2 crore
- Ebitda down 22.8% to Rs 132.3 crore
- Ebitda margin down to 9.3% from 10.5%
- Deferred tax reversal of Rs 12 crore this quarter
- Other income of Rs 10.6 crore in the base quarter
- Raw Material cost as a percentage to sales at 49.1% from 49.5%
- Positive price, mix and more stable input costs aided gross margins
- Volumes are negatively impacted due to Covid-19
- All numbers are standalone and compared on a year-on-year basis
Canara Bank Q4FY20
- Net Interest Income down 5.2% to Rs 3,318.5 crore
- Net loss widens to Rs 3,259.3 crore from Rs 551.5 crore
- Provisions at Rs 4,875.3 crore from Rs 5,120.9 crore
- Gross NPA at 8.21% from 8.36% in the previous quarter
- Net NPA at 4.22% from 5.05% in the previous quarter
- Bank has availed an option to defer provisions for frauds amounting to Rs 2,350 crore which will require the bank to set aside Rs 1,990 crore to cover the losses
- Employee costs nearly doubled to Rs 2,175.2 crore
- Tax reversal of Rs 2,000 crore in the base quarter
- All numbers are standalone and numbers of net profit and Net Interest Income are compared on a year-on-year basis
General Insurance Corporation Q4FY20
- Gross Premium up 14% to Rs 9,217.8 crore
- Net profit at Rs 1,197.4 crore from net loss of Rs 1,556.5 crore
- Solvency ratio at 1.53 from 2.06
- Gross NPA at 4.42% from 3.01%
- Net NPA at 0.63% from 1.12%
- Profit lower due to provisioning for investments in higher agriculture losses
- All numbers are standalone
Macquarie On Jubilant Lifesciences
- Outperform rating maintained
- Price target of Rs 720
- Contract Development & Manufacturing Organisation (CDMO) and drug discovery segments witnessing high demand
- Sees good potential in drug development as well
- Expects healthy topline growth and margin expansion in drug discovery post expansion
Morgan Stanley On ICICI Bank
- Overweight rating maintained
- Price target of Rs 475
- Depends on how bank will articulate growth potential
- May use capital raised (as reported in media reports) to improve margin of safety
- Bank does not need to raise capital for potential NPAs
Investec On Eicher Motors
- Downgrade to sell from buy
- Price target of Rs 14,100
- Covid-19 can influence two-wheeler consumption patterns
- Pandemic may see deferment in hobby/replacement purchases
- Inherent character and weight of the bike restricts customer base
- Sunteck Realty: Kotak Mahindra International acquired 16.8 lakh shares (1.15%) at Rs 180 per share while FIAM Emerging Markets Pool sold 10.71 lakh shares (0.73%) at Rs 181.3 per share. Fidelity Group sold 29.48 lakh shares (2.01%) at Rs 181.3 per share.
- Embassy Office Parks REIT: Blackstone-sponsor entities sold 3.3 crore units (4.28%) at Rs 341 per unit, American Balanced Fund acquired 92.28 lakh units (1.27%), Nomura India Fund acquired 63.43 lakh units (0.82%) and Signature High Income Fund acquired 39.95 lakh units (0.52%), at Rs 341 per unit, respectively.
- Metropolis Healthcare: Promoter Duru Sushil Shah sold 30.54 lakh shares (6.03%) at Rs 1,383.4 per share while Aditya Birla Sun Life Mutual Fund acquired 3.12 lakh shares (0.62%) at Rs 1,382.1 per share.
Pledged Share Details
- Eveready Industries: Promoters invoked pledge of 6 lakh shares on June 16
- DB Corp: Promoter DB Consolidated revoked pledge of 19 lakh shares on June 22
- Strides Pharma: Promoter Lifecell International released pledge of 14 lakh shares on June 24
(As Reported On June 24)
Who’s Meeting Whom
- Shriram City Union Finance: To meet WestBridge Capital Management on June 25
- Indian Energy Exchange: To meet Bajaj Life, Samsung AMC and other investors from June 25-30
- Castrol India: To meet GIC on July 6
- CARE Ratings: To meet FPA Funds on June 25
- Cummins India: To meet Threadneedle Investments, SBI Mutual Fund and other investors on June 26
- Century Textiles & Industries: To meet Nippon India Mutual Fund and Elara Capital on June 26
- Price Band Revised From 10% To 5%: Ashiana Housing, Indo Rama Synthetics, The Jammu & Kashmir Bank, Morepen Laboratories
- Price Band Revised From 20% To 10%: Asian Granito, Ginni Filaments
- Move Into ASM Framework: Seya Industries, Skipper, Sical Logistics, Indo Rama Synthetics, Bombay Rayon Fashions.
- Move Into Short-Term ASM Framework: Nahar Poly Films, Astec LifeSciences, JBM Auto, Nitin Spinners, Greenpanel Industries, Kirloskar Industries, Indo-National, Magadh Sugar & Energy, The South Indian Bank
- Move Out Of Short-Term ASM Framework: Aurionpro Solutions, GPT Infraprojects.
- Apollo Tyres: Promoter PTL Enterprises acquired 40,000 shares on June 19
- Trident: Promoters acquired 85,000 shares on June 23
- Waterbase: Promoter KCT Management Services acquired 2.27 lakh shares on June 18
- IndusInd Bank: Promoter IndusInd International Holdings acquired 50,425 shares between June 22-23
(As Reported On June 24)
Money Market Update
- The rupee snapped a two-day winning streak on Wednesday, ending with losses.
- The currency ended at 75.72 against the U.S. Dollar, as compared to Tuesday's close of 75.64.
- Rupee ended as the second worst performing currency in Asia.
- Nifty June futures closed at 10,296; discount of 9 points from 4 points
- Nifty June futures shed 29% and 21.6 lakh shares in Open Interest
- Nifty Rollovers at 58.9%
- Nifty Bank June futures closed at 21,401; discount of 25 points from 35 points
- Nifty Bank June futures shed 20% and 3.2 lakh shares in Open Interest
- Nifty Bank rollovers at 54.3%
- Nifty Put-Call Ratio at 1.29 from 1.63 across all series
- Stocks In F&O Ban: Glenmark, Just Dial, Vodafone Idea
Nifty Monthly Expiry: June 25
- Maximum Open Interest on Call side at 10,500 strike (46.5 lakh shares)
- Maximum Open Interest on Put side at 10,000 strike (39.8 lakh shares)
- Active Options: 9,700 Put (-11.6 lakh shares) and 10,500 Call (+13.9 lakh shares)